For years, women wanting to change the color of their hair faced a dilemma: they could either spend hundreds of dollars to get their hair colored at a salon or take matters into their own hands and color their hair at home. Both options lacked the ingredient transparency that beauty consumers expected from brands in recent times.
Founded by Amy Errett in 2013, Madison Reed initially brought salon-quality hair color, made without harsh ingredients like ammonia, resorcinol, and paraphenylenediamine (PPD) to consumers at home as a direct-to-consumer (DTC) brand, revolutionizing the at-home hair color market in the process. It wasn’t long before Madison Reed evolved to become a true omnichannel brand with a thriving DTC business, 87 physical hair color bar (salon) locations, and wholesale partnerships with retailers like Ulta Beauty, Target, Amazon, and most recently, Walmart.
"With Madison Reed, our guests are empowered to color their hair on their own terms without making sacrifices,” Errett tells BeautyMatter. “As a true omnichannel brand, we are dedicated to meeting our guests where they are, and the beauty in this model is we are everywhere they need us.”
After a decade in business (and $250 million in total funding to date), Madison Reed has taken the global hair color industry by storm, first dominating the at-home hair color market and then in the salon market. Now, it has its sights set on continued growth across all distribution channels. BeautyMatter spoke with Errett to find out more about the brand’s unique business model and mixed retail strategy, as well as what it takes to have a successful professional services business in 2023.
Modernizing At-Home Hair Color
Before founding Madison Reed, Errett was a general partner at Maveron, a venture capital (VC) firm co-founded by former Starbucks Chief Executive Officer Howard Schultz, where she focused on making investments in consumer-facing companies. Her background in finance and VC helped her spot a significant gap in the hair color market for a salon-quality, at-home hair color that women can get delivered to their doorstep, made from clean ingredients.
“I believe that women deserve to demand more in their hair color and their lives and introduced an empowering new option that would truly change the industry forever: salon-quality, Smart 8-Free, Leaping Bunny Certified hair color delivered to a woman’s door so she could do it herself or by a licensed professional in one of our 87+ Madison Reed Hair Color Bars nationwide,” Errett told BeautyMatter.
The average woman who regularly colors her hair does so every six weeks, which was a sign to Errett that the consumer demand is strong and steady. Initially, potential investors didn’t seem to understand the opportunity that existed in this space. Errett faced criticism from some investors who said the total addressable market wasn’t big enough.
“I knew the size of the hair color prize, and I really was not shaken by the responses, because many times investors are more familiar with products that speak to them personally, and obviously this was not one of them,” says Errett. “However, founders need to do a great job at showing the statistics and data that support their business thesis. If the numbers are true and your product has a defensible strategy, most investors will see that over time.”
The numbers don’t lie: the global hair color industry is expected to be valued at over $40 billion in 2023. According to Errett, the split between women who visit a salon to color their hair and those who use an at-home treatment is nearly 50-50—48% of women go to a salon, while 52% do it themselves at home. Additionally, 15% of women have an allergy of some kind to traditional hair color. These stats support Madison Reed’s value proposition of providing a higher quality hair color product that allows women the freedom and choice to decide how they want to use it.
“We know our customers care about ingredients, and they can feel good knowing our formulas never use harsh ingredients like ammonia, resorcinol, and PPD, and are enriched with conditioning and strengthening ingredients like argan oil and ginseng root extract,” says Errett. “Core to our mission is empowering our guests to achieve beautiful results on their own terms.”
At $30, Madison Reed’s Hair Color Kits are more expensive than legacy drugstore brands but still significantly less than they would spend for a professional treatment at a salon. Appointments at Madison Reed’s Hair Color Bars cost $55 to60 for a root touch-up and up to $90 for a permanent allover color. The salon treatment takes less time than a traditional hair color appointment, which often takes two to three hours. Customers wanting to stretch their dollar can use a combination of at-home and professional services. Regardless of which option they choose, the formula is the same.
“For those who want to have their color applied by a licensed professional—come visit one of our 87+ Hair Color Bars nationwide,” says Errett. “If you prefer to color on your own schedule, use that same salon-quality color from the comfort of your own home.”
Madison Reed’s Hair Color Bar Concept
Errett says that the business was always grounded in the idea that at-home hair color should perform like a salon product. Before Madison Reed, the hair color you received in the salon and the hair color you picked up at the drugstore were not equal. Salon-quality hair color was always better quality, but required expert-level knowledge to know how to use it. At Madison Reed, the formula is the same, whether you’re picking it up off the shelf or visiting a color bar.
“Our business model is truly unique, and our products speak for themselves with gorgeous, efficacious results,” says Errett.
The brand has prioritized brick-and-mortar stores from the very beginning, launching its first pop-up color bar in Manhattan in 2016. Madison’s Reed’s Hair Color Bars operate similarly to Drybar, the salon chain that specializes in blowouts. The brand’s hair color bars are not a full-service salon; rather, they offer express hair color treatments, from gray root coverage and highlights to allover color. With Madison Reed’s Hair Color Bars, Errett saw the potential to make the hair coloring process at salons more efficient, affordable, and accessible.
“The Madison Reed Hair Color Bar concept was established with the belief that high-quality hair color should be convenient, affordable, and made with ingredients you can feel good about,” says Errett. “Our guests are modern women who prioritize convenience, flexibility, and results—and our Hair Color Bars deliver. We know that our guests want to achieve consistent and excellent results regardless of where they are—in their hometown, traveling for work, or on vacation.”
