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This is the 970th Shenzhen Kr New Consumption Sharing Meeting: the essence of the service industry must return to the consumer experience.
Author|Gao Wen
Editor|Huang Xiaojun
Source|Shenzhen New Consumption【ID:xinshangye2016】
Cover image |
Looking back on an era, popular beauty is popular again.
The post-80s and 90s generations must be no strangers to popular beauties. This hair accessories store that provides free hairpins is one of the earliest "retail + service" integrated models in China.
PopBeauty has been a well-known hair accessories street vendor since 1998. Twenty years later, it has developed into a chain brand integrating R&D, production, sales and service. It has more than 2,800 stores (including 30 directly operated stores) in more than 30 provinces, municipalities and autonomous regions across the country, with a total of more than 400 members, including an annual consumption of more than 1,000 active members of 1,000 yuan and up to 1 million.
The data shows that the beauty industry's store closure rate in 2019-2020 was 37.6%, exceeding the record store closure rate of 29.2% in 2016-2018... In the fast-growing beauty industry, store closure rates are growing linearly.
Remodeling an old store is not easy. PopBeauty once became the largest women's hair accessories company in China, with a turnover of more than 1 billion yuan, and still operates in shopping malls in major cities.
How did this hair accessories store that sold thousands of hairpins disappear and reappear?
01
I'm selling styles, not hair accessories
In Jewish business law, the business rule is "for women," especially women who love beauty. PopBeauty's business is ostensibly selling hair accessories, but in reality it's more of a "beauty service" sale.
PopBeauty's business model is "one-time consumption of products, free service for life". Customers only need to make one purchase at PopBeauty and enjoy free hair, styling, makeup and self-styling services at national chains. Customers can try it out and then buy.
Like Haidilao, the key to success is the service, not the product itself.
The customer portraits of popular beauty are mainly female consumers aged 30-50 who are married and have children. Especially in business positions such as sales, flight attendants, or insurance, women need a dignified appearance to meet customers. In addition to strong consumer demand, these beauty-loving customers often pay for their children. Slightly older women also often like hairstyles, so it's easy to become a client of popular beauticians.
Source: Little Red Book
PopBeauty's regulars are very sticky. As soon as a new hair accessory appears, they buy it. It is not uncommon for customers to spend more than 10,000 yuan a year, and it is not uncommon for customers to stack hair accessories in beauty boxes. Hair accessories are always the same. Why do customers keep buying new products? The main purpose of fashion beauty research and development is not beauty, but the combination of new products and new styles. There can be too many new hair accessories, but not too many new styles.
Therefore, in the popular beauty training system, product developers are required to understand hair design, and hair designers are also required to understand product development.
When developing a product, it is important to control the fashion and beauty of the hair accessory itself while paying attention to its function. This means that when designing a new hair accessory, it must have the right shape and be firmly and comfortably fixed in the hair. The number of human hairs is about 100,000 to 150,000, and the approximate number of hairs that the product will capture should be calculated. Be sure to ensure that the hair fixed with the clip does not slip and is not tied too tightly to avoid scalp injury. A balance needs to be found between the two.
A hairpin braid hairstyle popular in the early years
In addition, various official and private studies have also laid the groundwork for the rapid updating of popular new beauty styles.
PopBeauty stipulates that for every functional hairpin sold, you can get a reward of at least 10 yuan. When there are no customers, sellers actively come up with new styles to sell hairpins. The shape reserve naturally increases over time.
For the looks created by these PopBeauty suppliers, they collect creative looks, compile them into a book with process, procedure, standard, and process videos, and then turn them into physical products. Even if a skilled stylist leaves and is replaced by a new one, he can take advantage of it directly.
Based on this business model, more and more PopBeauty franchise stores that were once very famous have opened. From 2011 to 2013, the revenue was 280 million yuan, 350 million yuan and 450 million yuan respectively, and the corresponding net profit was 52.79 million yuan, 66.15 million yuan and 88.44 million yuan, with a growth rate of 9% in 3 years. % and 29%. Before 2015, its core operating gross margin remained above 60%.
02
Get lost in the street
In 2015, the beauty craze began to decline. According to its prospectus, the net profit for the whole year was only 40.65 million yuan, a sharp decline of 54% from last year's net profit.
PopBeauty explained that the main background of the retail boom is the slowdown in macroeconomic growth; Coupled with the impact of the rapid development of online platforms and e-commerce, it directly affects the passenger flow and transaction volume of its and franchisees' retail terminals. Customer quantity and unit price.
