Industry observers agree that the recession changed purchasing patterns for hair services. While consumers continued to go to the salon for trims and haircuts, they have been stretching out time between appointments and seem less likely to book color treatments and the like, maybe opting for an at-home kit sold in the drugstore instead.
Haircutting services make up the bulk of the revenues pulled in by the salon industry. IBIS World estimates that the segment will account for nearly 47% of the $37.5 billion hair and nail salon industry revenue in 2011, up from 42.4% in 2006. Meanwhile, hair coloring and tinting services account for 20.4% of sales, down slightly from 20.9% in 2006, while “other” services, which includes permanent texture modifications like curls or straightening, are expected to fall from 14.1% of industry revenues in 2006 to an estimated 13.3% in 2011.
Nary a salon owner or stylist would drop her shears if she heard those numbers. She’s lived it. This already quite competitive and mature marketplace took a hit over the past several years.
“The salon industry did not do too well during the recession unless you were a salon that actually was already running a successful salon,” said Stephen Marinaro, a professional stylist for more than 19 years who is the face behind thesalonguy.com, an informational website targeting the salon industry, dishing advice on styling techniques, salon technology and products, mixed with red carpet news and interviews with salon professionals.
“Just like the stock market in a way, if you hung in there you could have lost it all or made it back by now, however it is not that easy. Many salons close down on a regular basis; now they are closing even more and it is the result of a lack of a business model, plan, direction, culture and service.”
Even Regis Corp., the world’s largest hair salon company, saw sales decline in its most recently reported quarter. The Minneapolis, MN-based firm, which counts nearly 12,700 salon doors including SuperCuts, Sassoon Salon and Hair Club for Men, reported that revenues in the third quarter ended March 31, 2011 fell 1.1% to $581 million, with third quarter total same-store sales declining 2.3%. Those numbers followed revenue declines of less than one percent and 1.3% in same-store sales during Q2.
Fluoro5 Elixer is new from Number 4.
“We were disappointed with our underlying operational results in the third quarter which fell short of plan and were down from the same period last year, largely due to a continuation of the same-store customer visitation trends we’ve seen in past quarters,” commented Randy L. Pearce, president of Regis, upon release of the third quarter report released in late April. “Our focus is to drive increases in consumer traffic in our salons.”
As Regis executives point out, the recession put the brakes on the number of visits consumers were willing making to the salon. Still, there are always those willing to reach into their pockets to be coiffed by a professional, say industry experts.
“Customers have cut back where they can and will save money in times like these, however I find that the clients that want to look their best and feel their best will not stop spending,” Marinaro said.
Another industry veteran, Shauky Gulamani of InGlam Inc., echoed that sentiment.
“We are truly blessed that we are in a recession proof business. People may go to the salon less but they still have to go as they need their hair cut or colored,” he said.
But their willingness to spend on treatments doesn’t always translate to product sales at the salon.
According to Gulamani, a slacking salon retail business stems from diversion.
“Salons can’t compete with professional brands that are sold in the mass retail at a lower or equal price to what the salon professionals can buy it for,” he told Happi.” If manufacturers would only support the salon professionals that made their company what they are today and not be greedy then the salon business would not suffer.”
Fahrenheit 450° One Pass is ThermaFuse’s new hot iron treatment.
And he’s doing something about it by launching his new company, InGlam Inc. According to Gulamani, InGlam will serve as a “professional-only, diversion-free hair care manufacturer devoted to hairstylists, salons and their clients, ensuring the highest quality parts, ingredients and the most advanced science.”
But is now the best time to enter a market? After all, times have been tough, and the space is dominated by the likes of L’Oréal and P&G, which own many of the leading salon brands.
“There are a lot of manufacturers in the salon/pro market, and yes it may be intense but from meeting and working with distributors the one thing I hear over and over is that manufacturers starting out don’t really understand the professional salon market and they are expecting the distributors to do their job,” he said. “My experience and knowledge of over 28 years in this industry is my advantage with InGlam. We know how to support the professional salon distributors, salons and stylist with truly innovative products, education, marketing and public relations.”
Gulamani is currently establishing a distributor network, and plans to have full coverage of the U.S. and Canada by end of July. The company’s offerings will include wet products under brand names such as Modern Textures as well as styling tools and accessories.
