by Miko Branch
Before we came along, the mass retailer’s highest-priced hair product in the ethnic aisle was around $5.95, and an “expensive” item in this category was unheard of. Mass retailers did not believe that a customer would care about her hair to the point where she was willing to spend whatever it took for the desired results. Before Miss Jessie’s proved that customer base was powerful, it would have been difficult for a brand and product to command a sticker price of higher than seven dollars. Shoppers were not hesitating to pay thirty-eight dollars for a professional-sized jar of Curly Pudding or fifty-eight dollars for a jar of Baby Buttercreme. This proved that our pricing could work, creating a middle ground for other brands to come in under our price. Miss Jessie’s proved the unthinkable, making a place for competing brands to come to market and charge nineteen dollars or even twenty-five and still be considered reasonably priced compared with an item from the Miss Jessie’s product line. All in all, the category was elevated, creating a vessel for other independent and often minority- or women-owned grassroots start-up businesses to set up shop en masse.
As good as our presence in Target was for other brands, the move was good for us, too, for obvious reasons. We could generate significantly higher sales volume and gain nationwide brand recognition. We could not have paid for this kind of marketing. We have to give Target credit for giving Miss Jessie’s a premium spot.
When the news hit that we were going in Target stores, “the industry,” including competitors, our existing salon partners/retailers, and suppliers, were quick to say we would fail.
“You know they are going to slash their prices,” one of them said.
“You know you just sold your soul to the devil,” said another.
“Don’t come running back to us when they destroy your business,” our smaller mom-and-pop shops said.
“You will never be able to keep your price point in Target,” a distributor told us.
“Just who do they think they are, going into Target without cutting their prices?” asked a customer on Facebook, one of many who hoped to get their favorite Miss Jessie’s product for less.
“They should go to Sephora or Ulta, not Target. That’s crazy!” commented several beauty bloggers.
Before Target contacted us, we had always envisioned our product in Sephora. We even sent them our product range after researching submissions guidelines online. We got rejected. But Target had the vision. Some of our competitors laughed and told us we were making a dumb move, as they vowed to stay out of mass. At a trade show, one of them even told us, “We don’t play those mass games.”
We proved everyone wrong. Initially, most of our sales had been through our website, and Internet consumers don’t usually distinguish between whether a brand is found in Sephora, CVS, or Target. That meant we didn’t need to be too precious about who carried our product as long as they were doing right by us in terms of promotion and product placement. The key to our next phase of growth was to make the product as widely available as possible, and that’s what being in Target did for us; customers were excited to get it at their neighborhood Target.
The partnership has been a huge success. We’ve gone from being in 225 Target stores in 2010 to being in nearly every Target store. Target has been happy with our sales, and we’ve been a permanent fixture on the end caps—something that’s unheard of in the retail industry. And this approach is winning.
LEARNING CURVE
As in all new relationships, we hit a few bumps—big ones. When you are pioneering a new product category, this is bound to happen. In a sense, we were all feeling our way through unfamiliar territory.
Early on, a few of our retailers, including mass, did what they would do with any of the other brands they carried—they reduced prices. The problem was, they had promised they would not. Word came to us quickly, through one of our disgruntled retail partners in Atlanta—a smaller player who was justifiably angry over being undercut by a retail giant. It was not something that we had agreed to, and we were not happy.
Pricing has always been a big issue with our big-box retail partners, who initially did not understand or appreciate our marketing strategy. We wanted our promotions to be an event and meaningful. Prior to entering big-box chain stores, we had a traditional Buy One Get One (the “BOGO”) Free promotion. It was Titi’s idea. This promotion became our way of spreading brand awareness, because it allowed people to try the products. We also wanted to show our appreciation to our loyal Miss Jessie’s fans, and it is our way of giving back. That’s one of the reasons why we plan the BOGO at Christmas time and toward the end of the year when folks are more likely to spend on affordable luxuries. As a child, I remember how much everyone around me wanted Christmas to be special, and it makes me happy to think that the Miss Jessie’s products will be a part of someone’s holiday. The BOGO offer is very expensive for the business, but we always plan ahead for it, because it has become a Miss Jessie’s tradition. We explained our marketing approach to our retail partners, who at first agreed but then later reneged. When our first big-box partner started to discount the products, it turned our marketing strategy upside down and created instant chaos. It was their product now, and they could do with it what they wanted. I understood that. But what if they did not have the product or could not get the product? If we stopped shipping the product, then at least one problem would be solved. But other problems would follow.
