Beauty and Personal Care Business Trends: The Levers That Boost Valuation
Remaining current with trends is important for business owners in the beauty and personal care industry. It's not just beauty and wellness trends that business owners need to be on top of—they also need to stay informed about technology, marketing strategies, and consumer behavior. The trends that shape consumer preferences also influence the valuation of beauty businesses. Business owners in the salon and spa industry are closely following three significant trends: technology, sustainability, and the growing popularity of clean beauty products. Understanding the impact of these transformative trends on business valuations is important for business owners looking to succeed in the sector.
Tech Innovations
As the beauty and personal care industry rebounds from the pandemic, technological advances are reshaping how hair salons, barber shops, nail salons, and spas operate. Innovations in technology are not only transforming consumer experiences, but also redefining business operations. As consumers look for more personalized experiences, technology is playing an increasing role. Cutting-edge virtual try on and hairstyling applications allow customers to tailor and experiment, fostering engagement and customer satisfaction.
Behind the scenes, efficient management systems are changing how salons operate. With 67% of customers preferring to make appointments online, beauty service businesses are using scheduling software to manage appointments, reminders, and rescheduling. Software also helps beauty business owners with inventory management, client databases, loyalty programs, and payment options. As beauty and personal care service businesses combine their in-store and e-commerce strategies, those who successfully navigate the digital landscape and leverage online platforms to create multiple revenue streams can extend market reach and generate increased sales. Businesses with reliable and well-documented operations build market value, and the adoption of technology systems can lead to higher business valuations.
Sustainability
Sustainability has evolved from a trendy term to a powerful motivator for consumers, especially in the beauty space. With heightened environmental awareness, consumers are looking for products that align with their values. This shift towards eco-consciousness has a direct impact on the valuation of beauty businesses. Consumers are increasingly drawn to beauty brands that adopt sustainable practices, from sourcing raw materials responsibly to eco-friendly packaging. For beauty and personal care services businesses that also sell retail products, embracing sustainability can lead to increased revenue. According to a recent survey, 58% of consumers will pay more for sustainable versions of their regular personal care products.
Sustainable practices are also important for beauty and personal care service providers. Hair, nail, massage, and tanning salons are prioritizing sustainability by reducing water, energy, and waste. Eco-friendly tanning salons are setting industry standards by implementing sustainable practices and providing customers with tanning options that are vegan and cruelty-free. By demonstrating a commitment to environmental responsibility, businesses can increase brand loyalty and create a positive perception among consumers, ultimately boosting their overall value.
Clean Beauty
Clean beauty, with its focus on non-toxic ingredients, is reshaping the beauty and personal care industry. The clean beauty industry is rapidly growing, with projected market value expected to reach over $14 billion by 2028. As consumers examine product labels and look for brands that prioritize clean and safe ingredients, business owners committed to clean beauty products and treatments can capitalize on rising demand. Businesses that proactively comply with clean beauty regulations or exceed these evolving standards not only position themselves as industry leaders but also mitigate risks. Embracing clean beauty practices fosters trust, bolsters brand equity, and positively influences the perceived value of the brand and the business. Beauty enterprises that adapt to this change in consumer preferences are experiencing heightened demand, leading to increased market value.
Beauty and personal care businesses can capitalize on current technology innovations, sustainability practices, and clean beauty trends to not only meet consumer demands but also increase their business’s value. The beauty industry is constantly changing, making it vital for businesses to stay ahead of trends in order to succeed and create value. For more, visit our industry guide, which provides business owners in the beauty or personal care sector with expert insights on valuing and selling their business.