Drybar: “Turning Hot Air Into Big Business”

Building a blowout empire with a stellar brand, stylist team, and customer experience

“Let’s start with what Drybar isn’t. Drybar is not a hair salon.”

Making a mark in the multi-billion dollar beauty industry, Drybar offers stylish, affordable blowouts in a chic and classy environment. The business model closely aligns with its people-driven operating model.

Their tagline — “No cuts. No color. Just blowouts” — gets to the heart of two things this innovative brand has done so well: simplify an experience and change behavior for their target audience. Generally, women either pay a premium for a blowout at a conventional hair salon or have a subpar experience at a low-quality chain like Supercuts. Or, women simply don’t think to get blowouts because there is no where to do it easily as a stand-alone activity (without a cut or color).

Enter Drybar. With over fifty stores and $70M in annual revenues, up from four stores and $1.5M in revenues in 2010, Drybar has rapidly expanded into a national brand and one of the leaders in the burgeoning blowout segment. Founded by Ali Webb, a hair enthusiast and former PR strategist, and her brother, Drybar created a new, accessible way for women to get blowouts. “We’ve changed behavior,” Webb told the Wall Street Journal. “We are kind of like the fabric of people’s lives… It’s become kind of an affordable luxury.”

Drybar Store Image - Studio City

Business Model
The core business is offering a wash and blowout for $40 in a warm, stylish environment. The value of this blowout is not only the physical outcome (see the photo below for the menu of styles offered), but also the confidence boost that the blowdry provides. Core to the business model is the offering of a premium, flawless customer experience so that every customer is a repeat customer. The business model relies on rapid growth in customer base and strong repeat customers.

Drybar Menu

Additionally, Drybar has three other product lines to generate revenue. Drybar creates a custom-designed blow dryer (called “Buttercup”) in their signature yellow color and sells them through QVC. In collaboration with the former CEO of Laura Mercier, Drybar produces a line of hair care products that are sold in over 70 different Sephora locations. Finally, Drybar recently launched a new service called “Dry on the Fly” — an on-demand mobile app that lets you book a Drybar stylist that comes to you, which competes with the other on-demand beauty apps (i.e. Glamsquad).

Buttercup blow dryer

As Drybar grows in popularity and increase its brand equity, they’re moving beyond the business of washing and styling hair into creating and distributing products for hair maintenance. What’s most interesting about Drybar, however, is that they’re really selling something intangible, something psychological — the fact that women walk away happier and more confident when leaving a Drybar experience.

Operating Model
The operating model closely aligns to the business of selling confidence through blowouts:

Customer-centric experience. The company’s values include “making customers feel like a million bucks”. Creating a consistent, high-quality atmosphere across all 50+ locations is key to Drybar’s operations. A New York based architect designs each salon and they are laid out so that it feels spacious and warm. Upon entering, the customer receives complimentary drinks (including wine and champagne) and cookies. Chick-flicks play on flat screen TVs. All the blow-dryers are the same yellow color. No mirrors sit before you as you get a blowdry because Drybar, as Webb told the New York Times this April, doesn’t want you to see yourself with your hair wet. The aesthetic is both consistent and incredibly appealing to its target demographic.

No emphasis on throughput time (and use of a standard price). Competitors offer scales of pricing for blowouts depending on length and texture of hair. Drybar is decidedly simple: one price, several styles. Nothing else. While this poses a potential risk for the business long-term, Drybar currently doesn’t modify price even for one-hour plus appointments. They invest time in each customer and make the experience stellar every visit.

Investment in human capital. Hiring, training, and managing employees is a big part of their operating model. Webb initially auditioned all stylists in her apartment. All Drybar employees and stylists are treated like family. Stylists receive two-week training before doing their first blowout and get paid hourly wages (instead of on a per person rate like other salons). To keep efficiency high, Drybar trains stylists to never put down their blow dryers and insists they wear watches to keep the time. The company has 10 core values which are advertised on their website, including encouraging staff to share an opinion and maintain their individuality. The company currently has 3,000 employees.

Technology enables easy booking and payment. The Drybar team invested in heavily in a state-of-the-art mobile application and the latest in-store technology for check-in and payment (such as using Square to pay). Booking an appointment on the app feels seamless and encourages repeat customers. As stated above, Drybar now offers other products through the mobile app. Lastly, Drybar has a strong web presence with a lively blog and attractive email-marketing campaigns, keeping customers engaged.

Channel partnerships. Experiencing Drybar is not limited to its 50 storefronts. By securing partnerships with national beauty stores (such as QVC and Sephora), Drybar delivers values through its hair supplies and care products.

