Professional Beauty Services - US - December 2005

INTRODUCTION AND ABBREVIATIONS
Introduction
Other relevant reports
Definition
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Market grows, as haircuts remain an essential beauty service
Hair services is the largest segment
Many services are “special occasion”
Busy lifestyles conflict with more demanding appearance standards
Men and minorities key to long-term growth
Hispanics also show strong growth potential
A highly fragmented market
A search for a niche
The key: customer satisfaction
The consumer: haircuts the number one reason for salon visits
Young women versus older women
Income correlates closely with usage
Expenditure on beauty services
Income is not a significant factor when purchasing salon products
Purchase of salon products
Future trends
A wider range of price points
Forecast
MARKET DRIVERS
Introduction
 CULTURAL, GENERATIONAL AND DEMOGRAPHIC DRIVERS
The culture of youth and beauty
Age and gender are major factors in use of beauty services and products
Figure 1: Female population projections, by age, 2005-15
Baby Boomers focus on appearance and looking younger
Boomers’ attitudes towards aging
Echo Boomers poised for growth
Men’s market positioned to grow
Figure 2: Male population projections, by age, 2000-15
Men’s interest in grooming
Men’s attitudes towards grooming, salons and salon services
Figure 3: Men’s attitudes towards grooming, by age, March 2003
Tapping into the hair loss market
Race and ethnicity factors
Figure 4: Any incidence of professional beauty services, by race/Hispanic origin, September 2005
Black women spend more on professional beauty services
Figure 5: Black female population projections, by age, 2000-10
Hispanic women show potential for growth
Figure 6: Hispanic female population projections, by age, 2000-10
 ECONOMIC AND INDUSTRY-RELATED DRIVERS
Economic woes
Consumers continue to be pressed for time
Professional treatments and the at-home market
Nail salons a headache for retailers
Boomers' vanity, at-home convenience propel do-it-yourself skincare
Diversion of product sales to retail hurts salons
MARKET SIZE AND TRENDS
Professional beauty salon sales on the rise
Figure 7: Total U.S. retail sales of professional beauty services, at current and constant prices, 2000-05
MARKET SEGMENTATION
Figure 8: Sales of professional beauty services, segmented by type, 2003 and 2005
Haircuts, hair styling, and other hair-related services
Figure 9: Total U.S. retail sales of haircut-related services, at current and constant prices, 2000-05
Products
Figure 10: Total U.S. retail sales of salon products, at current and constant prices, 2000-05
Nail services
Figure 11: Total U.S. retail sales of haircut-related services, at current and constant prices, 2000-05
Other beauty treatments
Figure 12: Total U.S. retail sales of other professional beauty treatments, at current and constant prices, 2000-05
SUPPLY STRUCTURE
Free-standing beauty treatment specialists
Regis International
Ratner Companies
Sport Clips
Ulta
HCX Salons International
Cheveaux Acquisition
The Estée Lauder Companies
Mario Tricoci
Great Clips
Beauty First
Attached salons
Independent contractors
Spas
Figure 13: Top ten most commonly booked spa services, April 2005
ADVERTISING AND PROMOTION
Introduction
Independent shops focus on word of mouth and referrals
The key: customer satisfaction
Multi-outlet chain efforts
Ulta works to increase brand awareness
Targeting the budget-conscious mainstream market
THE CONSUMER
Introduction
Incidence of professional beauty services
Figure 14: Any incidence of professional beauty services, September 2005
Figure 15: Any incidence of professional beauty services*, cross-tabulation with hair services, September 2005
Figure 16: Any incidence of professional beauty services*, cross-tabulation with nail services and other beauty services, September 2005
Men’s visits to beauty salons
Figure 17: Men’s incidence, frequency and mean number of visits to a beauty salon in the past 12 months, September 2005
Figure 18: Men’s incidence, frequency and mean number of visits to a beauty salon in the past 12 months, by age, September 2005
Figure 19: Men’s incidence of and mean number of visits to a beauty salon in the past 12 months, by household income, September 2005
Figure 20: Men’s incidence, frequency and mean number of visits to a beauty salon in the past 12 months, by race/Hispanic origin, September 2005
Frequency for professional beauty services
Hair services
Figure 21: Frequency of hair styling or coloring services, September 2005
Specialized hair services
Figure 22: Frequency of professional specialized hair services, September 2005
Demographics play a significant role in frequency and types of services
Figure 23: Frequency of professional hair styling, coloring and perming, by age, September 2005
Figure 24: Frequency of professional specialized hair services, by age, September 2005
Figure 25: Frequency of professional styling, coloring, perming and braiding, by household income, September 2005
Figure 26: Frequency of professional haircuts and coloring, by race/Hispanic origin, September 2005
Figure 27: Frequency of specialized hair services, by race/Hispanic origin, September 2005
Nail services
Figure 28: Frequency of professional nail services, September 2005
Figure 29: Frequency of professional nail services, by age, September 2005
Figure 30: Frequency of professional nail services, by household income, September 2005
Figure 31: Frequency of nail services, by race/ethnicity, September 2005
Other beauty services
Figure 32: Frequency of having “other” professional beauty services, September 2005
Figure 33: Frequency of usage of other beauty services, by age, September 2005
Figure 34: Frequency of other beauty services, by household income, September 2005
Figure 35: Frequency of other beauty services, by race/Hispanic origin, September 2005
Average monthly spending on professional beauty services
Figure 36: Average monthly spending on professional beauty services, September 2005
Figure 37: Average monthly spending on professional beauty services, by age, September 2005
Figure 38: Average monthly spending on professional beauty services, by household income, September 2005
Figure 39: Average monthly spending on professional beauty services, by race/Hispanic origin, September 2005
Products purchased at salons
Figure 40: Purchase of products, September 2005
Figure 41: Purchase of products, by age, September 2005
Figure 42: Purchase of products, by household income, September 2005
Figure 43: Purchase of products, by race/Hispanic origin, September 2005
Reasons for purchasing hair products at salons
Figure 44: Reason for purchase of hair products at a salon, September 2005
Figure 45: Reason for purchase of hair products at a salon, by age, September 2005
Reasons for not purchasing products at salons
Figure 46: Reason for not making purchase at a salon, September 2005
Figure 47: Reason for not making purchase at a salon, by age, September 2005
Figure 48: Reason for not making purchase at a salon, by race/ethnicity, September 2005
Summary
Haircuts
Upselling hair styling clients into other service offerings
Pedicures and manicures
Facials
Young women versus older women
Income correlates closely with usage
Black women spend more money on a wide array of services
Expenditure on beauty services
Income is not a significant factor when purchasing salon products
Gap exists between rate of products bought at salons and usage of beauty services
With strong customer loyalty, salons could benefit more with competitive pricing
FUTURE AND FORECAST
 FUTURE TRENDS
Salons for men on the rise
Specialized treatments for niche customers
A wider range of price points
Consolidation within the industry likely
 MARKET FORECAST
Professional beauty services
Figure 49: Forecast of total U.S. retail sales of professional beauty services, at current and constant prices, 2005-10
Forecast Factors
APPENDIX: TRADE ASSOCIATIONS