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Summary of our market study
The global beauty salon market experienced a decline of 4% in revenue in 2020 due to the Covid-19 pandemic, with estimations placing its value at $144.48 billion. However, recovery was anticipated to begin in 2021, albeit at a slower rate than initially forecasted pre-pandemic. The market is expected to grow at a compound annual growth rate (CAGR) of 4.7% from 2020 to 2027, ultimately reaching a value of $191.6 billion by 2027. This growth trajectory is predominantly driven by the rising living standards and urbanization in emerging countries, as well as increases in disposable income and the stress associated with modern life. Despite the setbacks of the pandemic, which resulted in significant operating losses and reduced full-time employment within the sector, there was a resurgence in consumer demand post-lockdown. For instance, the booking platform Treatwell reported a 432% surge in appointments, suggesting a strong rebound in demand for beauty salon services.
British Beauty Salon Market Trends and Consumer Behavior Analysis
In the beauty salon market within the United Kingdom, there have been several notable trends that reflect consumer demand. These trends are shaped by the intersection of economic health, lifestyle changes, and the global health crisis that has dictated much of the business landscape in recent times. The beauty salon industry, which encompasses a range of aesthetic services from facials and body care to specialized treatments such as UV tanning and pulsed light, has been particularly sensitive to the fluctuating economic climate. With the beauty sector highly responsive to consumer spending power, it has become clear that savings and value for money are top priorities for customers within this market. Reports indicate that a vast majority of operators, approximately 78%, believe that financial savings are the most significant factor when it comes to customer loyalty. Despite the economic challenges, the beauty salon sector in the UK has demonstrated a growth trajectory, with an anticipated compound annual growth rate (CAGR) of about 1.5%.
However, the advent of COVID-19 led to a sharp industry decline, with a 4% drop in revenue in 2020. The recovery is anticipated to be underway starting from 2021, albeit at a pace that falls short of pre-pandemic projections. One of the key driving factors behind this growth on a global scale is the rising disposable household income in emerging economies, along with the stresses associated with modern life that have increased the demand for relaxation and rejuvenation services offered by beauty salons. Within the UK market, beauty salons represent a significant portion of the hairdressing and beauty salons sector. Turnover levels took a hit in 2020, with substantial losses resulting from the pandemic. Yet, beauty salons still constituted a sizable presence in the market, accounting for about one-third of the sector's total number of establishments. The number of beauty salons in the UK has been on an upward tilt, with an increase of nearly 25%. It is also essential to note that the sector is characterized by a predominantly female workforce, with the majority of them owning their businesses.
Key Players in the Beauty and Cosmetic Market Landscape
The beauty salon market is a sprawling industry with multiple facets involving direct services, product sales, and digital engagement platforms. It's a space where established conglomerates, niche service providers, and tech-savvy startups coalesce to serve the diverse needs of beauty-conscious consumers.
- Procter & Gamble, known widely as P&G, stands as an industry titan with its expansive portfolio of beauty, personal care, and household products. This multinational powerhouse has a long-standing reputation for developing and selling products that resonate with consumers across the globe. Although primarily known for their consumer goods, their influence over beauty and cosmetics indirectly affects beauty salon trends and demands.
- L'Oréal, another global leader in the beauty sector, has a direct impact on the beauty salon market. As the world’s largest cosmetics company, L'Oréal's extensive range of products, including skincare, hair care, makeup, and fragrances, often sets the pace for beauty treatments and services on offer within salons. Their commitment to innovation and quality positions them as a benchmark for beauty professionals.
- Boots is a well-known presence in the UK, both as a health and beauty retailer and pharmacy chain. It’s a brand that has become synonymous with personal care and beauty products. Despite being primarily retail-focused, Boots influences the beauty salon market through its selection of beauty tools and products which are utilized by salons and their clientele. Moving away from product-centric giants, the beauty salon industry has been significantly impacted by digital transformation, with platforms like Treatwell revolutionizing how customers interact with beauty services.
- As an online appointment scheduling platform, Treatwell simplifies the booking process for treatments, making it a critical player in driving traffic and business for salons.
- Additionally, exclusive Salons owned by beauty brands, such as the Clarins Skin Spa, exemplify a more integrated approach by offering bespoke treatments using their own line of high-end beauty products. These salons are not just service providers; they are brand ambassadors creating immersive experiences, directly showcasing the efficacy of their products in a professional setting.
