Retail Hero Chapter 10: Hairdepot

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Introduction:

hairdepot logo

Initially, his dream was to open hundreds of branches across Malaysia.

However, as the NEW RETAIL era had arrived, he realized that a large number of physical stores wasn’t the key to success. On the contrary, the integration of online and offline stores is much more crucial.

Compared with other retail brands in the market, Hairdepot had a head start. Before the pandemic, Hairdepot had already started to digitally transform its brand by combining online and offline stores.

As a result, they were well prepared for change at the start of the MCO. However, even though they are well prepared, the explosive growth became overwhelming, and the warehouse could not keep up with the enormous demand.

With the end of the MCO and the rise of new technologies, Hairdepot’s online sales have gone from 5% before the pandemic to 40% now.

Mr. Jeff Yong, the company’s founder, told the Exabytes New Retail team that the new retail system not only helps brands better understand their customers, but it also significantly reduces marketing costs.

Hairdepot's Kepong Baru Outlet
Hairdepot’s Kepong Baru Outlet

Hairdepot Helping Customers Understand Their Scalp and Finding the Right Product

Hairdepot has always insisted on helping each and every customer have healthy, beautiful, and smooth hair.

Since its establishment 17 years ago, Hairdepot has provided customers with useful and practical recommendations through professional scalp examinations, allowing customers to better understand their scalp and hair and find the best suited products.

Hairdepot sells products from all over the world, including hair care brands and products that are manufactured locally in Malaysia. They firmly believe that “only with a healthy scalp can there be healthy hair.”

Therefore, Hairdepot has always been very professional when it comes to choosing the product materials—which are only natural materials.

Mr Jeff Yong added that Hairdepot will also conduct scalp scans for customers so that they can understand their scalps better.

“So many hair problems are related to the scalp. For example, hair loss may be caused by a lack of water and nutrients in the scalp. After we understand the customers’ scalp problems, we will recommend the most appropriate products.”

Many may not be aware that the predecessor of Hairdepot was “K Care Shop.” Mr Jeff Yong’s mother used to be a hairstylist. In the past, they operated the brand in a semi retail-hair salon manner.

It was not until the opening of their eighth store that they realized that most customers could not understand the products they were selling from their store name, so they started considering a name change.

“It is quite troublesome to explain everything to each and every new customer. We want a store name that allows customers to know what we are selling.

So we came up with the name “Hairdepot,” which immediately tells our customers that we sell hair care products and that they can find almost any hair care product here.”

The Pandemic Accelerates Transformation

Despite the fact that the COVID-19 pandemic has had many negative consequences for businesses, such as customers’ inability to physically visit a store and make purchases, it has also highlighted the importance of technology and digital transformation.

Many businesses had to accelerate transformation in order to overcome the crisis of using technology.

The same can be said about Hairdepot’s digital transformation.

In fact, Hairdepot started preparing for digital transformation as early as the end of 2018. The company started to cooperate with a third-party logistics company in early 2019.

However, according to Mr Jeff Yong, no one was in a hurry for digitization at that time. Thus, Hairdepot too did not immediately establish a cooperative relationship with the relevant logistics company.

“It wasn’t until the outbreak of the pandemic in 2020 that the sales suddenly increased. Because our existing stock at the warehouse could not keep up with the overwhelming demand, Hairdepot quickly contacted the logistics company for help.”

“We received countless orders at that time. After having discussions with multiple parties, we finally stopped handling parcels by ourselves six months after the implementation of MCO.

Our agreement with the logistics company was to process about 200 parcels a month. In the end, it was 1,000 parcels a day.”

Hairdepot's Membership Reward
Hairdepot’s Membership Reward

Remain True to Original Aspirations; Making Timely Changes Whenever Necessary 

For Mr. Jeff Yong, as a businessman, the most important belief is that no matter what happens, one must persevere till the end. At the same time, one must be flexible and make timely changes. 

Mr Jeff Yong believes that there is no conflict between persistence and change. On the road to brand management, entrepreneurs should stick to the goal and their original aspirations when starting the business.

However, most often than not, the plan will never catch up with the changes. Therefore, when challenges and problems arise, one must know how to adjust his strategies and pace and change the way in which business is done.

“In business, challenges are norms. It is impossible to always have smooth sailing, so it is critical to move forward with faith.”

Rachel Yiap, Hairdepot 总经理 (左),Jeff Yong, Hairdepot, 创办人 (右)
Rachel Yiap, Hairdepot General Manager (Left),Jeff Yong, Hairdepot, Founder & CEO (Right)

The ‘New Retail’ Model Boosts Efficiency

According to Mr Jeff Yong, upon adopting the concept of New Retail, the company experienced the following:

(1) Optimization of Customer Management

Hairdepot uses CRM to understand customers’ consumption habits and find out accurately which products customers usually browse online.

Therefore, when a customer walks into the store, the sales representative can immediately know his or her preferences, online product browsing history, and other relevant and useful information.

“For example, what products the customer looked at on the website and the reasons a purchase wasn’t made—the use of CRM enables brands to collect these data and provide customized information, product recommendations, and services to the customer when he or she steps into the physical store.”

Hairdepot 会员机制
Hairdepot’s Membership Mechanism

(2) Lower Marketing Costs

Before Hairdepot adopted the New Retail model, it mainly relied on sending SMS to promote its products to customers.

“In the 17 years since its establishment, Hairdepot has collected information on more than 100,000 customers. Therefore, even if sending one SMS costs as low as 8 cents, sending to

100,000 customers at once would incur a huge expense, which means we can only send once a month.”

However, after implementing the New Retail model, Hairdepot can constantly interact and communicate with customers at any time through the smartphone application at zero cost.

hairdepot mobile app view

Future Outlook

By adopting the new retail model, Hairdepot has greatly improved the customer buying experience. This also includes marketing, where Hairdepot can focus more on improving product quality.

Mr Jeff Yong said that the future direction of Hairdepot is to launch more high-quality products and sell them through more third-party channels.

“Our goal is to allow more consumers to have access to Hairdepot’s products at an affordable price.”

kimma and hairdepot team

Mr Jeff Yong added that they also plan to use vending machines to sell Hairdepot products at LRT stations, apartment buildings, and campus dormitories in the next few years, so that the public can buy them conveniently and solve their hair care issues at any time.

“Our third plan is to help more retailers, micro-businesses, and professional hair salons carry out OEM production. Hairdepot has 17 years of experience and can bring effective and reliable hair care formulas to merchants.

Through our OEM production, merchants can launch their own brands in less than 4 weeks.”

hairdepot jeff yong exabytes retail hero

Be Our Retail Hero Now

Every retail brand has a great story behind it. Let’s be our Retail Hero and your experience now.

Visit the Retail Hero official website for more Retail Hero Stories and nominate the retail brand you love.

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