Sally Beauty Suspends Transformation Plan to Tackle COVID-Related Challenges
Cosmetic and personal-care companies have gained immense popularity among consumers in the digital age. According to a Forbes article, the beauty industry was valued at a staggering $532 billion in 2019.
Social media platforms, such as Youtube, give viewers access to makeup tutorials and product reviews. Niche beauty communities have emerged as a result, driving increases in both online and in-store purchases.
Sally Beauty Supply stands at the forefront of this demand with over 5,000 global stores and more than $3.6 billion in revenue per year.
However, Sally Beauty Supply has long faced increasing pressure from its competitors like Ulta Beauty and Sephora. In response, the company launched its Transformation Plan in April 2018.
The Transformation Plan has four key strategies:
- Improving customer experience
- Advancing digital commerce capabilities
- Enhancing retail fundamentals by improving loyalty programs
- Curtailing costs by achieving additional selling, general and administrative savings to offset inflation
However, Sally Beauty Supply has been forced to abandon this plan in order to navigate through the unprecedented challenges caused by COVID-19.
Before the pandemic, the company’s focus was to shift its business model to drive out competition. Now, the company’s approach to COVID-19 is more crucial than ever in achieving success among competitors.
Two days before Sally Beauty published their ‘COVID-19 Related Update’, Briana Mejia posted a petition on Change.org, demanding that all Sally Beauty stores shut down out of respect to its employees. The petition received 3,613 signatures to date.
“Sending hand sanitizers and having employees wipe everything every 2 hours is not enough!!!” Mejia wrote. “For the next 2 weeks, we demand to have ALL stores close and pay employees!!!! Beauty supplies are not a necessity at this time, please consider your employees!”
In the update, Sally Beauty explained its plans to close retail and wholesale storefronts until April 9, 2020, at the earliest. However, Sally Beauty was among the last of its competitors to take this action.
In addition to closing storefronts, many of the Sally Beauty employees have been given temporary leaves of absence or decreased salaries.
Sally Beauty Holdings, Inc. staff and employees in the United States and Canada were furloughed with two weeks’ salary and medical benefits. Christian Brickman, Director, President and Chief Executive Officer, and his Board of Directors also decreased their salaries by 50% until the duration of this pandemic.
Staying true to the technological aspect of their Transformation Plan, the company promised that its website and mobile application will remain fully functional through the duration of the pandemic.
Even with these changes and assurances, customers were still upset.
Many are experiencing difficulty with their online orders through the company’s partnership with Postmates, which is supposed to give customers their products on the same day of purchase. A number of them have tweeted that their orders have not shipped or only a few products that they ordered arrived.
I ordered about 2 weeks ago, and only today received HALF of my order.
— mel (@melissafryy) April 10, 2020
Some expressed discontent with the customer service line.
@SallyBeauty Can I get in touch with someone? Literally can’t reach anyone by email, phone, chat…y’all took my money, but won’t take my calls ?
I need my stuff.
— Kitty Cough ?? (@SielaMissi) April 10, 2020
Others are frustrated that, unlike Sephora and Ulta Beauty, the company decided to switch its primary focus from hair care to sanitation products.
Vanessa Vasilia was disappointed when she found that she could not turn to her usual source for quality hair products.
“I’ve been stuck at home, and I needed something to do to my hair because I figured this would be my one and only opportunity to do something that I couldn’t normally do in non-quarantine times,” Vasilia said in a direct message. “I ordered off of Sally’s online and was surprised to see they had giant packs of gloves…but not the hair dye I had hoped for.”
Instead of focusing on these complaints, the company is directing its efforts to make financial decisions.
The company announced in a press release the appointment of Marlo Cormier as Senior Vice President – Finance and Chief Accounting Officer. The company hopes that Cormier can “help [them] propel Sally Beauty Holdings through our COVID-10 reset and our continuing Transformation.”
Sally Beauty also addressed its plan to withdraw full-year financial guidance, information that the company provides as an indication or estimate of its earnings, for the rest of the year.
Many of Sally Beauty’s competitors, however, are focusing on the importance of social media during this time.
Sephora hosts daily challenges on its website, including ‘100 Days of Lipgloss’, ‘100 Shades of Eyeshadow’, and ‘What Makeup Are You Wearing Today?’ as a way for members of the beauty community to interact with the company and each other.
In addition, Ulta Beauty encourages online sales by providing discount codes on various products on their Instagram, @UltaBeauty. The account also re-posts images of makeup looks that consumers created during quarantine using products sold exclusively at Ulta Beauty.
In contrast, Sally Beauty’s social media platforms remain silent with only two posts on Facebook and one on Instagram that addresses implications caused by the pandemic.
While the company has responded directly to a few customer’s concerns on Twitter, they merely plead for patience due to high volume requests and suggest that customers try the hotline one more time. Customers have replied days later, noting that there has not been any progress made on their orders.
Company representatives did not respond to multiple requests for comment for this article. However, the @SallyBeauty corporate account said that “Due to the circumstances of COVID-19, we’re focusing our resources on customer needs.”
Select locations continue to offer contactless curbside pickup where permitted.