The leading beauty retailer has partnered with Buxton for more than a decade.
Sally Beauty Vice President of Real Estate Paul Myrick discusses how the partnership with Buxton has helped the company grow over the last decade. The company, whose portfolio boasts more than 5,000 stores, utilizes Buxton's analytics for site selection, marketing, and maximizing revenue at its existing stores.
>> PAUL MYRICK: Hi, my name is Paul Myrick, Vice President of Real Estate with Sally Beauty. Last fall, we opened over 5,000 Sally Beauty Holdings stores worldwide. Since then, we’ve probably added 100-125 stores per year, 3%-5% annual growth. In that, 75% of that is in the U.S. With 5,000 stores, the question that always comes in is, “What’s the potential revenue of the store? Are we doing the potential revenue or is there more?” So with the model that Buxton built for us, not only are we able to look for new markets and open new stores, but we’re also able to better manage the existing portfolio and knowing if we’re hitting the market potential for that store or not. We couldn’t get through a week without Buxton. It’s a vernacular, we use it in the hallways, the operations people use it, the marketing people use it. I mean, it’s really a vernacular of Sally. It makes our job easier because of the analytical skills we can bring to the table now. Sally usually uses the approach to throw it all against the wall to see what sticks. Now, with better analytics, better tools, we can really identify what the best idea for the best opportunities are, which that previously didn’t exist. From a marketing perspective, a growing successful plan we had a few years ago was identifying our worst performing stores. So, again, during the Buxton model, we made up a site score for all existing stores. We compared that to what we’re missing at the most. We were able to focus on the bottom 50 stores and really do an enhanced marketing program around those stores through customer prospecting and understanding who our customer is, and it really did live to sell us at those stores. In the last several years, we’ve really been to small markets. We thought at one time we were pretty much done with small markets and Buxton really helped up define what a small market is and what kind of revenue potential is with the small markets. Even though most small markets don’t do the average revenue of a Sally store, we know what that revenue is and we can manage towards it. Keep the rent, payroll, and occupancy costs. So, we have a very successful small market program. With some of the analytics Buxton was able to bring to the table, they would help us rationalize and define a lot of urban markets that we are now going to start targeting, and the biggest thing with the defining a market is helping us identify revenue potential so that we can make our story successful. The analytical model, the Buxton model is great, but SCOUT is really what brought us into the next step. Most traditional, old school real estate guys use the paper maps and trying and introduce them to any technology was a challenge. For the first three of four years, it was really challenging to get the theme sold into using something different than what they previously had. But now I can tell you that all of the new reps and all existing store reps are in SCOUT daily. It’s a very easy to use tool, we’ve got all of our customer data in there as well as market data and we couldn’t have a real estate meeting without it, and we really couldn’t make a field trip without it. The thing that Buxton brings to the table is definitely the analytical skills and knowledge. They also have got a great retail understanding. A lot of the people that work at Buxton are former retailers that really get the retail piece. They speak retail language, as opposed to a lot of other people in the field speak analytical language, not really retail language. So we really found it refreshing that we could relate to our analytical partners and both speak retail language.