“Modern Textures by Shauky is the first line I am putting my name on because I truly believe that the products we are launching are truly unique and superior,” he said. One of the first products to bow will be HairScrub, which Gulamani calls the first scalp exfoliator with a hair purifier on the market.
“We use facial scrubs and body scrubs all the time,” he said, “but no one has thought about the scalp. It is skin below the hair that also needs to be exfoliated allowing the follicle to remain clean and be able to produce healthy hair.”
For Gulamani, R&D will play a big role in his new venture’s success. “We believe in developing new innovative products to help salon professionals do better at their craft. Science will be a key factor for us where we can show the stylist the truth behind our products.”
Toni Wells, a brand director at Number 4, also pointed to the role smart R&D and great ingredients play in the success of a salon line.
“Brands focused on producing superior quality products with new technology are growing, however sales of established brands with no new innovations are more or less flat. At Number 4 High Performance Hair Care, we’ve doubled our business in the past year.”
Among the newest products from Number 4 is Fluoro5 Elixer Restore & Repair Oil, a lightweight hair care treatment with fluorosilicone.According to Number 4 chemist Rolf Mast, “the best, lightweight treatment should operate inside the hair, not just leave a heavy oily film on the hair surface.
Silicones are more lightweight than natural oils, but provide even better shine. They are essential for the best performance,” he said.
Mast noted that too much oil in the product attracts natural hair oil (sebum), increasing weight and dullness over time.
“Fluorosilicones fight time by working against the effects of natural hair oils to maintain the shiny, light look,” he said.
A Straight Shot
Aside from the recession, the salon market has been abuzz about “Brazilian blowouts” and other treatments designed to straighten hair. At the center of the controversy was safety, stemming from the amount of formaldehyde used in some formulations as well as products being mislabeled as formaldehyde free, which in turn were not.
From the fallout have come new treatments and products that promise to help straighten locks with less risk.
For example, Pravana Naturceuticals has created Perfection SmoothOut, a patent-pending formula that safely transforms frizzy, coarse, or curly hair into soft, smooth locks, fulfilling a client’s desires while keeping her and her hair healthy, according to the company.
Perfection employs a nano-amino acid complex, which also features a heat protective polymer and reducing catalyst. It is activated with heat to allow the solution to penetrate the hair fiber and to suspend the hair’s “textural memory.”
Great looking hair is always in style.Cover photo courtesy: Number 4 Hair Care. Hairstylists Anthony Cress and Kimmi Le. Photographer Sasha Sheldon.
The advanced formula lets users set their flat iron to just 360° and after receiving the Perfection SmoothOut, clients can maintain their locks for 8-12 weeks with the aid of the specially formulated system which Pravana created to ensure the longevity of the SmoothOut. Pravana’s Perfection Smoothing Shampoo and Conditioner are sulfate-, salt- and paraben-free. Plus, Perfection’s gentle formula allows for cleansing and color services to be performed immediately after the SmoothOut.
For flat iron fanatics, there’s new Fahrenheit (f450°) 450° One Pass by ThermaFuse, a hot iron-activated smoothing crème that creates a smooth, sleek surface in just one pass of the flat iron. The formulation infuses hair with rich moisture and proteins, combating the brittleness caused by extreme heat.According to Thermafuse, the product has been tested and proven to leave hair in better condition than it was before styling, controlling cuticle abrasion 80% more effectively than competing products.
Powering f450° One Pass is Cuticle Fusion Complex, a combination of certified organic olive oil, blue agave nectar, cactus flower and blue lotus flower extracts chosen for their ability to grow and thrive in hot climates. They are said to work together to smooth and seal the hair’s cuticle, simultaneously locking in healthy moisture while repelling environmental dampness that could cause locks to revert and become unruly.
Philip Pelusi has rolled out his own formaldehye free blow out treatment. P2 Formaldehyde Free Blow Out Keratin Treatment with Ceramide Complex is safe for stylists and their customers and does not require gloves, masks or special ventilation, according to the company.
A semi-permanent treatment, it eliminates frizz and leaves the hair smoother and shinier for approximately four to six weeks.
Coloring, highlighting and tinting is also big business for salons, representing the second largest block of revenues after haircuts. For customers who do get these often pricey services, products that promise to protect that investment can lead to increased retail sales for salons.
Recently, Sebastian Professional rolled out Color Ignite, billed as a unique line of professional color care products with two custom-tailored formulas designed for the color techniques employed by the salon.
