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Personal care products and services are a hot commodity. Category spending increased 12.3% in 2022, beating even apparel, says the most recent U.S. Bureau of Labor Statistics consumer expenditure report. Fast forward to the present day – the beauty and personal care market is expected to generate a whopping USD $100 billion in the United States this year.
What’s driving all the spending in the personal care sector? A myriad of consumer choices and shopping habits. Let’s look at a few: Teens with 5-step skincare routines. Millennials seeking medspa treatments. Virtual tryouts and online purchases of makeup. Spa retreats in posh destinations, part of the wellness tourism trend.
We’re not even scratching the surface.
Just how much does all that spending add up to? A global total of USD $646 billion on beauty and personal care.
Not surprisingly, the market for related products is also strong and expected to grow 4.64%. The burgeoning demand for personal care services means businesses like barbershops and beauty salons are adding jobs five times faster than the average business.
It’s clear the personal care industry is enjoying its moment in the sun.
For entrepreneurs paying attention, there’s a tappable market with a presumably bright and expansive future. But to make the most of it, you need to start with what’s working right now.
Here’s a recap of trends shaping the future of personal care to help entrepreneurs find their niche in a rapidly expanding market.
Within the personal care sector, U.S. demand is highest for these products: skincare, haircare, and color cosmetics. Today’s customers favor clean formulations and companies that care about the environment. They seek personalized experiences – and data-driven, AI-focused businesses are best equipped to provide that level of personalization.
No longer just a fad, the holistic wellness trend is gaining ground in the personal care industry. Providers are increasingly combining practices and products to harmonize body, mind, and spirit.
What might this trend mean to spas and salons? A broader selection of services that includes stress-relief therapies, yoga sessions, and nutritional counseling to round out aesthetic procedures. Some spas offer custom aromatherapy blends and guided meditation during facials, taking personal care from skin-deep to soulful.
To capitalize on this approach, businesses with a core offering often add related services. As an example, the California-based medspa B12 Love adds naturopathic consultations to their core offering of the nutrient injections and IV drips that give the company its name. Their doctors specialize in integrative and root cause medicine, reviewing factors like diet, stress, and sleep in addition to a client’s health challenges and medical history.
Also catering to the whole person are spa retreats that combine special food and beverage menus, body treatments, movement sessions, and eco tours. The creators of such retreats recognize the power of shared spaces for people to connect with themselves and others.
It should come as no surprise that the internet is the top destination for shoppers of personal care products. Online shopping offers an unmatched convenience and accessibility, with products and purchases available on the customer’s time. If you’ve shopped for protein powder online and had a jar delivered the very next day, you know it beats visiting three different health food stores to procure a powder you like.
Digital platforms also offer an unparalleled opportunity to connect with customers, share your shop’s story, and sell branded products. The pandemic pushed the e-commerce boom to new levels and the demand for online buying hasn’t abated, even if shoppers have returned to stores in droves.
Today’s customers want self-service digital access. Beauty and wellness businesses that give it to them pull in the most revenue. That’s just one of a handful of personal care industry trends you’ll find in the 2024 Beauty and Wellness Benchmark Report from Zenoti.
What exactly does self-serve digital access mean for customers? Mainly, being able to book appointments and shop online for products, services, and gift cards, through your website and branded mobile app.
Finally, social media is another powerful tool in any business’s digital profile, necessary to create and maintain a strong brand presence. Use social media channels – especially Instagram for most beauty and wellness brands – to engage with customers, answer inquiries, and drive bookings.
How do you stand out in a market saturated with personal care products? One path to take is the high road: Choose clean ingredients, source them ethically, and prioritize sustainability for manufacturing and packaging. Remember to keep innovation – in your products, your packaging, your promotions – front and center to aim for a greater share of the personal care market.
In the beauty and wellness space, innovation starts with understanding personal care trends and thinking deeply about your customers and ways to make their beauty routines easier, faster, or more enjoyable.
Take a product as basic as cuticle oil. If it’s packaged in a bottle with an eye dropper, it isn’t travel-friendly because it might spill. A roll-on bottle is spill-proof – but The W Nail Bar took it a step further by packaging cuticle oil innovatively. Their product looks and works like a highlighter pen. With oil this portable and easy to apply, improving nail health is a breeze. Giving your nails some TLC can happen while you’re riding the train to work or watching TV.
