Unlocking Growth in the new era of Salon Suites: 5 Must-Know Trends for Savvy Location Owners

This is for all those out in salon land. In this article, I will go over some major shifts happening in the beauty industry, and how they are likely to affect the salon suite facility owners and operators.

As we all know, the pandemic threw a wrench into the gears of the beauty industry- according to the PBA, 84% of salon industry jobs were lost between February and April of 2020. And while it feels like our collective time inside was a lifetime ago, the effects of it still linger (hello inflation). The good news is that the salon industry is bouncing back. And even though it’s looking like it will be closer to 2027 for the industry to reach pre-pandemic levels of revenue, it's essential to adapt to trends we see immerging and contemplate how salon suite owners and operators can use these trends to better serve their current suite pros who survived the downturn, and attract new ones who can push the industry forward.

I recently came across a fascinating article from McKinsey & Co. that sheds light on the key trends that will define the future of beauty services. The most important takeaway for salon suite facility owners? The same old sales pitch and service level may not cut it going forward. To help keep you ahead of the curve, let's dive into the key factors affecting the salon industry at large, and how they could impact your marketing and operations strategy.

Growth in beauty players offering both products and services: Merchandise sales in spas and salons are on the rise, with the market expected to grow from $4 billion to $6 billion by 2027. As a salon suite facility owner, it’s in your best interest to help your suite professionals find ways to diversify their revenue streams, like selling more products. This could be achieved through partnerships with beauty brands and retailers so your pros can realize better margins, providing better visual merchandising opportunities within your facility, and/or educating your salon pros on how they can sell more products during the course of their services. Salon suite facility owners like you can use these types of benefits as market differentiators and market them by highlighting the outcomes and diving into how you support those in your locations.

Specialized over generic: Consumers crave personalization, and salon suite facilities are uniquely positioned to house a variety of specialized services in a single location. Encourage your suite professionals to develop their niche and market their expertise. Push your tenants to determine what makes the different from the other pros down the hall. Once your lead flow is sufficient, it will advantageous to run end consumer-facing marketing campaigns focusing on the diverse range of specialized services offered at your facility, creating a one-stop-shop destination for all beauty needs. This helps keep your tenants busy, and your bottom line protected.

Growth in advanced procedures: As we’ve mentioned in prior blogs, tenant selection is a major key to the success of your salon suite facility. When it comes to skincare professionals, it may be best to favor the more high-tech or more advanced estheticians over the traditional skincare service providers. The pandemic forced many would-be customers to get used to applying more basic treatments themselves at home, which has led to the rise of advanced treatments such as injectables and high-tech skincare. While traditionally there may be one or two of these types of service providers in a suite location of 30-40 salons, the number is likely to grow as demand for these types of services increases in the market. Your marketing efforts should emphasize how advanced service providers can thrive in a salon suite environment.

Centrality of customer experience: In a post-pandemic world, customers crave unique and premium experiences. The discount or bargain service brands are likely to see slower growth as many of their customers learned to live without during the 2 years they were forced to. Conversely, the more premium experience service providers are likely to see a much faster rate of growth over the next few years. That’s where you as a salon suite location owner can step in. Focus on creating an unforgettable atmosphere in your salon suite facility by offering top-notch customer service, ambiance, and luxurious amenities- not only to your salon professionals but their clients as well. Striking lobbies, immaculate hallways, and pristine bathrooms will likely need to be a bare minimum for attracting higher-level service providers.

Shifts in the service-provider labor market: According to the article, 75% of the pros that left the beauty industry had fewer than 3 years of experience. This has led to a rather large talent gap hitting the market right now, and explains why most of the leads salon suite facilities are getting are either pros with over 6 years of experience or right out of school. This gap is strongarming the salon suite owners into more of a nurturing phase when it comes to leads, especially for the young pros who haven’t had the time to build a book quite yet. To do this we recommend planning activations around younger Cosmo professionals like sponsoring beauty school mixers, to make owning a suite a goal of the next generation of beauty pros. On the other end, for those who do have the experience, competition for their business will be tough. Offering competitive, differentiated amenities, like business support services, or learning opportunities to make your facility an attractive workplace for top talent will be critical.

As many salon suite businesses saw, the pandemic pushed many of the beauty pros thinking about making the leap to salon ownership over the edge and into a suite. But with much of the low-hanging fruit and the large driver that was the pandemic gone, it will take a more concerted effort and effective adaptation to the immerging beauty industry trends to grow a successful salon suite business.

To all of those owners and operators facing challenges in getting new leads or looking for better ways to keep the pros you have in your suites, let’s chat! This industry is our bread and butter, and we’re always open to learning more and solving problems.

Stay bold, keep pushing the envelope, and let's continue to revolutionize the salon suite industry together.

Until next time,

Stephen Cassano

CEO, Bow Tie Social