Why did Amazon open a hair salon?

Discussion
Photo: Amazon
Apr 27, 2021
Tom Ryan

Amazon.com has opened a hair salon in its latest bricks-and-mortar experiment. The London location promises to allow the online giant to test new technologies, expand its B2B business with haircare professionals and potentially explore the haircutting opportunity.

Called Amazon Salon, the two-story, 1,500-square-foot location offers entertainment streaming on Amazon Fire tablets at each styling station as well as augmented reality hair consultations that lets individuals imagine a hair color before the dye is made up.

Amazon is testing a “point and learn” technology that allows customers to point at an item on a shelf and display product information on a screen mounted behind. The customer can then scan a QR code to order an item for home delivery.

Amazon Salon could be a showroom for technology bound for other salons. Just Walk Out technology was piloted at Amazon’s own Go convenience stores before being licensed to others.

The pilot is also expected to support the company’s B2B ambitions. Amazon’s Professional Beauty Store, which offers wholesale discounts to hair stylists, launched in 2019 in the U.S. and just expanded to the U.K.

Why did Amazon open a hair salon?
Photo: Amazon

In its statement, Amazon said the store gives hair and beauty businesses “convenient access” to more than ten thousand salon and spa products and supplies. Professionals are promised wholesale pricing and invoicing, no minimum order value and fast delivery.

John Boumphrey, UK country manager, Amazon, said, “We want this unique venue to bring us one step closer to customers, and it will be a place where we can collaborate with the industry and test new technologies.”

Amazon Salon is described by the company as “an experiential venue” and no other locations are currently planned.

However, Amazon already operates Amazon Home Services, a marketplace for on-demand contractors, and some believe they may explore hair care services.

“My immediate knee-jerk reaction is that the professional services aspect is kind of a necessary evil for them, and that they’re doing this to establish some credibility and a foothold” in the professional beauty space, Jason Goldberg, chief commerce strategy officer at Publicis Groupe and RetailWire BrainTrust panelist, told The Wall Street Journal. “But Amazon has surprised us before, and I certainly wouldn’t take it to the bank that they don’t have aspirations to make money on this.”

DISCUSSION QUESTIONS: What do you think is behind the opening of Amazon Salon? Where do you see the opportunity for Amazon to support the salon and professional beauty space?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"If Amazon employs top hair designers this could be big."
"Overall Amazon Business is growing like a weed, and moves like this are why. Amazon looks like no other player in the SMB procurement space."
"Amazon never misses a trick. They look for a wedge opportunity, a segment of retail that is not dominated by one player, and then pounce."

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29 Comments on "Why did Amazon open a hair salon?"


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Shep Hyken
BrainTrust

It’s simple. Amazon wants to be a part of their customer’s everyday life. Hair salons, grocery stores, retail and more, Amazon will continue its goal of being a part of our daily lives and our culture. Not to mention, the retail side of the professional beauty space is a HUGE market.

DeAnn Campbell
BrainTrust

So right about the professional beauty space – it’s one of the most underserved markets in the U.S.

Neil Saunders
BrainTrust

I do not believe Amazon necessarily has a burning desire to build thousands of hair salons all over the U.K. and other countries. However Amazon is a very experimental company and opening a real-world salon to test how various technologies, such as AI, work allows it to learn and refine its offer so that the technology can be used in a variety of situations and even sold and licensed to third parties. The salon will also allow Amazon to learn more about the beauty business from both the consumer and salon/supplier side. These insights can be used to refine its own beauty offer, especially in the business-to-business space which is an enormous market with untapped potential.

Mark Ryski
BrainTrust

While I doubt that anyone saw this one coming, it’s clear that Amazon’s relentless pursuit of new markets has no bounds — this is another example. While it’s hard to know exactly what Amazon’s long term aspirations may be for Salon, the fact that they have set up an actual salon means that they are serious enough about the opportunity. Whether this turns out to be meaningful or not, you have to give Amazon credit for for the attempt. In any case, they will collect data and learn.

Bob Phibbs
BrainTrust

Most thought pharmaceuticals, banking, and insurance were their next foray, not beauty salons. I’m sure plenty will say, “Oh, it will never replace the local beauty store” but that’s naive.

It would be a mistake to write it off without seeing the implications – Amazon payments for free to beauty salons so Amazon can have even more data points to collect now that cookies from Google and privacy changes from Apple will cut off those data streams soon. Make no mistake, this isn’t trial for beauty salons – it’s trial at new ways to get data.

