Beauty Industry in 2013 at a Glance
Comprised of a diverse yet interrelated set of business lines, the beauty industry helps us look and smell our best. Before we leave the house each day, we have likely undergone our personalized beautification ritual. Included in this ritual is the daily shower and shave, the weekly nail trim, and the monthly haircut. And increasingly we are taking a more holistic view of our health, and our beautification ritual may now include a periodic massage and trip to the spa. But our concern with our appearance is hardly anything new; indeed the beauty industry has been expanding and growing for all of recorded history. For the interested entrepreneur this continuing growth and evolution offers a diverse menu of opportunity.
The beauty industry today encompasses far more than cosmetics and skin care products, though they are still a significant portion of the sector. A wide range of services and products are available to help us put our best face forward, and the beauty industry now also encompasses hair styling and hair removal, nail and tanning salons,massage parlors, shower and shaving products, perfumes, colognes and more. Many people now treat their beauty ritual as an escape from the hustle of the information age, whether its a few minutes spoiling oneself with a high-end product or a full day at a luxury spa.
Lotions, Treatments and Baths. Oh my!
Beauty industry opportunities can be broadly separated between products and services, though many providers offer both. Within both products and services, however, exist a wide range of business models based on target market, production processes and location.
From exfoliating soaps and volumizing shampoos to anti-wrinkle creams, the beauty industry provides us with choices galore to keep us looking younger and healthier. Cosmetics exist for every style and taste, as well as every skin tone, texture and even allergy. Rows of toothpaste stretch off into the distance at the local retail outlet, and it is no longer a choice only of brand, but between whitening, tartar protection, flavor, packaging styles and more! And a similar story is told in the aisles for perfume, deodorant and hair coloring. Certain businesses also distinguish themselves through manufacturing processes such as using all natural ingredients or a refusal to use animal testing on products.
While the diversity among service providers is not quite as extensive, there is considerable differentiation between offerings based on price, location and target markets. Some businesses target the inexpensive, fast hair cut market while others focus on providing a luxury spa experience. Franchise opportunities exist for hair salons, skin treatments, nail care, and tanning. Niche providers offer products and services focused on children, weddings, and fashion, among others.
Different Beauty Franchise Opportunities
||Stylists, salons, shampoos/conditioners, coloring product, styling product (gels, sprays, etc)
|Cosmetics & Skin care
||Make-up, moisturizing lotions, tanning salons, sun care products
||Perfumes, body sprays, cologne, deodorants
||Nail polish, shaving products, massage parlors, hair removal services
Beauty Industry Trends
Such diversity and innovation exists because we demand it. The beauty industry continues to expand globally, with some projections claiming 8.5% growth by 2014; revenue growth in 2010 is estimated at 3.3%. Several trends support this expansion and promise continued profitability into the future.
Globally, rising per capita incomes and greater access to international markets are increasing spending on discretionary items such as perfumes and cosmetics. Though the recent economic turmoil had decreased spending on some discretionary products in the United States, purchasing of beauty products has remained strong. Consumers did tend to be more price-conscious however, with over 70% of survey respondents claiming to give mass market products more consideration over high-end products during the downturn.
Perhaps not as surprising as it once was, one of the fastest growing segments of the beauty industry is products and services aimed at men. Traditionally focused on female consumers, men today are gaining increasing attention from the beauty industry. Of course most of us have been using deodorant and toothpaste for several months already, but increasingly men are being targeted for body sprays, specialty hair products, lotions and even nail care. Salons offer a menu of pampering services for men, including cuts and shaves, facials, massages and manicures.
Consumers of beauty industry products tend to be brand loyal, and share what works for them with their friends. 58% of those surveyed claimed that personal recommendations weigh more heavily than celebrity marketing, and only 44% bought a particular product for its claim of specific product attributes. Like many things, beauty products gain a level of familiarity and comfort for the consumer, and switching to a new product often takes some extra incentive. Popular and successful marketing campaigns in the beauty industry often include a free sample and discounts for referrals to lure new customers in, and loyalty programs to keep them.
Beauty Industry Franchise Opportunities
From product innovation, organic industry growth and continued growth into the male half of the population, the beauty industry continues to offer a diverse set of profitable franchising opportunities. Beauty franchises exist across the space with dozens of strategies reaching all types of consumer.
Retail opportunities include brick-and-mortar store locations as well as home-based businesses, and span across cosmetics, skin care, hair care, tanning and more. Frequently producers of beauty industry products will have a franchising distribution system, or even have training locations for service providers. Cosmetic and skin care entrepreneurs offer specialized services such as nail care and tanning, a complete menu designed for the full day experience and everything in between. Some salons offer an exclusive membership experience and others specialize on walk-in business.
Hair care opportunities exist for barbers and stylists alike, with a range of different franchises available based on cost, location, and gender. Many male-focused franchises offering everything from the basic barbershop have been springing up to complement the traditionally female-focused salon offerings. Franchise chains devoted to children offer a more entertaining environment for kids. There are also businesses focused on hair removal and coloring.
Eco-friendly salons such as the Splish franchise offer hair care in an environmentally conscious environment.
As we can see, the beauty industry encompasses a wide range of products and services, and franchising plays a major part in bringing them to the consumer. As the industry continues to grow and evolve, profitable opportunities will abound…the hard part is choosing which one!