Collectively, these main players, from multinational product suppliers to innovative scheduling services, contribute to the dynamism of the beauty salon market. They influence consumer expectations, salon service offerings, and overall industry trends, making them indispensable actors in a continuously evolving landscape.
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Summary and extracts
1 Market overview
1.1 Definition and presentation
A beauty salon is legally defined as a business offering to its customers aesthetic treatments other than medical and paramedical as well as aesthetic massages without medical purpose. [Article 16-1 of the law of July 5, 1996]
Beauty salons are operators who provide aesthetic treatments including body care, facials, beauty treatments, hair removal and other more specific treatments (UV tanning, pulsed light). They can be generalists or specialized in one treatment.
Salons compete with perfumeries, fitness and thalassotherapy institutes, SPAs and massage salons.
The UK beauty salon market is expected to grow at a CAGR of 1.6% between 2014 and 2019. The success of beauty salons relies on the health of the economy; more favorable economic conditions increase consumer spending. Indeed, they are price sensitive; Ibisworld reports that 78% of UK operators believe savings are the most important loyalty factor
As of 2017, there were more than 40,000 registered businesses, making this a highly fragmented market.[Beautiful Britain Report]
1.2 The global market
The global beauty salons and spas market was estimated at $***.** billion in ****. Due to the Covid-** outbreak and restrictive travel measures, industry revenue declined by *% in ****.
However, recovery is expected to take place as early as **** at a slower pace than forecasted prior to the Covid-** crisis. Indeed, on a global scale, the beauty salon market is expected to grow at a CAGR (***) of *.*% between **** and **** to reach $***.* billion by ****.
Global Beauty Salon and Spa Market World, ****-*****, US$ billion Source: ****
The market growth is mainly driven by the development of emerging countries, which includes urbanization of lifestyles and rising living standards. Indeed, the increase in disposable household income and the stress resulting from modern lifestyles are significant growth drivers for the sector.
1.3 The UK market
Beauty salon business in United Kingdom belong to the Hairdressing and beauty salons sector. If we look at the total turnover since ****, we observe that the sector is growing. However, in the beauty salon segment, a UK parliamentary report states that turnover levels were significantly lower in **** than in **** with two-thirds of establishments without cash reserves or business savings.
UK hair and beauty care market United Kingdom, ****-****, £ billion Source: ****
It is also possible to observe the share of beauty salons in the broader hair and beauty establishment sector. Indeed, according to the following chart, **% of establishments in this sector were beauty salons in ****.
Distribution of UK beauty establishment activity United Kingdom, ****, in establishments Source: ****
According to the Office for National Statistics, the turnover of the hair and other beauty treatment sector was £*.* million in ****. IF the share of number of beauty salons in total hair and beauty establishments is considered representative of the share of turnover, and that share has remainede constant from **** to ****, it is possible to estimate the UK beauty salon market in **** at £*.* billion.
1.4 The impact of the health crisis
The beauty salon sector has been particularly affected by the health crisis, with more than *** days of closure in ****, resulting in an average loss of **% of turnover, up to -**% in some regions.
The end of lockdown has nevertheless limited the reopening activity of beauty salons by restricting occupancy to **%. This crisis also resulted in a **% drop in full-time employment figures compared to ****.
From a financial perspective, UK beauty salons suffered an average loss of £**,*** in **** and one in ten businesses will not have been able to provide income or dividends to their owners.[***]
The following graph shows that the situation still improved slightly between August and September **** from a patronage perspective, with a smaller proportion of salons reporting lower occupancy than before the pandemic began.
Appointment scheduling in hair and beauty salons United Kingdom, ****, percentage Source: ****
2 Analysis of the demand
2.1 British spending on beauty
The Office for National Statistics allows us to observe the average weekly spending of British households on beauty. Thus, we note that hairdressing and beauty care represented an expenditure roughly equivalent to that of hair and cosmetic products over the year ****-****, before the beginning of the health crisis. The hypothesis of a tipping of this balance of power in favor of products used at home with the successive confinements seems reasonable.
Average weekly expenditure on beauty by UK households United Kingdom, ****, in pounds sterling Source: ****
Looking at the relative changes in this spending from ****-** to ****-**, there has been greater progress in spending on cosmetics. Change in average weekly spending on beauty by UK households United Kingdom, ****-****, in percent Source: ****
2.2 A demand influenced by the health crisis
The British demand for beauty salons has been largely curbed by the health crisis. It is possible to observe the different reasons why clients have cancelled their appointments in their beauty salons. The most common reasons are the reduction of expenses, the absence of events offering opportunities to perform beauty treatments, health problems or contradictory messages from the government.