Though we understood the stakes, we felt it was critical to stick to our principles. Despite what we might lose, we weighed our options and stayed focused on what we did have. We knew we could afford to say no to mass retail because we were already profitable and ran our business and personal finances with surgical efficiency. We asked ourselves if we were happy with what we had on our own, which was more than we’d ever dreamed. The answer was yes, we were willing to risk a whole lot of money—more than we had ever seen from one account. When we opened our first banking statement after the first few checks were deposited, we were in disbelief.
As we tried to salvage the situation with the retailer, raising our objections, they appeared unconcerned. Indeed, even our own marketing liaison with mass, warned us that if we complained too much, we’d lose the account. In the end, we had to take that chance.
“Okay, stop shipments,” I told everyone.
“What? You can’t do that!” shrieked our bookkeeper. “You risk losing the whole account.”
Our whole team, including Titi, was looking at me as if I had two heads. We had to stick to the marketing strategy that we knew worked. I held firm, well aware of what it could mean for the relationship. Once she understood my reasoning, Titi was on board with the decision.
It was a costly lesson all around. We left a few million dollars on the table, and the brief absence of our products from the shelf allowed our competitors to gain momentum. Reporting data companies IRI and Nielsen, which the industry relies on to report sales, were tracking our competitors’ robust growth while we were showing zilch.
Be true to yourself, no matter who you are doing business with. Never forget the core values and authentic style that brought you success in the first place.
After some back-and-forth with the big-box retailer, we reached an agreement with our partner. It was a good lesson, reminding us that as we scaled up, we had to stay hyper-vigilant about what was happening in these stores, in order to maintain consistency and stick to our core principles as a business.
A NEW PLAYBOOK
It would have been all too easy to become complacent and go by everyone else’s playbook. The money was flowing in, so who were we to question the conventional wisdom? The mass retail industry has a set of rules and certain ways of doing business, but those rules just did not make full sense for our business. We did not understand, for example, why we had to pay a distributor an extra 15 to 25 percent more of our business when retailers like Target, CVS, Walmart, or Walgreens came directly to us. We already had a fulfillment company and shipper and did not need those addi
tional services. We did not understand why we would be charged for damages that could not be confirmed. We were confused as to why we had to pay advertising allowances that would not guarantee we would even appear in the retailer’s ads or circulars. There was a long list of additional charges and deductions for the privilege of doing business with mass retail, and we dared to question all of these practices. But we weren’t presenting all of these challenges just to be difficult. We simply did not have the extra money to throw away on unjustifiable expenses. Our mass partner’s power was undeniable, but so was our desire for autonomy. We have learned to forge a balance between the two.
Be bold. It is always possible to rewrite the rules if you dare to ask.
DECISIONS, DECISIONS
As we made the news, consultants and middlemen were coming out of the woodwork, making promises and offering solutions that seemed self-serving and unethical. Some came highly recommended by our retail partners. When you enter into these big-box deals, there’s an entire industry of marketing people, distributors, brokers, manufacturing subcontractors, and private investors who want a piece of the action, promising to make your life easier as they show you the ropes.
Don’t be afraid to make your own decisions. When something doesn’t pass the smell test, it’s for a reason.
My discerning nature runs high and deep on a normal daily basis, so I was experiencing extra paranoia as we entered this early engagement with mass retail. Years earlier, we had been running a top-secret business from our home, and we kept that self-protective mind-set when it came to growing our business. It took time to feel fully confident and trust in the process, or at least it did for me. Titi was a little more prepared to dive right in. She wanted Miss Jessie’s to reach its highest heights and was pushing for growth. She thought it wise to shake some of the old, super-secretive ways in which we did business. She encouraged me to put fear aside and listen to some of the things these people wanted to share with us. “Hell,” she said, “it might be to our benefit.” Titi imagined that at this high level of corporate and mass retail business, individuals would be cooler and more laid-back in their willingness to help and share information. She made a convincing case, so I set aside my suspicions and gave the new relationships a try.
One new relationship came referred by a buyer from our retail partner. This person introduced us to the owners of a company that was not in the hair space at the time but had some experience in mass retail with other products and was hoping to get into the hair category. It was perplexing to me that this kind of connection was being heavily pushed. After they launched their hair line, they would become a direct competitor. However, the buyer insisted that this company could help us grow our mom-and-pop business and that we should speak with them.
We all met and went to dinner. Titi and I personally liked the principals of this company. We even formed a kind of family bond. Later on, when they gave us a tour of their facility, we were able to see their hustle. It looked a lot like our operation, and I was particularly proud to see their accomplishments. I wasn’t sure how they planned to make it in the natural-hair-care category, moving from their core business, but I wished them the best.