Implications and future

How operating model delivers business model:
Customer centric experience – gives people beauty and confidence, which drives loyal customers and repeat business
No emphasis on throughput time – each customer feels valued and cared for
Investment in human capital — the experience is consistent across all 50 locations — you can get any stylist and walk away with the same product
Technology investments — this enables a sleek experience before and after actually getting your cut

Going forward, Drybar will need to focus on maintaining the high quality experience and top-notch stylists to keep its customer base and increase market share. The store manager role will be key to its operational effectiveness. If Drybar chooses to increase growth through sales of its physical products, it will need to assess how to scale current manufacturing processes. Lastly, Drybar benefits from a first-mover advantage as it moves into new markets because women develop allegiance to one brand or location. Growing its real estate acquisitions team is also something it should consider to continue aligning its operations with its business model.

Sources
http://www.wsj.com/articles/SB10001424052970204831304576595322366093848
http://www.thedrybar.com/franchise
http://www.thedailybeast.com/articles/2013/07/13/blow-dry-bars-are-a-thriving-industry-disrupting-the-salon-business.html
http://www.businessinsider.com/drybar-founders-attribute-success-to-this-motto-2014-8
http://usatoday30.usatoday.com/money/economy/story/2012-08-12/drybar-blowdry-bar/56939214/1
http://edition.cnn.com/2014/11/18/business/alli-webb-drybar
http://www.nytimes.com/2015/04/26/business/a-curly-haired-girls-global-war-on-frizz.html?_r=0

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5 thoughts on “Drybar: “Turning Hot Air Into Big Business”

  1. Interesting post Nora! I love DryBar and think it is a fantastic company. Going forward, I am interested to see how DryBar handles the competition that is currently entering the market. For example, I have noticed a plethora of other blow out salons popping up, or start-ups with interesting subscription-based business models (e.g., Vive). At the end of the day, there is a low barrier to entry when it comes to blow-drying someone’s hair, and consumers are driven more by convenience. For example, if another blow-dry bar opens up near my apartment, I would probably go to that store as opposed to finding a DryBar. This is similar to nail salons and other beauty parlors where it is very difficult to generate consumer loyalty to a certain brand or chain of stores. As a result, scale here is very important, because having as many stores as possible in convenient locations would be what sustains costumer traffic as more and more players enter into this space. Nevertheless, as DryBar pursues scale, it may become challenging to maintain the operating model that you described, as DryBar would really need to focus on consistently replicating the same great customer experience and hiring the right people to give high quality blow-outs.

  2. Nora this is great, thank you for this post. I knew very little about this space beforehand and am very intrigued now. I’m especially interested about some of the standardization choices that Webb and her team have chosen to make in their operating model. In this day and age companies are always looking to squeeze an extra dollar out of their customers, thus it certainly is a bold gesture on Drybar’s part to not focus on throughput time and to have a single price regardless of type of hair and the time it takes to finish a blowout (even if it’s an hour plus!). As this space gets increasingly competitive (I bet they make a killing on margins now), I wonder how loyal the current customer base will remain. If a “Drybar copy” opens up in the neighborhood and offers a similarly nice atmosphere and $25 blowouts will we see the incumbent’s business get undercut? I guess time will tell. Thanks a lot for this.

    Adam

  3. As a frequent user of this, I noticed two things as the brand grew more popular. 1) The quality of the service went down, and 2) the salons I visited more frequently started lowering their prices for blow drys. I am concerned about copycats but even more so about the salons where women go for cut, color, and other processes, that compete on price. I know that if my usual place charges something that is less than usual but even five dollars higher, I would go there for reliability. I didn’t notice the uniformity in DryBar that I associate with making a reliable brand choice.

    Another concern is retaining talented staff, which make the whole operation run. Seeing as their price to the consumer is low, the stylists are missing out on the opportunity to make bigger tips off longer services, like color, cut, blow drys, etc. Does the volume make up for this difference? Furthermore, with this in mind, if blow drying only isn’t considered as a lucrative business for Dry Bar or an impressive credit on the resume/skill set building, I imagine they will have a problem with turnover in the future. I would be curious to see how they screen for capabilities as they expand.

    1. I totally agree with your two points. I noticed that the quality of service was fairly inconsistent and how good your blowout was largely depended on how talented your individual DryBar stylist was. As the brand grew more popular, I also noticed that I had to book further in advance in order to secure an appointment for the desired date and time (for example, I usually had to book Friday lunch time appointments at least a week in advance and perhaps even earlier if I requested a specific stylist). I think at the end of the day, I value consistency and convenience the most for a blowout so any competitor that is closer in location, easier to book, and has a reasonably reliable service would gain my business, especially if prices are comparable.

  4. Super interesting! In a world of “one-stop-shops” where you try to give the client everything they could possibly want, I find this type of proposition very valuable. My biggest concern is about throughput time though because at the end of the day, they make money based on the amount of clients they get. I don’t necessarily see the need to “sacrifice” customer experience if the investment in training the employees leads to same level of expertise that will end up with same amount of time dedicated per style. I agree that consistency in the time and output are the key elements to build a loyal clientele and clients should be totally indifferent about what stylist they get, I think one key component to that might be in the compensation structure, since all the stylists have an hourly wage, and the number of clients they serve doesn’t matter, there is no real incentive to improve their technique and improve cycle time at the same time. I think a balance between both compensation structures might be what DryBar needs.

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