Navigating the Wide Spectrum of Beauty Services
The beauty industry, particularly beauty services, has seen significant changes in recent years. This sector was heavily impacted by the COVID-19 pandemic, but it is now bouncing back. The post-pandemic industry is characterized by five important trends: growth in beauty players offering both products and services, a shift in customer preferences to specialized over generic, growth in advanced procedures, the increased centrality of customer experiences, and shifts in the labor market for beauty service professionals.To get more news about
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The beauty services market encompasses three key service segments—hair, skin (including injectables, makeup, tanning, and waxing), and nails—as well as beauty merchandise sold in salons. Market growth was strong in the years immediately before the global pandemic, with a CAGR of percent between 2017 and 2019. However, the COVID-19 pandemic forced temporary closures and caused an estimated 20 percent of salons to shut down permanently. In 2021, sales bounced back to about 70 percent of pre-pandemic levels, corresponding to an estimated market value of $57 billion.
Companies looking to consolidate or expand their positions in this highly dynamic and innovative industry will need to understand these trends and respond to them1. Beauty service providers such as salon owners have the opportunity to diversify their revenue streams but will need to expand product sales, develop partnerships with brands and retailers to help expand their footprints, and upskill their employees. Retailers, on the other hand, have the opportunity to deepen relationships with customers and drive foot traffic to stores, but they will need to develop a clear strategic objective, build a unique customer experience, and carefully consider their capital expenditure requirements.
Shifting market dynamics will cause growth rates to vary substantially by segment1. We expect strong growth in more specialized offerings, such as luxury spas and salons, nonsurgical skin services, and specialized hair services. Salon chains and traditional nail care experiences will likely recover more slowly due to an increase in both labor costs and the availability of at-home substitutes with near-professional results.
In conclusion, the beauty services industry is navigating a wide spectrum of changes and challenges. Companies that are slow to develop a robust services strategy that adapts to and capitalizes on this new battleground are at risk of falling behind1. As we move forward, it will be interesting to see how the industry continues to evolve and adapt to these changes.