Richard Hernandez
BrainTrust

Well, it’s not really a surprise. Amazon got into the pharmacy business so this is another extension into the brick-and-mortar arena. It ties back into what they sell and offers another service they can offer to customers. I just hope it doesn’t hurt the independents in the market and they can keep adapting their trade.

Matthew Brogie
BrainTrust
11 days 17 hours ago

I personally love seeing Amazon play in the brick-and-mortar realm! There has to be a connection between the physical consumer and the products they want to purchase online. This move by Amazon provides that connection for personal grooming products, and is a great laboratory to inform what might work for other segments of CPG. Creating a physical experience, and both measuring AND setting the relationship between humans and products will open the gateway to more online purchases. In a way, Amazon is leveraging the physical relationship in order to create online loyalty; a fantastic move.

Georganne Bender
BrainTrust

Three words: Total World Domination.

Seriously, why not? It’s a 1,500 square foot daily focus group, giving customers a look into what Amazon has to offer — you can bet there will be shopping while color sets. Equipping each station with an Amazon Fire tablet is cool, and it beats old magazines. The AR consultation will let customers see what a new ’do will look like before they commit to a cut or color. If Amazon employs top hair designers this could be big.

Jennifer Bartashus
BrainTrust

Amazon is always about trying new things and gathering customer intelligence. One thing about the company’s culture is that it isn’t afraid to take risks to try out a concept and then stop if it doesn’t pan out. Remember Amazon Spark? Amazon Fire Phone? Amazon Restaurants? But learnings from each of those made Amazon stronger and informed other endeavors. The beauty salon seems no different. If it works – maybe it creates opportunity in other urban centers over time. If it doesn’t, Amazon will still have gathered valuable information that may resurface in B2B or other customer-facing ventures.

DeAnn Campbell
BrainTrust

The article said it well, Amazon has learned a lot about our product buying behavior, now they want to learn how we interact with services in preparation for expanding into brick-and-mortar. It’s all part of their ultimate plan for world domination.

Dick Seesel
BrainTrust

Hair salons represent a business with a low level of market concentration and standardization — other than a handful of price-driven national chains like Great Clips. At the higher end, providers of hair, nail and beauty services represent a vast number of independent operations. (It’s hard to tell much about Amazon’s pricing strategy from its website.)

This is literally a high-touch business that doesn’t lend itself to virtual transactions. Amazon has identified a brick-and-mortar opportunity to gain share, and to put its unique spin on the in-store experience.

Jeff Sward
BrainTrust

This is all about personalizing product and process — at scale. Groceries, health care, personal care. Amazon becomes the go-to purveyor of a personalized (or family) range of products and services.

Cathy Hotka
BrainTrust

I’ll take a different tack. I’ll guess that Amazon thinks that, with a combination of technology and name recognition, it can become the dominant force in personal care services, winning market share against less efficient independents. Amazon never “thinks small.”

Dick Seesel
BrainTrust

Reminds me of Blockbuster swallowing up market share from independent video rental stores back in the day, (Although that model eventually became obsolete.) It had a standardized business model (and lots of locations) in a fragmented category and it worked for a long time. Amazon may be looking for businesses that can’t be “streamed” quite so easily, and hair salons are among them.

Lisa Goller
BrainTrust

We all have bad hair during the pandemic. (Totally wearing a Mandalorian helmet on upcoming Zoom calls.) Demand for beauty services is set to boom.

Amazon already dominates B2C. Expanding its omnichannel excellence across B2B segments will ensure long-term growth.

Opening Amazon Salon lets Amazon sell products and services while getting closer to consumers. Beyond virtual try-ons that allow risk-free experimentation with hair colors, this business model links salon products to Amazon’s online store.

Personal care professionals have been hurt by the pandemic. Amazon can support beauty experts by making their business models modern, efficient and trustworthy by selling certainty and confidence in what customers are actually buying. AR tech visualization means no regrets due to a bad ‘do.

Amazon can also help beauty pros deliver personalized service to maximize marketing relevance, revenue growth and loyalty.

Gene Detroyer
BrainTrust

I don’t see Amazon building out and managing thousands of salons around the world. I do see Amazon piloting several around the world to showcase technology that would be desirable to thousands of salons around the world.

