Is there a market for Natural Hair Beauty Supply Stores?
Many of us know that the beauty supply industry is a $15 billion industry where the typical store generates anywhere from $300,000 to $800,000 annually. However, many don’t know there are several different types of stores. There are stores that sell equipment, are OTCs (Over-the-Counter) stores, professional stores and Hair & Wig stores. Most only recognize the most popular type of store, which sells a mixture of products that appeal to do-it-yourselfers and professionals. These stores are broken down into 3 main categories: hair care, skin care and nail care. Products pretty much fall under one of these categories, whether the products are equipment, chemicals, hair, or accessories.
Recently, I’ve been asked my opinion on the potency of Natural Hair Beauty Supply Stores. Because of the difficulties many find in trying to break into this industry and compete, Blacks are now considering capitalizing on the growing natural hair phenomenon in the market. The fact is the difficulty to get into the beauty supply business is sensationalized. There are radius policies that many distributors enforce; where they only allow a certain number of stores within a particular area to carry their brand. However, this is only a policy that “some” of the most popular hair manufacturers enact. There are no radius policies for distributors of equipment, chemicals or accessories. However, these policies have gotten so sensationalized and exaggerated that the policy has emerged into it being a blockage that inhibits an entire store from opening within a certain distance from another one.
Anyways, I digress. The point that I am trying to make is the only major obstacle that stops Blacks from opening stores of their own and being successful at it is ourselves. I believe natural hair stores can be very successful. There is no question about it. The marketing of particular products, especially hair brands, is what has created the demand for Blacks to buying them up like hotcakes. The truth is there are much more natural hair goers than we give ourselves credit for. Women who wear their hair natural purchase wigs and weaves too. Plus, the vast majority of men are also natural. Yes, men shop at beauty supply stores too. When we account for the customers’ purchasing decisions, much of what they buy and much of what stores carry cater to the natural hair. I think we have placed natural hair wearers in too small of a box, only counting those with twists, braids or dreads as our natural hair population while we forget to through babies, men, boys, and senior citizens into the pot.
The Asian manufacturers, distributors and retailers have done a great job at predatory dumping. This is when businesses price their products severely under market value or under the competitors pricing when the business has competitive advantage because they either manufacture the product at a cheaper price or they have ownership of a large portion of the resources needed to manufacture the product. In predatory dumping, the prices are only temporarily depressed so as to drive out the competition, increase market share and establish a loyal customer base. After these three are established and they are dominating the market, which can take a number of years, they drive the prices up and exploit the customer. This is why it is called predatory. They prey on the customer and then dump all over them. Their tactics has made us assume the top branded products are the only thing on the market. We overlook smaller independent manufactures with great products, much of them black-owned.
To be honest, carving out a niche in this industry will only give us a long-term edge if we work harder at being top-notch business owners and become spending-conscious consumers. When we break down the dynamics of business development in our society, the true people in control is us. We often just don’t realize it. Businesses can use Push Marketing to persuade us to consume a particular product or business but we can utilize Pull Marketing to instead tell them what we will support. Over the years, we have allowed the tail to wag the dog and it has left us as the largest consumer group but, yet, with the highest unemployment rate of any group. It makes no sense. So yes, natural hair stores have its place in our community. Once we realize this target market is bigger than we assume it to be and we have the guts to get in and not wait for some other nationality to break ground for us.
Devin Robinson is a business and economics professor and founder of Beauty Supply Institute. An organization that trains, educates and consults with individuals interested in opening beauty supply stores or improving existing ones. For more information visit www.beautysupplyinstitute.com