Madison Reed’s ability to serve consumers in this dual approach ensured the brand’s success during the pandemic. As the color bars were forced to close, online sales exploded. No stranger to the pivot, Errett retrained her salon employees overnight to meet the unprecedented customer service demand, driven by the hordes of women who were new to coloring their hair at home. The brand hosted “Hair Color House Parties” on Zoom, tapping their trained hairstylists to help guide these customers through the at-home hair coloring process. Each event often had more than 175 women in attendance.
Despite the brick-and-mortar closures, Madison Reed saw unprecedented growth during the pandemic. The brand’s total revenue exceeded $100 million in 2021; more than double 2019. The pandemic also proved what Errett had known all along about the hair color market: for many consumers, hair color is not a want, but a need. The hair color business is recession-proof, and consumers will not go without coloring their hair, even in turbulent times.
Madison Reed’s hair color bar presence has grown 7x since 2020, with 87 hair color bars in the US and over 250K appointments in H1 2023 alone. In April, Madison Reed launched its own loyalty program to reward consumer spending—both online and in hair color bars. Those who color their hair at home can join Madison Reed’s Limitless Premier membership for free, which includes 15% off every color kit on auto-delivery and $5 in rewards for every $200 spent, as well as welcome and birthday gifts. A paid membership ($42 annually) offers even more perks, including free shipping. Customers who visit Madison Reed’s Hair Bar regularly can join Limitless Pro+, which is a monthly membership program that allows customers to get their roots done as often as they need. The cost varies based on location, but hovers around $70 to $75 per month around New York City. In addition to hair color services, customers can buy their hair color online and pick it up at any color bar location.
“Our customers have always been loyal to us and have shown us that no matter where they are in their life, they are always going to color their hair and prioritize taking care of themselves,” says Errett. “To show our appreciation, we recently expanded our series of membership and rewards programs, making it more convenient and affordable for customers to get gorgeous hair color, at home or at one of our Hair Color Bars nationwide.”
As a leader, Errett knows that the hair color bars would be nothing without the seasoned stylists who perform Madison Reed’s hair color services. She describes her leadership style as “leading with love,” which is why Madison Reed’s Hair Color Bars operate differently from traditional salons.
“Historically, stylists have not been set up for financial success,” says Errett. “To change this trajectory and uplift the industry, I pay my colorists up to 3x more than the industry average, plus 100% of healthcare benefits and opportunities for career growth within the company.”
Salons are a customer service business, and in Errett’s opinion, your team member experience mirrors your customer experience. As a CEO, she’s highly engaged and accessible to both her team and customers: her email is listed on the brand’s website for anyone to get in touch. She promotes a culture of respect and care for everyone, which trickles down to the customer.
“If love is a value in your company, your guests will feel it,” says Errett. “Think about the last time you had a bad experience on a customer service line … did you feel like that person feels valued by their company? Probably not.”
Omnichannel Expansion
Since launching in 2013, Madison Reed has been steadily growing its retail footprint. The hair color brand is already at Target, Ulta Beauty, Ulta Beauty at Target, and Amazon, but in August it announced its biggest retail partnership to date with Walmart. Madison Reed is increasing their presence in physical retail doors by 70% through its launch at Walmart, with nearly 4,000 physical retail doors in total. Madison Reed products will be available in more than 1,500 Walmart stores. In recent years, Walmart has been fervently adding beauty brands to its growing roster to compete with Target, with Madison Reed being its latest hair color addition.
“As a true omnichannel brand, we are dedicated to meeting our guests where they are,” says Errett. “The beauty in this model is we are everywhere they need us. Walmart is a key partner in accomplishing this goal.”
Madison Reed’s customers shop the brand through multiple channels. They might have an initial appointment at a hair color bar and take products home, only to re-up their supply the next time they place an order at Amazon or pop into a Target or Walmart. Providing these many options and reaching customers where they are has always been part of Madison’s Reed’s mixed retail strategy.
This approach aligns with research that looks at how consumers actually shop. One BHDP study found that 68% of consumers will shop online after making an in-person purchase from a retailer’s store.
“Madison Reed is deeply rooted in the belief that prestige, salon-quality hair color made without harsh ingredients should be accessible,” says Errett. “To us this means empowering our guests to choose where and when they purchase our products and color their hair, so they have the freedom to enjoy gorgeous results on their own terms.”
Madison Reed’s Color Bars also create a halo effect for the brand’s other channels. With each new color bar location, the brand sees an increase in sales at nearby Ulta Beauty stores.
The expansion into Walmart comes on the heels of recent executive hires for the brand. Angela Jaskolski, who previously held executive positions at haircare brands Aveda and Regis Corporation, joined the Madison Reed team in July as Chief Revenue Officer to help the brand scale. Madison Reed welcomed Jose Zuniga as its Chief Financial Officer the year prior. Zuniga came from Dollar Shave Club, and was hired to help drive Madison Reed's omnichannel growth. The hair color brand continues to show rapid expansion with +25% growth year over year in Q1 2023.
For Madison Reed, it’s not enough to disrupt the at-home hair color market. The brand has big plans to dominate the entire hair color industry, starting with salons. Errett predicts that Madison Reed will have 100 hair color bars by 2024 across the country, with a focus on 17 geographic hubs, as determined by consumer research data.
“We will continue to grow and innovate,’ says Errett. “There is a lot of opportunity in the market for continued disruption and the future is bright for Madison Reed."
