What started as a simple marital conversation has evolved into a $40 million e-com business that goes above and beyond to answer its customers’ hair care questions. It all started as a hobby. Dennis Huang was experimenting with the Internet back in 1995 when he was still in college pursuing his PhD. He first put up a web page on AOL, selling organic green tea. Business was disappointing, so he shut down the business twice.
“Every startup has its magic moments, for me it was a conversation with my wife,” said Huang, founder and chairman of the board. When his wife complained about her unruly, curly hair, because of his history as a chemist, Huang would do research on hair products and made recommendations to her.
“My wife said, ‘Since you’re a chemist and you seem to know hair stuff, why don’t you focus on hair products. I am sure there are other people like me out there that can benefit from your knowledge,’” Huang said.
Huang took her advice, and business took off. In late 1997, Huang resigned from his full time job and launched Folica.com.
Today, Folica is a $40 million business that Huang describes as the best place to shop for hair products, particularly because of the site’s central focus on helping customers get the right products for their specific hair type. But it’s not the experts at Folica who help direct most of the customers; it’s often other consumers.
According to Huang, Folica’s greatest competitive advantage is the way the site connects and encourages peer-to-peer reviews of products, from shampoos and hair dyes to tweezers and hair dryers. “Early on, we noticed that customers asked the same questions again and again,” he said. “We realized to make our site essential to the hair-focused consumer, we needed to create a way to share the answers.”
Now, customers can shop by hair type and hair care product to narrow down which products would work best for them. All reviews are posted for the product, and each product is rated with a one- to five-star rating, depending on customer response.
“Some products will work in New York, but they might not work in Florida,” said Huang. “We can’t answer all of those questions, so connecting our customers is an important key in making our website relevant.”
In this way, Folica asserts itself as an important player in its customers’ lives, unlike most hair care brick-and-mortar locations that don’t offer peer reviews or content streamlined for a shopper’s hair style and geographic location. “This is one of the advantages of selling online,” Huang said. “You can enlist the help of customers to help you sell your product.”
In the past year, Folica launched a new front end to its website and a new infrastructure that integrates the products, website orders, and warehouse. The platform makes it easier for customers to submit their feedback and review advice from other consumers.
Before the upgrade, Folica employees had to jump through a number of hoops to process a customer order. A data file from the website would be printed out, typed into another system for credit card processing, and then typed into another system for completion.
“It was a lot of human interaction,” said Huang. “Now it’s a seamless transition from the credit card to the website to the ERP warehouse system, and it significantly reduced the number of mistakes made while processing.”
The website upgrade was also a chance for Folica to re-launch its brand. In the past, the company focused on beauty products in general. Now, the focus is all about hair.
The company also hired a firm to design the look and feel of its website, got rid of non-essential products, and streamlined its product assortment. “We’re now focused on building our brand to be the go-to site for hair-care needs,” said Huang.
Huang makes sure his team of employees is as up to date on products as possible. When new products are launched, he brings in its manufacturers to train employees on the products to ensure they can offer the best possible support to customers. His approach to making sure he’s hired the right employees for the job is fairly simple.
“The best person to look for in customer service is someone who to loves their hair,” he said. “If they love it, they can learn it quickly.”
Key to making Folica work is its approach to customer service. Huang and his team built their model using their website as a base. They gathered several focus groups to test potential platforms, adding needed functions and removing elements that didn’t work. Then they moved on to direct customer interaction.
Whereas other retailers simply add a product to sell on their site, Folica pays attention to which products consumers favor and which they do not, even going so far as to suggest improvements to manufacturers. Folica employs an engineer who reviews the appliances’ safety features and certifications and makes recommendations to merchandisers.
“We convey customer comments to the manufacturer and explain what features the customers don’t like,” said Huang. “The merchandiser’s response dictates whether or now we will continue to carry the product.”
This kind of feedback is helpful for manufacturers, who often don’t get any feedback from retailers, especially not customer-derived comments. Huang said when manufacturers don’t respond, Folica takes advantage of the situation and finds another manufacturer who could help the company develop its own line of product based on customer feedback.
These steps go a long way to support Huang’s goal of Folica being the place people go when they need something for their hair. “We want to be the brand that comes up in a conversation between two friends talking about a hair style or hair problem,” he said. “I would love the first thing to top their minds to be Folica.com.”
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