Ricardo Belmar
BrainTrust

This is part tech showcase, part tech experiment, part B2B expansion, and part data gathering and learning experience. In other words, it’s just another form factor to everything we normally expect from Amazon in brick-and-mortar experiences. This isn’t about becoming a dominant force in hair salons. It’s about learning new ways to collect data on customers by trying new experiential technology and new ways of delivering personal services in a physical environment versus an e-commerce environment. Amazon always has an experimental angle to everything they do so they can apply learnings from one project to another. Simply ignoring this and calling this a “one-off” and expecting that Amazon will never open another salon or another unique category space is a mistake and short-sighted thinking. Amazon always plays the long game, regardless of cost in the interest of learning and this will be no exception. We shouldn’t be surprised to see technologies trialed in this space showing up in other physical spaces or in other Amazon services.

Patricia Vekich Waldron
Staff

Amazon takes a strategic approach to dominating categories (and industries) which it started doing decades ago with books. This is just the latest and most comprehensive initiative.

Brandon Rael
BrainTrust

Amazon has every intention and ambition to interact and engage with its customers well beyond its e-commerce marketplace. An Amazon-run hair salon may seem like a novelty; however there is a science component, including AI, machine learning, and personalization, that will go with the art and the experience that will drive loyal consumers to this salon. The personalization side is where Amazon could thrive and potentially turn this into a relatively significant business.

We should expect Amazon to continue its relentless level of innovation and drive new experiences with its customers. Health, wellness, beauty, and salons are prime areas for Amazon to capitalize on. The beauty sector has plenty of retail competition, however the salon segment, along with its retail component, may be ripe for disruption.

Rick Watson
BrainTrust

First, this allows Amazon to get salon pricing and products for its own first-party sales (some pro products are only sold to salons).

Second, this allows Amazon to learn about a key consumer segment that has a big impact on the beauty category in Amazon Business.

Overall Amazon Business is growing like a weed, and moves like this are why. Amazon looks like no other player in the SMB procurement space.

Cynthia Holcomb
BrainTrust

Amazon exhaustion and then acceptance. Let’s face it, a decade from now society will be eating, sleeping, shopping, getting healthcare, and beyond from them, as Amazon monitors and usurps small and large businesses alike, right out of every aspect of our lives. Amazon does this so easily, day by day, month by month, year by year, in front of our slumbering eyes.

Mohamed Amer
BrainTrust

Amazon strives to get closer to their customers in any and everything they do. Billed as an experiential venue where Amazon showcases new products and technology, the pilot hair salon, with its top-notch stylists, will create immediate B2B credibility for their Professional Beauty Store. Simultaneously, Amazon will be able to test and evaluate the packaging of service and advanced technology offers, and associated human interactions.

Amazon is creating the future look and feel of beauty salons and can follow on with turnkey subscription solutions for that industry to benefit the preponderance of small operators. The company will gain even more vast amounts of data while creating experiential solutions for a hugely underserved market.

coreyhammond
Guest

A space to test technology with a specific customer group makes a lot of sense. However I wonder if Amazon is also trying to figure out how to showcase their own brands in a space filled with high-intent consumers. There’s so much noise on Amazon search results, whereas a salon chair is a great way to not just pitch a product, but also let customers use it before buying. If Amazon doesn’t plan to open more salons, maybe they’re testing how to best connect with customers and convince them to buy Amazon private-label.

Joe Skorupa
BrainTrust

Amazon isn’t likely to open a national chain of hair/beauty salons, but it is likely to use Amazon tools — technology, data, supply chain, fulfillment, low pricing, infrastructure — to support the salon and professional beauty space, which is underserved and, as proven during the pandemic, as close as it gets to being indispensable to many people.

Venky Ramesh
BrainTrust

There is digital business (Amazon’s turf), physical (most retailers) and then there is phygital – a nascent area in every business which is still undefined and evolving. That’s the pie I think Amazon is after. Why a hair salon? My guess is that gives them inroads into the beauty industry, which is an attractive, high margin business and where the consumer adoption of tech is the highest among all consumer products and services sectors.

Gary Sankary
BrainTrust

My first response was “because they can.” Snark aside, there is a bit truth to that statement. If Amazon really sees themselves as the primary purveyor of all goods and services for their customers, this makes sense. They are creating new opportunities for commerce which blend physical and digital retail.

Ken Morris
BrainTrust

Amazon never misses a trick. They look for a wedge opportunity, a segment of retail that is not dominated by one player, and then pounce. The salon space is fractured, with many small salons across the world. There is no dominant player — so in steps the giant. I wouldn’t be surprised if they do the same thing with furniture that they have done with books and toys. This also gives them a play to challenge Ulta and Sephora in the beauty space. Amazon is the ultimate category killer.