Reasons given to salons for cancelling appointments United Kingdom, Spring ****, percentage Source: ****
Among the treatments offered in beauty salons, facials have been very successful, especially because of the stress caused by the crisis or by wearing a mask. Microdermabrasion and acne treatments are also very popular. As for waxing, Hollywood waxing has been very popular.[***]
x
3 Market structure
3.1 Market structure
The number of beauty salons is steadily growing with an increase of **.*% since ****. Number of beauty salons in the United Kingdom United Kingdom, ****-****, in units Source: ****
The beauty sector employed ***,*** people from January to March ****, up from ***,*** the previous year. The sector is characterized by a strong female presence. In fact, **% of the total workforce in the sector in **** was made up of women, and **% of them owned their own business
The following graph shows the evolution of the vacancy rate of the different beauty segments. While a growth in this vacancy rate is observed for all segments, we note a faster growth for beauty salons with an increase of *.* points since ****.
Vacancy rates for segments of the beauty care sector United Kingdom, ****-****, in percent Source: ****
The sector is also characterized by a significant number of self-employed professionals. In fact, self-employed entrepreneurs alone accounted for half of all beauty treatment businesses in the UK in ****.
Beauty care organizations United Kingdom, ****, in percent Source: ****
3.2 Geographical distribution of the activity
The following map represents the number of beauty salons or hairdressers per thousand inhabitants. It can be seen that, with the exception of London, the South of the United Kingdom concentrates fewer establishments than the North of the country with a minimum of *.** salons per thousand people in the South West of England.
Number of beauty or hair salons per thousand people
United Kingdom, ****
Source: ****
Hair and beauty salons United Kingdom, ****, in percent Source: ****
4 Analysis of the offer
4.1 Services offered
In general, the services offered by beauty salons are distinguished between facials, body treatments, hair removal for women, hair removal for men and finally beauty. There are also institutes that specialize in hair removal or manicure.
Beauty salons offer several services in each category, including the following
Facial care The average duration is ** minutes. During this time, treatments including anti-wrinkle, anti-aging, purifying, etc. are performed Body care The body scrubbing and modeling service, the application of lotions, skin cream, skin oils, etc Waxing The process of waxing can occur anywhere on the body where there is hair. Common areas for women include eyebrows, legs, lips, etc. For men, the back, stomach, shoulders, etc. are common areas where waxing is desired Beauty preparation Preparation for events such as birthdays, weddings, parties, etc. where treatments such as eyebrow tinting, enhancement and restructuring are popular Hand and foot beauty Here the client often requests a manicure, polish application and other treatments such as exfoliation, sculpting, skin care application, etc Other Finally, this action point often includes electronic devices and performs services such as cellulite treatment, tanning, special waxing, etc
4.2 Price overview
The price offered for the same service by the institutes varies considerably depending on the duration of the treatment, but also between institutes.
In addition, the subscription system of the clients also makes the prices vary; the prices are higher (***) for non-subscribing clients. Below is an overview of beauty salon prices in the UK.
Source: ****
5 Regulation
5.1 UK legislation governing beauty salons and the guidelines to follow
The opening of a beauty salon in the UK is necessarily preceded by obtaining a license from the local authorities adapted to the services offered by the establishment. The British government has made available a tool to navigate these licenses.
Then, in addition to the need to ensure the establishment and set up an accounting system, the workers must have the certifications allowing them to carry out their treatments. There are a wide variety of certifications including the following:
Certifications City & Guilds SVQ (***) VTCT (***) certificates BTEC HNDs International Confederation of Beauty and Cosmetology (***) qualifications International Committee of Aesthetics and Cosmetology (***) qualifications ITEC and Edexcel qualifications
Health context
The UK government has published a list of guidelines for beauty salons in the current health context:
Conduct a health and safety risk assessment taking into account the risk from COVID-**. Ventilate the facility sufficiently Clean the establishment often enough Deny access to people with symptoms of VIC-** Allowing people to register in the facility Communicate about the measures taken and train staff
Use of harmful chemicals
It is also important to follow the following guidelines for the use of products with potentially harmful chemicals:
Provide adequate protection: powder-free, vinyl gloves that are at ...
6 Positioning of the actors
6.1 Segmentation
- Procter & Gamble
- L'Oréal Groupe
- Boots
- Treatwell
- Clarins Groupe
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