Fellow Barber in Brooklyn has expanded its experiment in affordable haircuts provided by junior barbers.
March 14, 2022
By: James Baron
Good morning. It’s Monday. You did remember to set your clock ahead, didn’t you? Today we’ll look at what happens when customers can pay what they can. We’ll also look at how New York’s State Capitol, dormant during the pandemic, is coming back to life.
It’s a counterintuitive strategy at a time when prices are rising: Let customers pay what they want. Even nothing. But a chain of barbershops in Brooklyn and Manhattan is pleased with the results.
The chain, Fellow Barber, began offering pay-what-you-can haircuts as the city emerged from the pandemic. It’s a variation on a model called P.W.Y.W., for pay what you want. One of Fellow Barber’s employees had tried it in California, where the chain also has shops, as a way to reach different subsets of the population, including homeless people.
When pandemic shutdowns ended and barbershops reopened last year, Sam Buffa, the company’s founder, decided to take pay-what-you-want indoors and make it a part of the company’s business plan. “Part of this idea is what’s overlooked, especially in men’s culture — how transformative a haircut can be,” Buffa said.
It’s an approach that a handful of retail operations have tried, with mixed results. The travel booking site Priceline became famous with the slogan “Name your own price” but has dropped that feature for flights, hotels and rental cars. Radiohead released a P.W.Y.W. album online in 2007 that was downloaded 1.2 million times in the first two days. Panera Bread, promising a better experience for people who were struggling with food insecurity, tried P.W.Y.W. with several nonprofit cafes. It closed them after a management shake-up.
The online retailer Headsets.com offers P.W.Y.W. once a year. “A few people rip us off and pay a dollar” for a purchase, said Mike Faith, the chief executive, “but most people pay the full price.”
Iris Mohr, the chair of marketing at the Peter J. Tobin College of Business at St. John’s University in Queens, said there were advantages for retailers. “You have the opportunity to cross-sell,” she said. “You have the opportunity to sell products in the store” not covered by P.W.Y.W.
Buffa, of Fellow Barber, saw P.W.Y.W. as an opportunity to appeal to people whose jobs had disappeared while they were holed up in their apartments during the pandemic.
“We felt there were a lot of people who were going to be looking for jobs, had lost their way of making income and were starting to re-enter the world,” he said, “and probably didn’t feel like they could go get the haircut they wanted or needed in a time when they needed it more than ever.” Or could afford a haircut in a shop where the price list tops out at $75.
He started “pay what you can Mondays” as a once-a-week experiment. “It filled those gaps when we were slower, and it was nice to have energy in the shops and people cutting hair,” he said.
Business on Mondays was better than he expected. He said most customers paid about $25, about half the average price at Fellow Barber. The chain benefited because it was paying the barbers hourly wages, in contrast to shops where barbers are paid only by the haircut.
Now paying what you want gets a haircut any day of the week — from a “junior barber.”
Fellow Barber has a three-tiered system, with master barbers; experienced barbers who make up most of the work force; and junior barbers, who are mostly recent graduates of a barbering school. Buffa decided to aim P.W.Y.W. at junior barbers, whose work is supervised by a more experienced barber. Junior barbers are paid about $18 an hour, whether they are cutting hair or not.
“Pay what you can gives them an opportunity to get more hair and get more repeats” he said — customers who come back if they like the results.
The results for the chain? “We assumed we would lose money,” Buffa said. “We were pleasantly surprised we are breaking even.”