Madison Reed Bridges The Brick-And-Mortar Divide

Brick and mortar is dead — that seems to be retail’s favorite refrain in 2017, urged on by the ongoing struggles of some of the biggest players in the game and a wave of bankruptcies that keep building without breaking in the industry.

While physical retail is working hard to hit the reset button, remember that over 90 percent of shopping is still done in stores. Although eCommerce is growing, it has a lot more growing to do before it would be accurate to say that online commerce has killed its physical counterpart.

Consider the fact that as those digital-only players are growing up, they are also trying to branch out into the physical world.

Joining the brick-and-mortar retail party with the likes of Amazon and Warby Parker is Madison Reed — the home hair dying startup that is committed to one goal: helping women “own” their beauty. The hair dye business is big: according to industry research, only 25 percent of American women are rocking a natural look. The other three-quarters of the population is using dye to enhance their locks, spending $18 billion a year for the privilege.

And Madison Reed — a four-year-old, San Francisco-based maker of affordable hair products, with only a staff of 85 — has been lining up to take a cut of that pie by offering women a better experience than paying a fortune to a professional or spending a long miserable night in their bathrooms trying to DIY it.

“This idea of how we can make the process better for a woman choosing her hair color is what inspired us. Right now, if a consumer goes to the store to buy hair color, they’re making a choice from the picture that maybe looks somewhat like their hair color. Our focus is to match that consumer to the exactly right shade and then give her everything she needs in the box — so that women get to take control of their beauty,” Chief Product Officer Maureen Watson told PYMNTS in a recent interview.

Getting that shade just right is no small accomplishment and requires lots of options. For Madison Reed, that works out to 45 shades of permanent hair color, eight shades of hair “gloss,” six shades of liquid-based root touch-up (for in-between coloring sessions) and six shades of powder for root touch-ups. Recently, the company has also started making shampoos and conditioners for color-treated hair.

The hair products are there, but Madison Reed is ready to think bigger, according to its Founder and CEO Amy Errett. The firm has just snapped up $25 million in new funding in a round led by Comcast Ventures, an earlier investor, to bring its digital vision to the real world with a chain of brick-and-mortar “color bars.”

“We had a pop-up in New York for four months earlier this year that we created as a kind of experiment, and it was great,” Errett said. “So, we opened another color bar in San Francisco in June … beginning in September, we’re opening 25 more, all over the place.”

The stores won’t be very large, however. Errett emphasized that they are shooting for around 1,500 square feet each. The interior design will feature eight chairs: four chairs facing each others with mirrors in between. Perhaps most exciting, the cost will be quite a bit lower than one might encounter at their local hair salon. Depending on location and what products the client prefers, sessions could be priced as low as $60 for 60 minutes.

“We’ve also developed tech around scheduling, merchandise processing, about [tracking and helping our customers] who take color quizzes first,” Errett explained.

Additionally, visitors will be dealing with the same professional colorists who already staff the Madison Reed site — employees who are experienced in salons, licensed and then customer-trained by Madison Reed for three weeks on the specifics of their product line.

“After that, we let [them do a test run] with friends and family for a week, who we don’t charge. This is a business that’s won and lost over quality; we aren’t just selling anything to anyone,” the CEO said.

Madison Reed already claims a rather loyal consumer base: 70 percent of their customers are recurring. Part of that is based off their business model, since Madison Reed offers a subscription service.

“You can buy a single box of color, or you can subscribe. Our hair color kits are only available at our site online; we want to control the user experience. Offline, we sell 12 of our hair colors at Ulta, because 50 percent of the [chain is about] hair, so if you’re going to pick the one retailer that you believe women visit for their hair needs, that’s the one,” Errett said.

Madison Reed is expanding more than its footprint into the real world. They have also started testing dyes for men (20 percent of American men dye their hair as well).

“We have a lot of folks that are interested in the company. This is an interesting story, and all these [products you see being developed] like hair color are real businesses. People need to get their hair colored,” Errett said.