The Salon Business Crystal Ball – Predictions for 2014

“My interest is in the future because I am going to spend the rest of my life there.” C.F. Kettering

crystal ballJokes aside, there WILL be great shifts in the hair & beauty industry this year. Some will be brought about by technology (mobile apps, for example), some will be caused by changes in consumer behaviour, others by the gathering increase in disposable income, and still more by competition.

As a keen observer of, and supplier to, the hair & beauty industry for a decade (yep, Worldwide Salon Marketing is ten years old this year), I’m probably as qualified as any to dust off my crystal ball and gaze into the future.

Be aware: assuming you’ll be able to run your business in 2014 the same way you did it in 2013 is a recipe for failure. The world IS changing. Here are my predictions for the year ahead.

Technology

child covering eyesBehaving like a two-year-old, holding your hand over your eyes and declaring “You can’t see me!” isn’t going to cut it in 2014. Sure, technology IS confusing, headache-inducing. Only those business owners who embrace it’s efficiencies and the opportunities technology offers will prosper this year. No, that doesn’t mean you have to become a geek, or a web developer, or a programmer. But at minimum, you must acknowledge the need, and hire the right people to get things done for you.
Back when cars had carburettors, distributor leads and zero computers, I could tear down the engine of my old 1951 Riley and put it back together again. These days, they’re so complex I’d be an idiot to even attempt it. But I willingly pay an expert to make sure my Range Rover is always in peak condition.

For the same reasons, salon owners all over the world pay WSM to host, maintain and fine-tune their mobile apps, websites, search-engine-optimization and more. (Find out more about that here.)

Prediction: mobile – that means smart-phones and tablets like iPads – will completely swamp ‘old-fashioned’ desktop and laptop computing in 2014. Those salons which embrace mobile, find out how to use it, and exploit it will leave behind those who ignore it, hoping it’ll go away. It won’t.

Finding your Niche
nicheThe days of the ‘one-stop’ shop, all-things-to-all-people salons are over. The vast majority of hair & beauty salons are ‘me-too’ operations that provide pretty much the same kind of services and products as a hundred competitors within a ten-minute drive. Hair salons do hair. Beauty salons do facials, waxing, spray tanning. And all of these same-same businesses will pretty much take anybody with a pulse.
The way forward to prosperity in 2014 is niche. Being ‘the’ one salon in your town/suburb that becomes known as the go-to place for X, or Y, or Z. Or the salon that certain ‘types’ of people prefer. There is absolutely zero marketplace advantage in being ‘average’. You must research, discover, invent if necessary, products and services that are unique to your business, that cannot be found anywhere else. And/or, you must find a way to attract and exploit niche demographic and psycographic markets, and learn how to specialize in them, become known as ‘the’ place to go for that kind of person/group of people.

And one of the biggest drivers of this change is staring you in the face; almost nothing you currently sell cannot now be found faster and delivered cheaper through a simple online search.

Prediction: By the end of 2014, salons relying on retail sales of commonly-available products for their ‘cream’ will be largely out of business.

Read more about niche marketing here. And here. And here.

Products available online:

StrawberryNETThere are still (a few) product suppliers who refuse to sell their lotions and potions, machinery and consumables online. But their number is dwindling rapidly. It’s inevitable that more and more will face the fact that if they really want volume, they must buckle to the internet trend. Forums populated by hair & beauty professionals are frequently spiked with outrage at such-and-such ‘salon exclusive’ product suddenly turning up on www.strawberrynet.com.
Or a new DIY home IPL kit (‘Oh…what next!!!!’) or the latest, greatest hair straightening system, and a hundred others.

No, nothing is sacred any more. And less and less will be sacred a year from now. Face up to it. Refer to the paragraph on niche marketing above. Simply because virtually nothing you sell won’t be available online cheaper and faster forces the issue; you must find more ways to sell whatever it is you sell in a competitive vacuum.

Prediction:

Opportunity from failing competitors
closing downSad, but true; more hair and beauty businesses will close their doors this year than ever before. The widely-accepted industry ‘churn’ rate is about 20%, i.e., 20% of existing businesses will close, replaced by another 20% opening up with hopes and dreams.

On the face of it, your competitor closing her doors is good news (for you). But few take more than passive interest, doing little more to take advantage of this than merely hoping some of her customers will come your way. This year, the winners will become much more aggressive in their efforts to grab market share, not only by actively seeking to damage a competitor’s business, but by being ready to pounce on that suddenly-available opportunity.

Which means this: database is King. Salon owners who recognise the immense (marketing) value of a well-maintained, clean and accurate database of clients and their contact details – all of them – will be in a position to not only take maximum advantage of their own client list, but also know what to look for when a competitor closes. And pick up that competitor’s database for peanuts in the dollar.

(See Technology above.)

Prediction: For years, farmers have been forced to get bigger, by absorbing their neighbours, to survive. That’s just economies of scale. The same will happen in the hair & beauty industry.

Cutting costs
cost cutting
It’s tempting, when things are going well, not to worry too much about ‘little’ costs. A few dollars here or there. But 2014 will require more attention. Electricity prices aren’t going down. Neither are staff costs. But the winners this year will pay attention to the little things. Getting a better deal on phone and internet supply. It’s easier than you think. Prices have come down dramatically, thanks to competition, since you negotiated your last deal. Product suppliers will – if you push them – give you sample products you can use as deal sweeteners. Newspaper publishers are struggling to sell ad space. (One of our members got a brilliant deal when a local newspaper auctioned a series of spaces they couldn’t sell.)

Ruthless Management
balls
Our business is a people business. By its very nature, it often attracts caring and sharing ‘people-pleasers’ who’ll bend over backwards not to upset anyone, clients and staff especially. Which was fine back in the days when clients wouldn’t dream of being disloyal and going elsewhere, when staff signed up to a career in the business.

Those days are long gone. Daily deal websites have turned millions of people into bottom-feeding deal hunters, who’ll descent like a swarm of locusts at the slightest hint of a bargain, strip the paddock bare and move on just as quickly. Even without the daily deal scourge, instant availability of products and services at the touch of a browser button has reduced concentration spans to that of a mosquito. People are ruder, more discourteous, more demanding, less forgiving, less patient.

Staff – particularly the young ones – no longer think in terms of a job for years. Very few think more than a few months ahead. Again, thanks to technology, competition and social media, your 20 year old staff member can find another job on the other side of the planet faster, and get their more cheaply, than most of us could have dreamed of even ten years ago.

Prediction:

The successful salon owner in 2014 will become more ruthless, less forgiving, more focused on figures, more stringent with staff demands, less willing to be trodden on by clients. She will demand deposits to secure long appointments. She will insist on staff being bound by a simple, carefully-worded Policies & Procedures “This is how we do things here” document. She will, in effect, be swallowing a handful of ‘harden-up’ pills as you’re reading this, determined that 2014 will not end – like so many years before – with her declaring “Next year, things are going to be different around here.”

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About The Author

Greg Milner

Greg Milner, CEO & Founder, Worldwide Salon Marketing. Greg is a writer, marketing consultant, direct response advertising expert and former TV producer. Since founding WSM in 2004, he's coached and guided more than 4,000 salons & spas all over the world in all aspects of marketing, both online and offline. The tools and templates he and his team have developed are used by salons & spas on every continent. He is the author of the industry-standard direct response marketing manual, Simple Salon Marketing, and the e-book Rich Salon Owner.