Until now, walking into an Enrich Salon meant only getting a haircut, a facial, or any other beauty service. But every new Enrich Salon will now have just as much space dedicated for retail shopping of beauty products as the company undergoes a strategy reset from Enrich Salons to Enrich Beauty.
Beauty Salons chain Enrich, currently present in six cities, is transitioning from being a beauty services player to a beauty retailer that will house several brands across beauty segments from makeup, skincare to hair care and fragrances.
According to Enrich’s CEO Vivek Bali, there is already an existing captive audience that visits the salon every month. “Customers come here for services every month but they go outside to buy these products. But why should they go elsewhere? They’re here for 40 minutes to an hour and so can also buy beauty products at the end of it or at the beginning. So it’s like a one-stop-shop for all things beauty. That’s the larger idea behind this execution,” he adds.
The opportunity too is large. India’s Beauty and Personal Care (BPC) market that was sized at Rs 1,267 billion in 2019 has been growing at a CAGR of 13 percent in the last three years. While the market fell to Rs 1,120 billion in 2020 due to the first COVID wave, it is projected to grow at a CAGR of 12 percent to reach Rs 1,981 billion in 2025, according to a RedSeer report on the India Beauty and Personal Care and Fashion Markets commissioned by Nykaa for the purpose of its IPO.
And while the BPC market is still largely unorganized, the share of the unorganised BPC market reduced to 71 percent in 2019 from 77 percent in 2016 thanks to evolved shopping habits.
The appetite has also seen large format retailers like Shoppers Stop betting big on their beauty segment going forward.
Leveraging this opportunity, every new Enrich store that the company will now open will have both beauty services, and a dedicated retail space housing mass, premium and luxury beauty brands. Enrich opened its first beauty destination store in Powai in Mumbai, with another soon set to open in Malad.
These stores will see brands such as Maybelline, L’Oreal, NYX, Remy Laure in beauty, and also premium and luxury brands such as Givenchy, Elizabeth Arden, Calvin Klein, Hugo Boss, Ralph Lauren, Versace, Burberry, among others, including its own brand Born Ethical. Enrich has currently around 100 brands in its kitty and plans to add more brands every year.
“We fairly curate the range in terms of what’s available in the store. It’s not the regular offerings. You’ll see a little more premium offerings within that range. For example, in Lakme, you’ll see the 9to5 range, and the Absolute, but we don’t keep the others,” Bali adds. A large number of brands that Enrich brings on board will also be present online as the company also looks to expand its omni-channel presence.
Currently, a majority of revenue (about 70 percent) for Enrich comes from beauty services, which Bali says will continue to remain its core focus. However, as the company opens more stores and expands its presence under the new format, the revenue mix could change to a 40-60 percent where 60 percent revenue comes from beauty retailing, while growing revenue from both pies, with about 14-19 percent coming from omni-channel.
Enrich’s strategy reset is not only about becoming a retail destination but an experiential beauty retail, where the company is looking to add service elements such as an express facial, free ‘mini makeovers’, a live lipstick bar allowing customers to get customized lipsticks made, among others.
This also comes on the back of Enrich Salons recovering from the blow of two COVID waves. Just as salons were charting a recovery from the first wave of COVID in late 2020 and early 2021, the second wave forced them to shut shop yet again. Enrich too, in late 2020, reportedly put a pause on its store expansion plans.
“We know 2020 was a low year for almost everybody in the industry. We always gauge it with 2019, so when we start comparing to that, in September, we were at about 90 percent of 2019. In October, we were almost 108 percent over 2019 levels and we’re seeing a better Diwali than 2019,” Bali adds.
However, this strategy, Bali says, wasn’t driven by the impact COVID had on the salon industry, but was in the works prior to the pandemic.
Adding beauty retailing would mean the company will now compete with the likes of Sephrora, which has around 24 stores and Nykaa, which has over 70 physical stores in the country.
“One is heavy on e-commerce, the other heavy on offline, and we have a combination of brands which are in both. The market is large, and there’s enough room for everybody to play,” Bali says, adding that he doesn’t see direct competition in a format like this.
However, there are other salon chains such as Juice Salon, YLG Salon, Truefitt & Hill and Jean-Claude Biguine Salon & Spa, among others that also reportedly transitioned into beauty retailers in a bid to offset the impact of the pandemic.
After the second store is opened in Suburban Mumbai, by December-January, the company plans to open around six more stores of which five will be in Mumbai and one in Pune.
There are also plans on the anvil to foray into new markets such as Karnataka, Chennai, Delhi, Kolkata, among others, giving Enrich a national presence in 2022. The target, Bali says, is to open 8-10 new doors every year. Meanwhile existing Enrich Salons too, will be upgraded to match the look and feel of the new format.