Business of Beauty:
M a x i m i z e Yo u r
Profitability
D e f i n i n g t h e F u t u re o f B e a u t y R e t a i l i n g
B u s i n e s s o f B e a u t y : M a x i m i z e Yo u r P r o f i t a b i l i t y
NAHA 2007 Salon Design Winner - 6 Salon
Why this study was commissioned
extremely
The retail beauty industry in the United States is
large,
growing
fast
and
extraordinarily
competitive. While there is significant opportunity for
salons
is
to
also
continue
to
considerable
competitors
–
from
grow
retail
threat;
focused
an
retail
sales
and
profits,
e v e r- g r o w i n g
competitors
there
variety
to
of
Internet-
based sellers – vying for a piece of this profitable business.
While
salons
have
traditionally
focused
on
component of their businesses, taking a more
the
service
studied and
diligent approach to the retail portion of the
business will play an important role in their current and
future success.
With
this
in
Association
mind,
and
in
July
the
PBA
2008
the
Professional
Foundation
comprehensive research study with an
Beauty
commissioned
a
ambitious goal:
I d e n t i f y a n d c a p t u r e t h e o p p o r t u n i t y to dramatically increase retail sales and profitability within salon outlets.
For more information about the work of the Professional Beauty
Association (PBA) and the PBA Foundation and to order additional
c o p i e s o f t h i s r e p o r t p l e a s e v i s i t p r o b e a u t y. o r g .
CD Table of Contents
I. In troduction
II. Executive Summary
III. State of the Retail Sales Industry
IV. The Case for Change
V. Attitudes Toward Retail Selling
from Two Essential Perspectives:
The Stylist and the Consumer
VI. Benchmarking Retailers: Beauty is Every w h e re
VII. Maximizing Retail Sales in Salons
VIII. Next Steps
IX. Conclusion
X. Acknowledgements
XI. Appendix
D e f i n i n g
t h e
F u t u r e
o f
B e a u t y
R e t a i l i n g
© 2009 Professional Beauty Association: No unauthorized redistribution or repurposing.
1
B u s i n e s s
o f
B e a u t y :
M a x i m i z e
Yo u r
P r o f i t a b i l i t y
Introduction
The study set two broad objectives:
• I d e n t i f y c u r r e n t s u c c e s s f u l r e t a i l s t r a t e g i e s s o t h a t t h e y c a n b e c o m e b r o a d m o d e l s f o r t h e i n d u s t r y ;
a n d r e p l i c a t e t h e s e m o d e l s a c r o s s t h e i n d u s t r y t o
i n c r e a s e s a l e s a n d p r o f i t a b i l i t y .
• I d e n t i f y a t t i t u d e s a n d p e r c e p t i o n s t h a t :
• C u l t i v a t e s a l e s a n d c u s t o m e r l o y a l t y ,
s o t h e y c a n b e l e v e r a g e d ; o r ,
• I m p e d e r e t a i l p r o f i t a b i l i t y , s o t h e y c a n b e
c o n v e r t e d t h r o u g h e d u c a t i o n , o b s e r v a t i o n a n d b e l i e f .
A task force of leading manufacturers, distributors and salon
owners was established to study these questions. The outcome
of this joint effort is presented here as:
B u s i n e s s o f B e a u t y : M a x i m i z e Yo u r P r o f i t a b i l i t y
Defining the Future of Beauty Retailing
The premise of this study is that the retail component of
salons creates and offers significant opportunity within the
salon industry to:
• R a i s e s a l e s a n d p r o f i t s
• I m p r o v e t h e c u s t o m e r ’ s b e a u t y r e t a i l e x p e r i e n c e
• C r e a t e a m o r e w e l l - r o u n d e d a n d p r o f i t a b l e b u s i n e s s
• C o m p e t e e f f e c t i v e l y w i t h c u r r e n t a n d f u t u r e
n o n - s a l o n r e t a i l c o m p e t i t i o n
Purposes of
This Report
1.
This report provides the following data for the professional beauty industry:
• I n d u s t r y
data on the size of the market
• P r i m a r y r e s e a r c h f r o m t h e p e r s p e c t i v e s o f t h e s t y l i s t
a n d t h e c o n s u m e r
• D e t a i l e d b e n c h m a r k i n g o f r e t a i l a n d i n d u s t r y - w i d e
b e s t p r a c t i c e s
2.
• A
prescription for improving retail sales
This report defines vast opportunities to:
• R a i s e
retail sales and profits
• E n h a n c e
3.
the overall salon experience
This report is intended to be a strategic blueprint for
the growth of retail sales at salons. While numerous
actionable points are addressed here, detailed
recommendations and how-tos will follow in reports,
workshops and other educational opportunities.
This report will drive members of the Professional Beauty
Association toward maximizing profitability in salons
through improved retail effectiveness.
NAHA 2008 Salon Design
Entrant - Salon Zurell, LLC.
D e f i n i n g
t h e
F u t u r e
o f
B e a u t y
R e t a i l i n g
3
B u s i n e s s o f B e a u t y : M a x i m i z e Yo u r P r o f i t a b i l i t y
Resource and
NAHA 2009 Salon Design Finalist - Tribe Hair Studio
This st u d y
yielded t h e m o s t
compre h e n s i v e
resourc e a n d
referen c e
materia l s
produc e d t o
date fo r t h e r e t a i l
salon in d u s t r y.
This rep o r t i s
fact ba s e d a n d
informa t i o n r i c h
and wil l b e u s e f u l
in infor m i n g f u t u r e
decisio n m a k i n g
within t h e i n d u s t r y.
Input for this report was
provided
by
numerous
stakeholders
who
have
a direct impact on beauty
retail salon success. The
data provides:
An overview: What is the
size
of
the
opportunity?
What are the global retail
beauty industry trends? This
comprehensive
analysis
examines
and
quantifies
t h e i n d u s t r y ’s c u r r e n t s i z e
and
trends
and
makes
projections for the future.
The
stylists’
points
of
view
on
selling
retail
products within the salon
experience: What are their
attitudes and opinions on
the current experience and
how it could be improved?
Information
was
gathered
from more than 450 stylists,
owners and stylist-owners.
This
component
of
the
study
was
conducted
in
cooperation with the National
Cosmetology Association.
Reference Materials
The consumers’ points of view on expectations of the
retail experience within salons: What are they looking for? Nearly
1,000 consumers were interviewed about their retail beauty buying
habits and specific views on their retail experience at salons.
Data from interviews with manufacturers and
distributors about their points of view on current practices
in salon beauty retailing and how those practices could be
improved. Seven interviews were conducted.
Identification of best practices within the salon
re t a i l i n g i n d u s t r y : W h o ’s d o i n g i t r i g h t i n t h e s a l o n i n d u s t r y ?
Thirty best-practice salons around the country were interviewed
to document their current successful systems and strategies.
Information about best practices in overall beauty
retailing: What information is available in a study of highperforming, non-salon beauty retailers? The practices of
r e t a i l e r s , i n c l u d i n g S e p h o r a , U l t a , W a l g r e e n s , C V S , Ta r g e t
and Wal-Mart, were evaluated to understand their approach to
t h e b e a u t y c a t e g o r y.
During each critical phase, the task force met, reviewed results
and offered input that helped shape the findings in this document.
D e f i n i n g
t h e
F u t u r e
o f
B e a u t y
R e t a i l i n g
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