The popular beauty of using services to increase product rewards, when gross margins are so high, the price is naturally surprisingly high. A popular beauty salon on the first floor of Lund Plaza in Beijing's Tiantongyuan Garden, about half of the 5-6 meter long counter is occupied by various hair accessories. Among them, the most common and compact small claw clip costs more than 160 yuan, the price of combs is more than 300 yuan, and many are sold for more than 500 yuan.
Hairpins worth thousands
Due to the popularity of Kuaishou, Douyin, and the major short video platforms at the time, the information gap between consumers basically disappeared, and various creepy and detailed tutorial videos appeared. Consumers no longer have to pay for expensive hair accessories. With the change in aesthetic trends, fashion has shifted from fancy coiled hair to popular hair colors. Since 2014, the popularity of the hairdressing industry has been obvious to all. Among them, there are only 25 most famous "Dongtian-style" hair salons, with an annual income of more than 200 million yuan.
There are too many monks, not enough porridge, and the decrease in customer traffic has directly reduced the income of thousands of Pop-upBeauty franchised stores. About 20% of stores were forced to close due to low profitability.
From 2013 to 2015, the number of mass beauty franchise stores was 3,304, 3,886 and 3,560 respectively. The turnover of franchised stores was 397.5229 million yuan, 466.9355 million yuan and 354.5661 million yuan respectively, accounting for 90.09% and 354.561 million yuan of operating income respectively. 91.78%、88.42%。
It is not difficult to see from the prospectus that franchised stores were the main source of income during the period under review, while the income of individual stores showed a downward trend.
From the perspective of mass beauty store revenue, the average income of mass beauty franchise stores in 2013 and 2014 was 135,800 yuan and 129,300 yuan respectively. The company's same-store sales in 2014 were down less than 6 percent from 2013.
By 2015, this model of relying on the expansion of franchise stores to sustain growth was finally unsustainable. In 2015, the turnover of a single store of mass beauty franchise stores was only 95,400 yuan, a sharp decrease of 26.22% over last year. In a recession.
And this decline is irreversible, because hair accessories are a key component of popular beauty products, and their existence is largely dependent on one product.
In other words, the sales growth of PopBeauty single products stores due to the expansion of franchise stores has ended.
With so many stores disappearing, listing hopeless, and business blocked, PopBeauty needs to transform to survive.
03
Transformative change
Aesthetics change, but the love of beauty never changes. There are successful cases of the retail + service model. UltaBeauty, an American beauty retail chain that provides beauty services, broke through all barriers with a comprehensive "retail + service" model, surpassing Sephora in 2015 to become the largest professional beauty retailer in the United States.
The popular beauty model itself is retail + service, but existing retail products and services need to change. In terms of changes in the aesthetic profile of the public, two brands stand out.
One of them is BINF Fashion Beauty, which maintains the old free hair accessory purchase, but changes the brand positioning. The commercial content has changed from one-stop cosmetics + light beauty to more combinations of cosmetics and beauty salons, but it is rare in shopping malls, but it flocks into busy squares.
After the renovation, most of the fashion beauty stores are located near supermarkets, and maintain long-term cooperative relations with large supermarkets such as Wal-Mart, Carrefour, RT-Mart, etc., to facilitate the flow of target customers. Because the mothers who enter and leave the supermarket every three days are basically mothers with babies, and the high value-added mother group is PopBeauty's core customers.
PopBeauty has 24 "light beauty" stores (including old franchises and newly opened stores that have been profitable or even loss-making), aiming to achieve million sales and 3-4 times sales growth in 2017. The annual sales of newly opened stores reached 2.2 million, of which the sales of light beauty business accounted for more than 70% of the revenue of a single store, and the new growth direction will be beauty services.
Another store, called BINHair, was created as a high-end hair care brand. The anxiety of 250 million people is enough to support the ceiling of this market. According to data released by the Ministry of Health, the personal hygiene consumption of mainland urban residents is growing rapidly, growing at an annual rate of 30%, far exceeding the growth of 9% of GDP.
Relying on the continuous word-of-mouth and business advantages of Dianping Beauty, BIINF opened the market with small services three months after its opening, and topped the Dianping Guangzhou hairdressing list.
This little service is also what PopBeauty does best – design. Other barbers stop at hair care and blow drying, but at BINHair, all you have to do is communicate with the seller, straighten, curl, braid, and get a free haircut before leaving. After all, when it comes to salesman styling skills, PopBeauty has a huge advantage over its peers.
From high prices to parity, many barriers and information gaps between the industry and consumers have been broken. The essence of the service industry must return to the consumer experience.
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