Our new friends offered to make our products for us. They also offered to ship to our mass retailer, explaining that they wanted to ensure we get on board as smoothly as possible. As we processed the proposition, my paranoia and fear kicked in. Doing business together in this way would have required us to turn over our product formulas—the very things we had invested so much time and trouble to develop and protect. It was like asking Colonel Sanders to hand over his secret recipe. They could have knocked off our product with that information. In the arrangement, they would have been privy to all kinds of other proprietary information, including how much product we were shipping and how much money we were making.
I’ve never pretended to be a sophisticated businesswoman. Once things start getting fancy, I admit I can get lost. In this case, it prohibited me from speaking my lack of understanding out loud. Maybe, I thought, this was a normal way of doing business in mass retail. Maybe I was missing something. At one point, our new friends said, “This ain’t no nigger shit!”
Their unfortunate choice of words aside, perhaps they were right. Perhaps I needed to adjust my way of doing business and go with their suggested strategy. It left me feeling conflicted. Most of all, I did not want to let Titi down. I had promised her I would be more open to new concepts as we ventured into this uncharted territory. Luckily, Titi took the pressure off. Realizing the concerns, she was not confident about what the partnership offered. Although we remained on good terms with our new friends and we greatly respect them, we turned down the offer.
MISSING A MENTOR
The more recognized we became in the industry, the more people wanted something from us, and those relationships weren’t always in our best interests. One gentleman in particular, who was known to us as someone in the urban community with tremendous brand expertise and a track record of success, approached us and offered to take us under his wing. We were thrilled to meet with this man in his office and spend time with him. He told us he would protect us and never let anyone take advantage of us—not our competitors, not our mass retailers, not even our men. Titi and I had long been hoping to meet a mentor, and we were dazzled by his ideas and insights. But I was having a hard time understanding the value of his proposition. “What do you want in exchange?” I asked.
Know who you are dealing with, and what they may want from you. The higher you go and the more money you make, the more you may encounter shark-infested waters.
It quickly became clear that he wanted ownership in Miss Jessie’s. After one more meeting, we were sure we were not interested in having a partner. Many more investors started approaching us, but we could see through their pitches, which were misleading at best. We began to wonder if there was anyone out there we could trust.
We wanted guidance as we navigated the foreign waters of big business. We really needed someone to sit down, talk with us, and school us. We wanted a well-known person in the community to coach us. True mentors were missing. Those first two years of our relationship with mass retailers, our lean team of fewer than ten employees, including Titi and me, ended up having to do it all. The outside people who were supposed to help us were a consistent disappointment, from the liaison company we asked to track inventory and sales to those competitors posing as allies. By doing it all ourselves, we could learn the industry, figure out what worked for us, and discard the approaches that did not fit with our core values as a business.
You know your own business better than most experts do.
I wasn’t afraid to stand up for myself. Collectively, our recent experiences had made us stronger and more seasoned as businesswomen. As my beloved uncle Irvin told me, “You were dragged through the mud with your white suit on, and you still didn’t get dirty!” When the so-called experts advised us to acquiesce to the big-box retailers’ demands, we decided to challenge the standard way of doing business by cutting out the middlemen, handling our own mass retail distribution, and dealing with our mass retail partner directly.
ATTENTION TO DETAIL
Our current relationship with these retailers is unique, with a more open line of communication, which enhances our efficiency. We’ve been instrumental in advising them and helping them create a whole new market, lending them authenticity and credibility with our grassroots Brooklyn story and background.
One thing that distinguishes our relationships with these partners is the level of control we are given. We are just as selective when choosing locations to present our products in larger retail stores as we were when considering which smaller retail and beauty supply stores to go with. What we have learned over the years is that not all stores are created equal in terms of where we can get the best sales volume and traffic. At first we thought we needed to be in as many stores as possible. But in mass retail, there is something called the 80/20 rule, meaning
about 20 percent of stores do about 80 percent of the business. This is particularly true for some of our products that cater to more coily/kinky hair types. It makes sense, for example, to carry a more diverse range in Washington, D.C., than, say, Madison, Wisconsin.
As we have taken our time to drill down and learn this business, we’ve adjusted our strategy accordingly. Now we select which products go where, according to the demographic of the store location. Most of the stores carry our current top sellers—Pillow Soft, Leave In Condish, Jelly Soft Curls, Multicultural Curls, and Quick Curls—because these products can be used on any curl type, regardless of ethnicity. Product development is a constant at Miss Jessie’s. We never stand still.
Thirteen
BIG ROLLERS