QB House: “Back-to-Basics” Business Model Innovation in the Men’s Haircutting Industry
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The custom-developed haircutting booths employed by QB House, K-Cuts and other “no-frills” barber shop chains in Asia, are an example of “back-to-basics” business model innovation focused on process efficiency.
Business model innovation does not need to be fancy, or to be based on cutting edge technology and sophisticated data analytics. In fact, innovation can come in the simplest of forms and arise by going back to the basics, for example, by reinventing existing processes, repositioning one’s brand, or taking a fresh look at market segmentation.
Earlier this month, I had a haircut at a branch of K-Cuts in Singapore. K-Cuts is one of several “no-frills” barber shops that have sprung up in Asia over the last decade and a half, following in the footsteps of Japan’s QB House. Yet “no-frills” is very much an oversimplification of their business model, and belies the disruptive roles that QB House and K-Cuts have had on the men’s haircutting industry in a time when “disruption” had yet to become the buzzword it is today.
Pre-QB House
When I was growing up in Singapore, men typically got their haircuts in neighbourhood barber shops (which are cheap and friendly, but can be a hit and miss with the styling, and are not always the tidiest of environments) or salons (which are unisex, but are more expensive and frequently require long waits, especially without advance booking).
For a good number of years, the hair industry did not appear to effectively distinguish between the needs of male and female clients, for example that men tend to be less emotionally invested in their haircuts than women are, and prize convenience over ambience. Men are also much less likely than women to be interested in shampooing, hair treatments, and head massages. Nonetheless, men do still value a clean and tidy environment, as well as consistency in the output (i.e., their haircuts).
When I told my partner about my K-Cuts experience, she ruled it out as an option for her, saying that “This takes away at least half the purpose of having my hair done. What I love about going to my hair salon is that it’s like having a spa treatment that makes me forget about my worries while I’m there.” And this is basically the point. Men and women tend to look for very different things from their haircutting experience.
Enter QB House
When one steps into a QB House, there is no one to greet you, save for a vending machine which accepts only 10-dollar notes (you are welcome to try a 20-dollar note but be warned, as no change is provided!). You are issued a ticket and wait for your number to flash up on screen — with the wait usually taking no more than 5–10 minutes — before proceeding to one of the booths in the shop. Each booth is staffed by a uniformed QB House barber, and is identically kitted out with a storage unit for the customer’s possessions, the barber’s tools of trade, a floor vacuum and an overhead vacuum tube (called the “Air Wash” system). The former facilitates cleaning of the floor, while the latter enables the barber to niftily hoover-up loose strands of hair after each session. Every QB House stylist goes through the same rigorous training regimen, but one that is strictly focused on delivering a consistent barber shop, haircutting-only experience.
Indeed, QB House eloquently states on their website that they “do not provide services such as shampooing, blowing, shaving and so on”, and go on to explain that “we believe our customers can manage all these by themselves. We aim to provide our specialised service: haircutting.”
At K-Cuts, I was greeted by a ticket vending machine. It may have lacked the warmth of a human greeting, but for those of us for whom a haircut is a functional affair, it was efficient and got the job done.
QB House’s Business Model Innovation
In recognising that there was a gap in the market, they toggled several important levers of the traditional haircutting value proposition:
Product Range: Rather than going broad, QB House specialises solely in men’s haircuts, and more specifically only on haircutting. In this regard, their product range is the narrowest in the market. Even the smallest of Singapore’s neighbourhood barber shops usually offer shaving and shampooing.
Product Proposition: In contrast to salons which strive to offer a luxurious service with a strong emotional component, and neighbourhood barber shops which pride themselves on their friendly and personal service, QB House focuses primarily on delivering a functional outcome. The aesthetics and layout of the shop are highly utilitarian, from the spartan look and feel, all the way to the ticket vending machine. A QB House haircut may not be the most en vogue, but they are of a consistently good standard, and are guaranteed to be the speediest. My haircut took only 7 minutes, after a 6-minute wait!
Product Innovation: Whereas most salons compete to have the most popular hair stylists or to stock the best hair products, QB House focuses their innovation in a completely different direction, on process efficiency. In a normal salon, after each haircut, stylists or barbers often take a few minutes to brush customers’ hair, after which they take another minute or two to sweep the floor. QB House’s “Air Wash” system shortens the brushing-up time to less than 30 seconds and picks up close to 100% of loose strands, while the floor vacuum installed at the bottom of each booth reduces the final tidying-up time to less than 20 seconds.
Product Pricing: QB House’s hair cuts are priced amazingly low at S$10 (US$7.50) and is the lowest price point in the markets they operate in (a blessing in these inflationary times!). However they remain highly profitable (~50% higher revenue per barber than the average) because of their specialisation, functionally-focused product proposition, and process- and efficiency-based innovations, which collectively cater to a previously-unserved gap in the market.
The K-Cuts shopfront is simple yet effectively emphasises key aspects of the value proposition: the lowest price on the market, speedy turnaround, a clean and tidy environment, and Korean styling.
My partner likens the QB House approach to the “McDonalds-isation” of men’s haircutting services, which is a very apt analogy. While McDonald’s often has connotations of a “down-market” proposition, there is little doubt that the company has always been a business model innovator, providing access to meals of a consistent quality and price point regardless of where they are made and served, transforming food preparation, assembly and supply chains, and building a customer awareness that is second-to-none through culturally-relevant and emotive marketing campaigns.
QB House has now become hugely successful with over 700 stores across Japan, Singapore, Hong Kong, and Taiwan. Meanwhile, Singapore’s very own K-Cuts, still focused on rapid and effective haircuts, but with a Korean-style twist (in a nod to the en vogue Korean pop culture aesthetic that has swept across Asia), has expanded to overtake QB House as the market leader on the island with nearly 70 stores and plans to franchise overseas. From the perspective of QB House, even the disruptors can eventually be disrupted, if they do not remain on their toes!
Business Model Innovation in Practice
Business model innovation is hugely powerful and can have the power to upend markets. It does not rely (solely) on technology and platforms, but instead requires one to have a crystal clear understanding of customer needs, gaps in the market, and a willingness to try something out-of-the ordinary and sometimes, seemingly counterintuitive, as QB House did.
What other “back-to-basics” business model innovations have you come across?
