Hair Care Salons

1. Hair Care Salons The Image Makers

2. MEDIACENTER An Optimistic Style • Total revenues for the industry (hair, skin and nail salons) increased just 2.7% during 2013. The salon hair care portion of the industry (services and retail) increased 2.3%, to $64.8 billion. • The Salon/Spa Performance Index decreased 0.8 percent for Q1 2014, and another 0.2 percent for Q2 2014. It is a combination of the Current Situation Index, which increased during Q2 2014 to 100.7%, and the Expectations Index, which decreased just 0.7% to 103.8%. • Despite the declines for the first half of 2014, Indexes more than 100% indicate salon owners are optimistic about the industry and revenues for the next six months.

3. MEDIACENTER Salon Profile • According to the 2014 Green Book, the annual statistical report on hair salons and spas, 93.8% of them are single establishments, 4.7% are one salon location in an independent chain and 1.6% are one salon location in a franchised chain. • The 2014 Green Book also reported that women own 54% of beauty salons and spas; men, 24%; and co-ownership, 22%. For barber shops, men own 55%; women, 29%; and co-ownership, 16%. • The average number of full-time salon employees is 8.7, with the average number of chairs, 7.7; and 5.8 of these are staffed and 1.9 leased.

4. MEDIACENTER Bringing Style to the Masses • The 2013 survey of salon owners that is reported in the 2014 Green Book revealed that the average number of total unique client visits per year were 2,458, with a client retention rate of 78.9%. • Of all visits, 78.6% were scheduled appointments, and the average dollar amount per client visit was $67.17 for services and $20.55 for retail products. • Hair services generated 66.8% of all salon revenues; followed by retail sales, 10.5%; men’s services, 7.5%; and nail services, 5.9%.

5. MEDIACENTER Making the Most of Marketing Dollars • The salon owners participating in the 2014 Green Book survey said they allocated 8.9% of their total annual sales to marketing/ promotional events, with 66.1% utilized for client retention and 33.9% to attract new clients. • More than 70% of salon owners stated that social media has resulted in “some improvement” or a “major improvement” in their revenues and profits. • Salon owners said the primary events they host are charity events, at 49.7%; followed by styling classes, 39.4%; sales discount events, 36.9%; no events, 27.8%; and VIP events, 22.5%.

6. MEDIACENTER Future Facts • Approximately 50% of US salons will operate their businesses with a booth-rental model by 2015. This will result in a loss of market share among independent salons serving high-end clientele and an increase in market share among booth/chair rentals and chain salons. • A growing trend in the hair care services is blow-dry salons, also known as blowout bars, especially in US urban markets. Services are limited to washing, blow-drying and styling, with no cutting or dying services. • Americans’ spending at beauty salons and barber shops is estimated to increase at an annual compounded rate of 3% from 2014 to 2018.

7. MEDIACENTER Advertising Strategies • Chain and franchise salons are more likely to have the ad budgets for TV; however, multiple independents could pool their resources to advertise a charity event, such as a free styling day at a women’s shelter, which also could become a social media contest for the best look. • Suggest to salon owners that TV can be quite affordable if they advertise during late night programming to reach a young adult population and to attract new clients that they can retain for a longer term. • Salons may find it advantageous to try a concentrated flight of spots prior to New Year’s Eve and the prom season to attract clientele that want a special look at a higher price point.

8. MEDIACENTER Advertising Strategies • Recommend television advertising to local chains as the best medium to reach families with a message touting better service than national chains and having been long-term businesses in the community. • Show unisex salons how they can attract more male customers with the appropriate TV programming and in conjunction with social media to reach younger males. • Beauty salons should advertise on TV to generate awareness of their expertise (e.g., hair fashion trends), location, and pricing. Combining TV's elements of sight, sound, motion, and emotion also allow salons to convey their distinct atmospheres and personalities. Be sure to target the right demographic by airing your commercials during the most suitable timeslots.

9. MEDIACENTER Advertising Strategies • Many consumers are loyal to their hairdressers. Higher end salons should have email marketing campaigns to encourage loyalty including haircut and hair color reminders with promotions (e.g., 10% off). Lower end salons should have loyalty cards (buy 10 cuts, get one free). The email campaign can be reinforced in television commercials. • Word-of-mouth is also important. Salons should offer referral programs or buddy discounts to bring in new business. Keep in mind: As much as pre-existing customers appreciate discounts for referrals, high-quality services at competitive prices will encourage them to spread the word.

10. MEDIACENTER Social Media Strategies • Most hair care salons will find a Facebook business page to be an absolute necessity. It offers many opportunities to create a personalize dialogue with customers, posting staff photos, industry news, new style trends, etc. • Many hair care salons have used Instagram successfully, since the hair care is a very visual service. Again, photos can show the latest styles and hair care tips, provide appointment reminders and offer other content that will attract current and new customers. • Video can also be very effective on Facebook and salon owners should consider a YouTube channel. Stylists can appear in regular videos sharing their specialties, new techniques they’ve learned and interesting customer stories. Customer video testimonials will also create interest in a salon’s services.

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