How to Survive the Wave of Big Stores
Business management strategies for small beauty supplies to compete with larger, chain beauty supplies
In America, 80,000 or so beauty supplies are running, and many of them are large chain stores consisting of dozens of beauty supplies. Aside from large chains with 40 to 50 beauty supply stores, there are countless numbers of beauty supply businesses running more than one store location. In many cases, small retail stores grow into bigger stores. Lately, you hear about stores with 100,000 sqft retail floors, from which we can infer the continued growth of beauty supply business despite the post-pandemic high inflation and recession.
Business owner Lee who has run a 5,000 sqft beauty supply in Texas is planning a move to a 20,000 sqft retail space. When asked about the reason, Mr. Lee says, “In addition to the hope to generate more revenue upon the aggressive investment, I wanted to block the entrance of other bigger players into the market.”
Another business owner in the South has made a decision to move from its 4,000 sqft retail space to a 10,000 sqft. While looking for a retail space after the property owner demanded doubling the rent, the business owner found a bigger space offered at about the same rent as current.
As you see, whether it is per plan or accident, many beauty supplies are bulking up in size. While the pros and cons of bigger retail space are clear, the biggest advantage of having a large retail floor is to solve issues regarding storage of inventory. Wholesalers are releasing new products, and retail stores have no choice but to procure new products to avoid going out of fashion. New products do not sell right away, so many beauty supply stores end up with store-full of merchandise within a few years of running a beauty supply business. Business owner Kim who runs a small shop in the East says, “I receive calls from sales associates about new product releases almost every day. Even though you only order a few items that look good, merchandise starts to pile up in no time. It is stressful. So, we’re considering moving to a bigger location or opening a second location.”
When you run a big store, you cannot avoid facing increased expenses including rent, utilities, and the payroll. However, if you have enough size, you can block new competing businesses opening up, and your business is likely to catch people’s eye, bringing more customers. Also your bigger orders may qualify for extra discounts. It would be only possible when you have enough retail and storage space. A sales associate at a hair company in the East says, “bigger stores place bigger orders, so I would contact them first when there is a new deal or promotion. In summer, braided hair is popular, and if you make an order in an amount upward of 50 boxes or 100 boxes, you can often get a deep discount. On the other hand, a smaller store who can purchase only so much would receive a smaller discount.”
For those reasons, smaller businesses have disadvantages but cannot just give up the fight. Smaller stores have their own strength and can attract customers with them. Business owner Lee who runs a small store in Philadelphia says, “we cannot make a large order because we are small in size, but we use the fact to our benefit by placing smaller orders to reduce product turnover. Customers love to see new products every time they visit. As the retail floor is small, it is easier to make conversation with customers, and you can remember the customer’s name to call them by their name on their second visit.” The strategy increases the repeat visit of new customers. Business owner Kim who runs a small beauty supply in New Jersey says, “we make sure that customers can find what they want without problem, and have an occupied register ready all the time, so busy customers can quickly checkout if urgent. Fast shopping is our strategy to utilize the strength of small stores.” In fact, you would shop at a convenience store instead of larger groceries despite paying extra for the same goods if you only need a few items. Everybody knows that you pay less for the same goods at Walmart, but you also need to spend a lot of time parking and shopping at the superstore.
You can learn a thing or two from the book “the money-making technique of small business” written by Kayano Katsumi, a small business consultant in Japan. The book emphasized the following three points.
First, you must try a new thing to compete with a strong foe. If you have a bigger store nearby, you should be ready to provide different goods or services that make you outstanding. For example, you can offer free trimming upon a wig purchase or free lace cutting. You may offer inexpensive goods as a free gift. For example chemical samples or dollar-jewelries make a great gift. Remember that you can get plenty of samples if you have a good relationship with sales associates.
Second, you should set a goal to be the No. 1 in a certain area, not the business as a whole. It is not easy to beat a bigger competitor let alone to survive. If you start a price competition with a bigger business, you would certainly lose. Therefore, you should focus on a single item that is offered at a lower price. For example, you can offer great quality human bundle hairs at competitive prices on par with bigger stores in the neighborhood. To make this happen, you should make a large quantity order to one or two hair companies, to benefit from bulk order and reduce the cost. It might be better to work with a small or mid-size hair company because they would be much willing to cut a deal with you than large companies.
Lastly, you prioritize providing personal customer service. Try remembering every customer and communicating with them to make them regular customers. Bigger retail stores tend to limit the opportunity for business owners to communicate with customers, so building rapport with customers is not easy for them. It would be one of the ways for small businesses to survive.
In summary, you should offer different goods or services than strong competitors, aim for excellence in a certain area, and try to remember every one of the customers, if you want to overcome the current hardship in running a business. From now on, it is important to make various attempts to make your beauty supply stand out. Through trial and error, you can certainly find a strategy that works for your business. You should start with something now. Just do it!
