Head of Strategy and Planning
Charles Worthington, John Frieda, Nicky Clarke. Is Jeff Bezos the next big name in hair styling?
Most didn’t have the Amazon CEO down as a hair styling icon, and that’s not because he’s follicly challenged but rather he is better known for his relentless quest to dominate the retail space. So, when Amazon announced they were opening a hair salon in East London last week it came as a surprise.
Of course, being Amazon the salon is bringing new tech into traditional retail: customers can experiment with virtual hair colours using AR, enjoy entertainment on Fire tablets whilst their hair is styled, and can order products by scanning QR codes, with delivery to their home.
Upon this news the BBC interviewed Jan Mercan, a hairdresser from London who said "Amazon should stick to online shopping. Salons have been struggling over the past year and Amazon has made a lot of money in lockdown. It shouldn't be about faceless technology - getting your hair done is about human interaction."
So, whilst the press is full of news that Amazon bringing new tech to disrupt the hairstyling industry, are Amazon really muscling in on hair salons? Recent history suggests no, but it might not just be a PR stunt either.
Amazon built its business on selling books, then CD’s, where Bezos found online reviews were doing the job of sales assistants – consumers were happy to take recommendations from strangers and the strategy was low price, choice and fast delivery.
However, when it comes to beauty, consumers want the advice of assistants and stylists who often know their client’s hair better than they do. Jan Mercan is right: people go to stores for people and the experience, but she is also right that Amazon has a lot of money which gives it the ability to take risks.
Jeff Bezos’ first annual letter to investors in 1997 gives us an idea of this attitude to risk: "given a 10 percent chance of a 100-times payout, you should take that bet every time," and "to invent you have to experiment." He loves cheap but easy to kill investments, and this might be one.
Amazon are in a position of having more capital than most to take these risks and failures (remember the Amazon smartphone?) which seemingly don’t put investors off. With its grocery business failing to fly as most consumers continued to prefer in-store experience, Amazon launched ‘Go’ stores (Fresh in the UK) and acquired Whole Foods for $13.7 billion. These are not pile it high, sell it cheap shops but premium brands that give Amazon a better reputation in grocery and provide high margin revenue to the business at the same time.
The same logic can be applied to the Amazon Salon; it is unlikely to be a play in low-cost fast-paced hair styling but instead a way for Amazon to become known for premium hair products. The store is a sales assistant in itself: if they opened a salon, they must know what they’re doing, right?
Going back to Jan Mercan, when she says "Amazon should stick to their online shopping trade" in a way they are doing just that; the aim of the Amazon Salon is not to take over the hair styling industry but instead offer an omni-channel retail experience to sell more product online, so it won’t steal hairdressers customers but will likely mean they sell fewer hair products.
Amazon may not be the next Nicky Clarke, more like the next Boots.
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