I have just returned from another hectic but enjoyable trip to New York, meeting some very impressive people from the worlds of fashion, luxury, beauty and private equity. I always love visiting NYC and each time I go, I find new insights into how businesses are evolving stateside, and what the market is doing differently to other countries like the UK. From my point of view, it is typically characterised as faster, more convenient and more customer-driven.
This time it really struck me that New York is leading the charge in the growth of the beauty services industry. Indeed these days the major streets of the Big Apple are dotted with new salons specialising in everything from eyebrow grooming (I had one!) to manicures (I had one!) to blow-dries (I had three!). The marketplace is still quite fragmented, and the majority of businesses are either small chains or single-site companies, but investment is coming into the sector and some big brands are starting to emerge.
Take Drybar, a chain of blow-dry bars that now has over 70 locations across the US and its own line of hair care products. Founded only seven years ago, the business made an estimated $100m in revenue in 2016, up from $70m the year before. Castanea Partners invested in the company in 2012, providing funds for its continued expansion.
The business has thrived by offering time-poor female customers access to fast, convenient services. Drybar does not cut or colour hair and instead focuses on simply providing blowouts.
Where previously customer loyalty was based on the personal relationship between the beautician and the consumer, a larger operator like Drybar is creating loyalty based on the consistency of its branding and offer. Indeed, the three blow-dries I got were all with Drybar – it was so easy to find one between meetings without any fuss. Gone are the days of planning your day around a hair treatment!
Drybar founder Alli Webb has said the business plans to expand into Canada and then Europe. Speaking to Forbes, she argued that the Drybar concept has helped to change the way consumers think about hair and beauty services.
“We did, to a certain degree, change behaviour. I say that with a lot of humility. It’s such an easy luxury that can change your day. The awareness for this category really wasn’t there before.” – Drybar founder Alli Webb
The UK remains behind the US on some of these beauty trends, but there are signs it is starting to catch up. Research by the Royal Mail found that more beauty and grooming salons opened in 2015 on the UK’s high streets than any other kind of business, with a net increase of 626 salons. Hairdresser chain Hershesons is among those to have launched new blow-dry bars in the UK in recent years.
Eyebrow grooming has come to the UK, too. According to NPD research, the eyebrow industry was worth an estimated £20m in the UK last year, up from £6.5m in 2011. Cosmetic giants like MAC and Benefit have expanded their brow product ranges in recent years, while Net-a-Porter stocks more than 150 eyebrow products – up from 20 when in launched beauty in 2013.
Blinkbrowbar, a chain of brow grooming salons, has over 20 sites across the country and two in New York. Founder Vanita Parti estimates that the business has tended to over 20 million eyebrows in the past decade, helping it to understand how to get the best results for clients.
“I do believe that blinkbrowbar were the instigators of eyebrow grooming in the UK,” she tells me. “By making it so accessible and visible, people began to appreciate the difference it made to spend time on grooming brows.”
Vanita says she aims to see blinkbrowbar become a global offering in the next five years, with the two sites in New York marking the beginning of a global roll-out. “Our product range is equally growing as women are beginning to realise how easy and important it is to take care of brows at home,” she adds. “We have just launched our product range in Denmark and are rolling out to other hot spots in Europe.”
These companies are finding success based on two pillars. The first is specialisation. What sets Blink and Drybar apart from their peers is that they offer a single service, or a set of services based around a single overarching theme, in a way that multipurpose salons do not. This keeps training costs relatively low and reduces overheads. Drybar’s slogan proudly declares: “No cuts. No colour. Just blowouts!”
This feeds into the second pillar of success: consistency. In a modern world, where the rise of technology makes us busier and more publicly visible, the need to look good wherever we are has increased. Businesses that offer services which minimise dwell time and maximise consistency across their stores are tapping into the needs of busy women.
We saw further investment in the sector in January, when private equity firm LDC invested £16m in Rush, a hair and beauty brand that operates 85 salons primarily in London and the south-east. The business plans to almost double its salon count over the next four years and expand to other parts of the country, highlighting the huge opportunities for fast growth in this market.
There is also a great deal of potential for digital transformation in the industry. Indeed many salon appointments are still made by telephone. Digital-first businesses like Treatwell and Blow Ltd are beginning to disrupt the sector, but there are many more opportunities for brands to harness technology and bring beauty services into the 21st century.
Having returned from New York, I can see that there is plenty of scope for growth and innovation in the beauty sector on both sides of the Atlantic. Those businesses that can bring together high quality, convenient services with a cleverly marketed proposition are most likely to thrive in today’s fast evolving beauty market.