Innovation can even be as simple as retooling customer perception of existing products, like the award-winning Spa Trouvé. They suggest a 3-item bundle to all first-time customers: sunscreen, cleanser, and antioxidant. Positioned as the recommended bare minimum for skin care, that bundle is flying off the shelves, what with a catchy name like Trouvé Trifecta adding to the appeal.
Which personal care industry trends are driving revenue? Check the latest beauty and wellness benchmark report from Zenoti.
Spreading brand awareness and building customer loyalty doesn’t happen overnight. It often takes businesses a few years to gain sustainable traction by giving customers the excellent results they seek in a warm, inviting space.
Beyond that basic premise, beauty and wellness businesses rely on membership programs, loyalty points, special perks, and targeted promotions to build and retain their customer base.
Here we’ll focus on membership programs due to their current growth and revenue potential.
As detailed in the 2024 industry benchmark report from Zenoti, the personal care industry is seeing steady revenue growth from membership revenue models. An analysis of 2023 data for salons, spas, and medical spas, the report includes these key findings on memberships:
With these points in mind, consider implementing a digital membership program at your beauty and wellness business. Digital programs help you centralize your membership (and other) operations, offering consistency across all your locations for members to enjoy.
Truly care for your clients to earn their loyalty for life.
B12 Love, a nutrient drip medspa, uses Zenoti software to run a membership program with multiple tiers and payment options. While technology helps the team work more efficiently, they bring a hands-on approach to customer care.
Here’s what owner Dr. Shannon Wood-Gallegos says about going the extra mile: “If you become a member at one of our facilities, we’re going to make sure you’re very well taken care of. We have a customer service specialist check in with members who haven’t visited in a few months. I know that’s different from other people’s models, but I do feel like that’s how we’re going to have lifetime clients.”
Companies that master personalization achieve revenue growth more rapidly than their peers, says a recent McKinsey study. Helping guide personalization in the beauty and personal care industry are additional customer-related findings from that study.
- 67% of buyers want relevant recommendations.
- 66% want personalized messaging.
- 58% want post-purchase follow-ups.
The good news: Software can help with relevant recommendations, personalized messaging, and post-purchase follow-ups. Using data analytics and AI, the Zenoti technology platform addresses the above preferences for businesses in the personal care market.
Remember, personalization is about making each customer feel seen, heard, and appreciated.
Inside the data: Top 5 beauty industry trends for 2024
Finally, here’s the most important tip to keep customers happy: keep staff happy. A nurturing work environment in the personal care industry includes competitive salaries and benefits for staff, and a clear path for advancement. With the basics covered, make sure you give service providers what they need to maximize earnings, and empower them to take charge of their own development.
How can businesses take a staff-first approach? At The W Nail Bar, employees across all 14 locations get a benefits package that includes maternity leave. In a sub-sector still riddled with poor working conditions, credit this paradigm shift to the forward-thinking entrepreneurs who launched The W Nail Bar, Lauren Hunter and Manda Mason.
As part of making happiness a top priority, business owners must be proactive about nurturing company culture. Here’s how B12 Love does it: The medspa closes for an hour every Wednesday to sponsor lunch and learns that give staff room to breathe and connect. Topics include new products and services, with ways to refigure existing services up for discussion as well. “It was a huge leap for us financially to close for an hour,” says Dr. Wood-Gallegos, “but it’s been the best culture experience for our staff, and we’ve had really great success with it so far.”
Another benefit to a strong company culture: It helps you attract and retain great talent in the personal care sector, and ultimately leads to better customer service and business performance.
The personal care industry offers limitless opportunities for beauty and wellness entrepreneurs.
Key trends include a growing focus on holistic wellness, advancements in personalization and digital marketing, and product innovations as a major differentiator. In addition, building customer loyalty through membership programs and prioritizing a healthy work culture help personal care businesses evolve to meet changing consumer demands and staff needs.
So where do we go from here? There's tremendous scope for further exploration of the role of AI and data-driven personalization in revolutionizing the industry.
For more personal care market trends, check out the Zenoti 2024 Beauty and Wellness Benchmark Report. You can see how your business measures up for eight key metrics and get trend-based tactics.
Access more of the latest data, insights, and growth trends for the personal care industry
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