Salon Superstores: How Much Is Too Much?

Beauty superstores such as Ulta3 specialize in selling the products used by professionals, rather than the services offered by them. By doing so, these retail stores/salons have taken retailing to new heights.

Home Depot, Price Club, Best Buy, Office Depot, CompUSA. You name the industry, and we can name a superstore retailer who has wrought change, for better and for worse, on that industry. The beauty industry is no exception: “Beauty superstores” — retail stores with literally thousands of products for the consumer to choose from — are winning over consumers with a full range of beauty products complemented by salon services for those who desire them. In addition, trained beauty advisors and licensed salon professionals are always available to dispense advice or for a consultation.

Kathi Grider, director of salon operations for Ulta3, a Lemont, Ill.-based retail store/salon chain, describes the appeal of these stores: “We offer the time-conscious professional the ultimate beauty experience. It’s like a Disneyland for women,” she says.

And just like Disneyland, these superstores are hoping consumers take home a lot. Beauty superstores such as Ulta3 specialize in selling the products used by professionals, rather than the services offered by them. By doing so, these retail stores/salons have taken retailing to new heights: Beauty Brands (Overland Park, Kan.), offers more than 10,000 “national salon products” for hair, nails, and skin; Ulta3 boasts more than 20,000 name-brand cosmetics, fragrances, accessories, and hair, nail, and skin care products.

While retailing at-home beauty products is admittedly the focus of retail stores/salons, their mission, says Grider, is to provide consumers with a “total beauty experience,” which means offering a full range of services as well. Indeed, Ulta3 customers can enjoy such services as stress-reduction manicures and pedicures along with hair design and color services. Ulta3 describes its Salon at Ulta3 as popular and cites a 100% growth in service sales from 1994 to 1995.

Likewise, Beauty Brands’ goal is to provide “a one-stop beauty destination,” says Terri Archdekin, director of concept development for the self-described beauty superstore, salon, and spa. At Beauty Brands and its in-house salon, Choices, customers can choose from “thousands and thousands of beauty products and the widest offering of beauty services,” says Archdekin, including hair, hair removal, nail, facial, and stress-relieving massage-therapy services.

Some of the appeal of retail stores/salons lies not just in what they offer, but in how they present it. Like other retail businesses, retail stores/salons recognize the value of colorful, stylish fixtures, well-lit displays, open floor plans, signage that promotes and explains the products, advisors trained in the products they’re selling, and hands-on displays that encourage customers to see, touch, and smell the products. At Beauty Brands, for example, signs posted next to each product list the benefits of using that product, and a video makeover system asks clients a series of questions and then prints an individualized “beauty prescription” for the client’s specific needs.

“I think consumers want selection and value, and they want an environment that is professional yet entertaining,” says Archdekin. Beauty Brands fulfills these desires with the video makeover system and interactive events such as a testing station where customers can try services such as a paraffin dip or new products such as hand lotion or polishes.

Of the retail store/salon concept, Archdekin says, “It’s new, its interesting, and its convenient.”

The question is ...

It a Professional Salon or a Retail Store?

Called beauty superstores, retail-oriented salons, merchandising salons, and even mega-phantom salons, retail stores/salons are supplying consumers’ ever-growing demand for quality products and professional advice. The growing number of retail-oriented salons proves they’re hot with consumers, but they’re taking heat from the professional beauty industry as traditional salons, manufacturers, and distributors debate what constitutes a “salon.”

For years, manufacturers and distributors have prodded and cajoled salons to retail professional products. Their urgings have worked to a degree because many salons now do retail at least some professional products, but only a minority of salon professionals boast great success with retailing. Citing lack of space, interest (theirs and clients’), and time to track and sell, most salon professionals prefer to focus on service. At the same time, consumer demand for professional products has risen — and retail-oriented salons are supplying that demand like no other outlet with a wide selection of products.

Retail stores/salons are categorized by some critics as nothing more than glorified phantom salons, a term used to describe pseudo-salons that are actually beauty supply stores with a for-show-only shampoo bowl and styling chair in the back that qualifies them as “salons” so they can buy and retail professional products. Retail-oriented salons don’t meet the definition of a phantom salon; the problem is, they don’t meet any definition of a salon, except their own.

“The line is blurred,” explains Larry Gaynor, CEO and president of Nailco Salon Marketplace (Farmington Hills, Mich.). “A phantom salon is typically a business owner who wants to sell all the brands and whose primary business is retail. These new stores are true destination stores where a woman can get an education, learn about products, and pick from many different products and categories. The locations are spacious and customers are serviced by trained cosmetologists, so it’s a whole different environment [from the phantom salon].”

“Because it is a brand new concept, it s easy for people to categorize us based on what existed in the past,” says Archdekin. “I think a lot of people are throwing us into a category, and they are intimidated by the fact that we are positioned with salon brands.

“This is not an extension of the phantom salon. This concept is new, and we’ve made a major commitment to the professionals through recruiting, training, and marketing,” Archdekin adds.

Elana Laub, owner of the Beauty Store chain (San Francisco, Calif.), defines her stores as a hybrid of a retail beauty supply store and a salon. “We actually have hairdressers you can call for an appointment, if they’re not booked solid, which they often are. Our salons are pretty, appealing, and very visible; they’re not hidden away behind the water cooler. Phantoms do exist and there are some in this city who get the product lines that I had to work really hard to get. It’s not fair for the rest of the real salons — and we are real.”

Laub, Grider, and Archdekin acknowledge that their stores emphasize retail sales, but say professional services are an integral part of their business — and one that qualifies them to be counted as “real” salons.

Rick Goldberg, “head coach” at Progressive Beauty Supply (Eden Prairie, Minn.), agrees that labeling retail store/salon operations as phantom salons is inappropriate. “I think there needs to be a new definition. I think somebody should define what a full-service salon is, what an urban retreat is, what a day spa is. How do we define Ulta3? They’ve taken the best concepts of retailing and the salon industry and created a hybrid, but what do you call that?”

Mega-phantom salons is what Sydell Miller calls them. Miller, chairman of the board for Matrix Essentials (Solon, Ohio), has spearheaded Matrix’s Crusade for Professionalism, which encourages salons to support manufacturers who support them by keeping their products in professional salons.

“Hairdressers have, created a demand for professional products through their recommendations. Many of these mega-phantom salons look more like a store than a salon, which makes them sometimes more inviting, and their locations are often in large traffic malls, which makes them more accessible. But the customer is generally going in and looking for a professional product because it has been recommended to her by a hairdresser. So the store is gaining their business off of the hairdressers’ recommendations,” Miller says. In Millers opinion, this hurts the professional salon, so she has devised what she calls “a very clean, very clear-cut definition” of a salon. “It must do more in services than in retail, which a legitimate salon does,” she says. Matrix’s so-called 50/50 rule dictates that services must account for more than 50% of a salon’s business before that salon can purchase Matrix products.

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