Nick Arrojo's 12 Tips for Cutting Through the Amazon Jungle
The retail area at Arrojo Studio.
As a world-famous hair stylist, salon owner and product manufacturer, Nick Arrojo knows a thing or two about retailing take-home hair products to salon clients and he’s decided now is the time to get the industry talking.
As the e-retail phenomenon Amazon continues to build a presence in the world of professional beauty—allowing any client to order hair care products online and receive them within 24 hours—salon owners are growing increasingly worried and frustrated, but according to Arrojo, online competition is just a new excuse for salons.
“According to the market research company NPD Group, prestige beauty sales in the United States rose 6 percent in the 12 months ending in February 2017, resulting in more than $15.9 billion in sales,” he says. “Clients are buying from someone, so why is retailing in the salon still a challenge? Owners used to point their fingers at diversion, and now they’re complaining about Amazon. But the truth is no one from the beauty school on up really teaches hairdressers how to sell products, and few salon owners put any importance on selling products.”
Starting with a recent trip to Los Angeles, Arrojo is hosting a series of open dialogues with owners and hairdressers about the retail challenge, sharing some tips for what works in Arrojo Studio, his company of three salons in Manhattan, New York, and gathering ideas from other successful salons.
“When it comes to retail, we are an industry under assault, and we need to kick-start a conversation among ourselves that helps everyone be more successful on a day-to-day basis,” he says. “Each one of us needs to be more mindful about retail.”
Arrojo recently shared the highlights of his conversation with these 12 tips for driving retail sales:
A Trusted Beauty Advisor. “The more you retail to clients, the more they return to the salon and refer their friends,” Arrojo says. “Every time a client uses their take-home products, it’s a reminder of their salon experience. They have invested money in their stylist and their salon and they have a sense of trust in your recommendations. The physical product strengthens the connection between the client, the stylist and the salon. This proven link between client retention and retail performance is all the motivation stylists should need to improve their retail sales.”
Make Money a Motivator. “Lots of salons don’t pay commission on retail sales, or they do but the way they calculate it doesn’t make much sense,” Arrojo says. “Honestly, as an industry we don’t talk money to hairdressers—we really stink at this. The best retail commission structures are on a sliding scale that encourages stylists to sell more and rewards them when they do. We believe the sweet spot for commission is somewhere between 8 and 10 percent.”
Tie Retail to Performance. Stylists are more motivated when retail performance is tied to their overall performance which is used to determine raises and other salon bonuses. “At Arrojo Studio, the best retailers get the best opportunities,” Arrojo says. “For example, they get priority on new clients and the first opportunities to participate in special events. And, we offer 20 percent back on product sales for education. We’ve built a culture around rewards for performance, and it works.”
Create a Contest. “Most stylists see themselves as artists and they think of retailing as sales,” Arrojo says. “But a cleverly designed incentive can change one’s perspective. When owners design retail contests that focus the team’s mind on retail and offers a fun prize to the winner, stylists will retail.”
Two is Better Than One. “What’s your average retail ticket? The industry standard is less than the cost of one product,” Arrojo says. “So imagine what an average ticket of $25+ would do to your salon’s bottom line, as well as your stylists’ commissions? Getting every client to buy two products can really transform your business.”
Pass On Discounts to Your Clients. “Bigger salons have buying power that can really drive discounts on retail from the suppliers, but many owners tend to hold onto that money instead of passing the discount on to their clients so they have more profit,” Arrojo says.
He also notes the historical practice of doubling the cost of the product to determine its price is no longer realistic. “Online retail is incentivized retail, you have to find ways to incentivize your clients to buy retail,” Arrojo says. “The value-add sale works. Design promotions that reward clients who buy more with bigger incentives. You might make less profit per product, but you’ll generate more sales which leads to higher overall profits.”
If Clients Want Shipping, Give it to Them. “Some clients prefer buying products online because they don’t want to carry product out the door and around with them all day,” Arrojo says. “We offer free shipping to clients who spend over $50.”
Create a Product Playground. “Sephora has become the number one beauty retailer with a try more/buy more ethos,” Arrojo says. “It’s all about play. They know the longer they can keep a shopper in the store, the more they will sell to her, so they’ve created stations all throughout the store where clients can play with products.”
“Salons should create an experience center in the retail area where clients can play with products,” he adds. “Make sure your assistants periodically clean the tops and caps of products—keeping it pristine.”
Playing makes retail fun again, and in the salon environment, it’s easy for a stylist to become a client’s friend. “Put the product in her hand—not to sell it, but to show her,” Arrojo says. “Give a client a dryer and brush and show her how to style her new look. Ask her what she uses at home, and tell them what you are using and why. Let your clients experience the product and then choose for themselves. I always spray them with our spray conditioner so they can smell it. Fragrance is the number one factor when considering a product.”
Educate, Don’t Sell. “Stylists have a huge advantage over a sales clerk or an online store—neither can offer the expert personalized beauty opinion a stylist can,” Arrojo emphasizes. “Engage clients with ‘the hows and the whys’ about product, and show them how to get the most out of the products. Give them a great experience, and they’ll only want to buy from their trusted beauty expert.”
Talk Money. “Don’t be afraid to discuss the price of the product. No one wants a surprise,” Arrojo says. “Demystifying the price ahead of purchase de-stresses the client and makes them aware.”
Remember What is Measured Can Be Improved. “Make sure to track retail performance and give your team feedback constantly,” Arrojo advises. “When you focus on positive results, your stylists will too.”
Get Comfortable with Rejection. “Your stylists should position themselves as the beauty consultant,” Arrojo says. “They will get rejected and that is OK, it doesn’t prevent them from being the expert. When a client does purchase a product, when they come back in, ask how they liked it. If they didn’t like it, ask why not? Their answer could lead to another product recommendation.”