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Salon Services - US - September 2018

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Overview
The issues
Bad experiences can result in lost sales and customers
Figure 1: Attitudes for receiving services, July 2018
Alternative destinations pose a threat to traditional salon formats
Figure 2: Destinations, July 2018
The opportunities
Desire for professionals drives loyalty among most consumers
Figure 3: preferences for receiving salon services, July 2018
Don’t overlook the men
Figure 4: Frequency of services, by gender, July 2018
What it means
THE MARKET – WHAT YOU NEED TO KNOW
A positive sales trend is expected to continue
Destinations are on the rise
Consumers have more needs and more money to spend
MARKET SIZE AND FORECAST
Double digit growth expected over the next five years
Figure 5: Total US sales and fan chart forecast of salon services, at current prices, 2013-23
Figure 6: Total US revenues and forecast for salon services, at current prices, 2013-23
MARKET BREAKDOWN
In-home versus out-of-home
Figure 7: Destinations – out-of-home versus in-home, July 2018
Destinations are on the rise
Figure 8: Total number of salon service establishments 2013-18
MARKET FACTORS 
Population of women supports category growth, creates various needs
Figure 9: Female population by age, 2013-23
Young men could drive additional category interest/opportunities
Figure 10: Male population by age, 2013-23
Multicultural population growth creates diversified beauty needs
Figure 11: Population by race and Hispanic origin, 2013-23
More income could enable more spending and frequency
Place of residence could influence where and how consumers receive salon services
Figure 12: Number of households, by area of residence, 2007 and 2017
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Many consumers are loyal to their preferred professional
Other, more convenient formats could challenge traditional salons
Rethinking branding, pricing, and at-home products
WHAT’S WORKING?
Men care about their appearance
Figure 13: Frequencies of services, by gender and age, July 2018
Most consumers are loyal to location, stylists
Figure 14: Repertoire of destinations, July 2018
Salon goers describe which services they leave to the professionals
WHAT’S STRUGGLING?
Beauty bars are a potential threat to traditional salons
Figure 15: Destinations by Types of Services, July 2018
Salon customers describe their preferred booking methods
WHAT’S NEXT?
Evolving beyond a destination and into a brand
Figure 16: Preferences for and attitudes toward receiving salon services, July 2018
Will at-home become the new “it” destination?
Figure 17: Attitudes toward receiving salon services, by select demographics, July 2018
Rethinking pricing
Trends on the horizon
A continued focus on hair care
Figure 18: Sephora email campaign, August 2018
Figure 19: Sephora email campaign, October 2017
THE CONSUMER – WHAT YOU NEED TO KNOW 
Salons are top destinations, but at-home services on the rise
Hair care is a top priority, but some seek other treatments more frequently
Professional preference fuels loyalty
A bad experience could be detrimental
DESTINATIONS 
More consumers seek expert service
Figure 20: Destinations, July 2018
Older women head to the salon, while young men seek services at chains and barbershops
Figure 21: Destinations, by gender and age, July 2018
Moms and younger generations have a DIY attitude
Figure 22: Destinations, by select demographics, July 2018
Hispanic consumers prefer chain salons, while Black consumers opt for in-home services and barbershops
Figure 23: Destinations, by race and Hispanic origin, July 2018
TYPES AND FREQUENCIES OF SERVICES
Hair care is a top priority
Figure 24: Types of services, July 2018
Figure 25: Frequency of services, July 2018
Dads and young men experiment with tanning, anti-aging services
Figure 26: Types of services, by select demographics, July 2018
Older women routinely seek hair and nail maintenance, while younger women pamper themselves in other ways
Figure 27: Types and frequency of services, by gender and age, July 2018
Hispanic consumers seek a variety of services
Figure 28: Types of services, by Hispanic origin, July 2018
REASONS FOR RECEIVING SERVICES
Routine maintenance and pampering drive salon services
Figure 29: Reasons for receiving services, July 2018
Younger generations prioritize pampering, regardless of income
Figure 30: Reasons for receiving services, by age and household income, July 2018
Style and self-care are important to moms
Figure 31: Reasons for receiving services, by parental Status, July 2018
Multicultural adults cite social activity, pampering as reasons for choosing salon services
Figure 32: Reasons for receiving services, by race and Hispanic origin, July 2018
PREFERENCES FOR RECEIVING SERVICES
A preference for professionals
Figure 33: Preferences for receiving services, July 2018
Women display a loyalty to their stylist
Figure 34: Preferences for receiving services, by gender and age, July 2018
Outside sources influence younger generations
Figure 35: Preferences for receiving services, by gender and age, July 2018
Multicultural consumers prefer using products from trusted sources
Figure 36: Preferences for receiving services, by race and Hispanic origin, July 2018
ATTITUDES TOWARD RECEIVING SALON SERVICES
Negative experiences and stylist recommendations strongly influence consumers’ decisions
Figure 37: Attitudes toward receiving salon services, July 2018
Young men are more forgiving
Figure 38: Attitudes toward receiving salon services, by gender and age, July 2018
Multicultural consumers don’t stick to the salon
Figure 39: Attitudes toward receiving salon services, by race and Hispanic origin, July 2018
In their own words
CLUSTER ANALYSIS
Consumer attitudes split between adventurous, cost-conscious, enthusiastic, and professional preference
Figure 40: Cluster analysis – Attitudes toward receiving salon services, July 2018
Figure 41: Attitudes toward receiving salon services, by attitudes toward receiving salon services clusters, July 2018
Cost-Conscious Customers
Figure 42: Profile of cost-conscious customers, July 2018
Engaged Enthusiasts
Figure 43: Profile of engaged enthusiasts, July 2018
Preference for Professionals
Figure 44: Profile of preference for professionals, July 2018
Salon Adventurers
Figure 45: Profile of salon adventurers, July 2018
PRICE SENSITIVITY
Price influences the types of services and destinations consumers seek
$40 is the sweet spot for hair color services
Figure 46: Price sensitivity analysis- threshold price chart, July 2018
Figure 47: Price sensitivity analysis- Optimal price point (opp), July 2018
Women are willing to spend more
Figure 48: price sensitivity analysis, by select demographics, July 2018
Hispanic consumers are more price sensitive
Figure 49: Price sensitivity analysis, by race and Hispanic origin, July 2018
How much, and for what, consumers are willing to pay
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET 
Figure 50: Total US sales and forecast of salon services, at inflation-adjusted prices, 2013-23

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