Published on 29/03/2018 by Any Business.Com.Au

The beauty business is not only skin deep

As it turns out, it takes lot of effort to keep us looking and smelling our best - an absolute army of products and services, in fact.

Cosmetics, skin care, hair styling, hair coloring, hair removal, nail salons, tanning salons, massage parlours and luxury spas, shower and shaving product, perfumes, colognes...and a whole lot more.

And that's where it starts to get interesting - within each of these segments are products for every different skin tone or texture, allergy, age, hair type or color, sex - even the time of day! It is a level of diversity and nuance that may go unnoticed to the casual observer. Some of us, in fact, are overwhelmed by all those rows of shaving cream.

But increasingly we are the minority - most consumers care, are discerning, and will try a number of different products before finding something that works.

Once they find it, however, brand loyalty - whether for a shampoo or a particular salon - is extremely strong.

The Hairdressing and Beauty Services industry has expanded over the past five years.

Rising demand for beauty treatment services has been propelled by the emergence of new markets, higher discretionary incomes and a growing population.

The increasing popularity of high-priced beauty treatments such as laser hair removal and microdermabrasion has lifted revenue in some segments.

Growing image consciousness among men has boosted demand for industry services such as hair removal. Industry revenue is expected to increase by an annualised 1.3% over the five years through 2017-18, to $4.9 billion.

Employment and Opportunity

The Hairdressing and Beauty Services industry has a low level of capital intensity. For every dollar that the industry spends on wages, an estimated $0.04 will be invested in capital costs in 2017-18.

Similar to most personal services industries, the industry relies heavily on labour to provide its services. Hairdressing and beauty salons require high one-on-one contact with clients, and personalised service is paramount to customer satisfaction.

Employees can typically only work with one customer at a time, making the industry highly labour-intensive.

Products and Services

The industry is built on the product and services that help us look our best - whatever that best may be.

It's more diverse than you think and it's certainly not just the makeup, hair color and perfume - it's also the deodorant, toothpaste and even the ear hair clippers. It's not just the salons - it's the barber shops, waxing franchises, massage franchises and a whole lot more.

It is every product and service dedicated to helping us look - and smell - the way we want, or the way we believe we should for professional reasons. And our definition of beauty is malleable and ever changing - providing never ending opportunities for the industry to innovate.

Trends

Gone are the days where celebrity taste-makers created trends, with 82% of women now believing that social media drives these trends.

It's a constant flow of information and opinion from not just trendsetters or celebrities, but from friends and friends of friends and an entire universe of strangers.

But however they are set, there is a large industry ready, willing and able to cater to them. It is resistant to economic downturns and poised for even more growth.

For the entrepreneur there are plentiful representative sales opportunities within companies like Avon or Arbonne and many more traditional franchising opportunities providing a slew of services.

A Diverse Industry

Producers differentiate themselves through their target demographic markets, price point and with different manufacturing processes. Products that promise no animal testing or that are all natural, for example, have loyal, niche markets and can often charge a premium.

Service providers compete primarily through price, location as well as their target demographic markets. Types of service and the related products that are offered are vital to profitability. Hair salons and barber shops, for example, rely on 5-15% of their revenue from hair care product sales.

Putting the right product on the shelves can make or break a business. Some manufacturers have a franchising distribution system of their own and even offer training programs, or partner with a particular service provider.

With strong and growing demand, employment estimates through the roof to meet that demand and a strong history of being a steady business even in turbulent times, the beauty industry continues to provide fantastic opportunities.

AnyBusiness.com.au

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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