According to Sebastian, since water alone is responsible for 80% of color loss, there’s a great need to care for color-treated hair with a shampoo and conditioner that contain the appropriate ingredients that work in concert to allow conditioning properties to adhere to hair. To address this, Sebastian Professional formulated the Color Ignite regimen with “Smart Color Complex,” which contains smart polymers in the shampoo that allows conditioning agents to adhere to the color-treated hair. In the Single Tone Shampoo and Conditioner (for single tone colored hair), the complex helps seal the cuticle and smoothes the hair surface. In the Multi Tone Shampoo and Conditioner (designed for multi-tonal and lightened hair), the complex targets damage or gaps on the hair strands and helps restructure them to unleash color vibrancy on both the colored and highlighted strands, according to the company.
Plus, Color Ignite has a unique form—it’s whipped, which helps achieve even application across all hair fibers. There are thousands of micro bubbles that create a super thin veil of color protection polymers that reach and wrap each hair fiber, according to Sebastian.
At Pureology, new Perfect4Platinum is said to deliver longer lasting color vibrancy to hair that has been high-lifted or highlighted four levels or more. The formula includes keravis, billed by the brand as an anti-breakage hair fortifier. The range includes shampoo, conditioner, a repair product and Perfect4Platinum MiracleFiller, which contains 15 times the keravis that will repair up to 78% of strength caused by lightening.
Salon brand Aloxxi has also reported advancements in the color care category in new ColourPrime Pre-Color Treatment and ColourLock Post-Color Finisher. They are designed to reveal more vibrant, longer lasting color by prepping hair before and protecting it after the process.
ColourPrime Pre-Color Treatment is an all-in-one gentle herbal cleanser, scalp desensitizer, porosity equalizer and color extender that preps the hair to receive color, providing a more even surface and longer-lasting results. The ColourLock Post-Color Finisher is a botanically enriched formula that finishes the color process by cleansing, conditioning, reducing the hair’s pH, neutralizing residual peroxide and closing the cuticle, all in one step.
According to Kim Donovan, marketing director of Aloxxi, having a shampoo, conditioner and chemical antioxidant treatment in one not only reveals hair that looks and feels silky, shiny and beautiful “but gets clients in and out of the salon with time to spare.”
Less Time Is More Money
Getting customers serviced efficiently is key to every salon’s business, and to this end, McBride Research Laboratory’s pHusion brand has recently introduced the new pHusion Cool Cap. This dual processing disposable cap is said to concentrate the heat between the cap and hair dryer to reduce drying time by 50% as it enhances the customer’s experience.
According to Tracey A. Gibson, director of marketing for MRL, the Cool Cap ensures stylists achieve styling goals in reduced time, gives clients a more comfortable drying experience and reduces drying time by 50%, which helps the salon conserve energy and increase client efficiency.
Those are all good things for salon owners. And there might just be some more. According to IBIS World, demand for hair and nail salon services is showing signs of new life. Between 2010 and 2011, revenue was expected to increase 2.8% to $37.5 billion, according to the research firm.
In addition, statistics from a SymphonyIRI’s MarketPulse survey point to consumers holding the purse strings just a bit less tightly in their day-to-day lives—which might just mean more booked hair appointments. According to the survey, 49% say they are visiting hair salons less often, down from 55% percent last year.
A market that’s bouncing back is beneficial to professional product companies too. Having weathered the storm, some are adjusting their operations in an effort to be more nimble.
Recently, American Crew, the men’s professional grooming brand, has strengthened relationship with distributor Beauty Systems Group(BSG), a subsidiary of Sally Beauty Holdings, Inc.
Designed to streamline distribution and reinforce its focus on building the men’s business in salons, American Crew has granted BSG exclusive distribution in 22 states and the distributor will also handle distribution for d:fi hair products.
According to Marinaro, success in the salon product side of the business boils down to the relationship between the brand and the stylist—and keeping product only in his shop.
“Being a leader these days in the product world really is simple. If you stay true to the stylist, do not sell to drug stores and discount stores, provide great education, support and quality, things will work out well,” he said. “There are so many companies that deny selling to outlet stores, yet you find huge amounts of the product on the shelves. If you are going to sell to them, just admit it and don’t mislead people in the industry. Technology, education, rewards and helping the business grow are all important elements.”