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The beauty and wellness industry saw a slowdown last year. Revenue growth dropped to just 5%, leaving some business owners unsure of what to expect and how to proceed.
Compounding the uncertainty are evolving and changing consumer habits (instant digital access) and recent watershed moments capturing everyone’s attention (hello, AI). Business owners must adapt – and fast. In this shifting climate of beauty industry trends, identifying the greatest areas of growth is now more important than ever.
To help business owners and managers understand the beauty industry trends fueling the greatest growth, Zenoti has released the 2024 Beauty and Wellness Benchmark Report. This compilation of benchmarks and key findings is the result of Zenoti analyzing data for salons, barbershops, nail salons, medical spas, membership-based spas, non-membership spas, and waxing centers.
As the industry leader – with 13 years and nearly 30,000 businesses – Zenoti is uniquely positioned to deliver these insights, all focused on helping every beauty and wellness business thrive and grow.
The following is your peek into the report, featuring a handful of beauty industry trends – with related tactics you can apply right away.
All benchmark metrics found in the 2024 Beauty and Wellness Benchmark Report tie back to the most significant KPI for any business: annual revenue per location. Throughout the report, you’ll find three benchmark levels of performance:
Top earners: The top 10% in revenue collection for each business category
High achievers: The top 25%
Average: The average-earning business
The report offers insight into how your business compares to the rest of the industry across eight key metrics including online booking rate, guest spend per visit, and in-person upsell revenue. It helps you understand the latest trends in the beauty industry.
Businesses with a focus on online booking tend to earn more than their competitors. The top-earning barbershops, for instance, have 76% of their appointments booked online by clients. The next-highest online booking rates are for top-earning salons (68%) and nail salons (65%). See how your business compares for the online booking metric on page 14 of the report.
Online booking is no longer a nice-to-have – it’s a necessity. A Zenoti consumer survey from 2023 offered insight into top beauty trends like this one: a whopping 80% of beauty and wellness customers want to book their appointments online. Why? It's simple, convenient, and hassle-free.
Customers who’ve become used to buying everything from groceries to concert tickets on their phone expect the same convenience for scheduling their hair appointments and spa visits.
One of the tools contributing to this growth is Reserve with Google, which lets customers book appointments with your business directly from your listing in Google search results and Google Maps, and your Google business profiles.
Here’s why appointment-based businesses should activate Reserve with Google. The search engine commands an astonishing 91% of global market share. When shoppers are ready to buy, the majority search with Google. It’s no surprise, then, that integrating Reserve with Google into a business’s online booking is a game-changer for customer acquisition too.
– 18% of bookings via Google came from new clients last year. This is a clear beauty industry trend that can’t be overlooked – the opportunity to gain new customers without the typical acquisition costs.
Pulse check: Do you currently offer “Book Online” options via Reserve with Google? If the answer is “no,” consider switching to a platform with that functionality.
If you follow beauty retail trends, you already know the value of product sales to your bottom line. In-person upselling is more than just a tactic to boost revenue, though. Done right, it can enrich customer experiences, too.
What counts as an in-person upsell? As defined in the report, any purchases of additional services, retail products, or gift cards once the customer is in your shop or center. The key is to see each add-on or upsell as a way to enhance your clients' experience.
Although the data above refers to in-personal upselling, any opportunity to increase ticket value is important. As such, the key to maximizing upsells is to also integrate them into your online offerings. Guests booking online should also see an array of related services to buy.
As an example, a guest using online booking to schedule a facial, can choose add-ons like aromatherapy or a serum finish. This boosts their ticket size before they walk through your doors. Just as important, knowing the related services to offer shows your mastery of current beauty trends and understanding of what customers want.
While software can help drive upsells before guests come in for their appointments, encourage your staff to continue doing what they’re trained to do: have organic upsell conversations with customers as part of the service. A guest is more likely to buy a serum from the aesthetician who treats her skin than get one off the shelf at her neighborhood Ulta.
Fast fact: One in three customers will always or usually buy a recommended product, notes the Zenoti 2023 consumer survey of beauty industry trends.
Gift cards brought in about 8% of total industry revenue in 2023, but online gift card sales take the top spot for new revenue growth, up 16% across the entire industry. In terms of additional sales – and the potential for additional new clients – that's a beauty industry trend worth noting.
Here are additional reasons to do more with gift cards than you are currently.
In summary, offering digital gift cards ranks high on our list of beauty industry trends to act on.
Related reading: How to grow medspa revenue with gift cards, memberships, and packages
The subscription economy has penetrated the beauty and wellness industry. Memberships have become the steadiest source of growth, with an impressive 8% increase in membership collections in 2023. The benchmark report notes that at least 1 out of every 4 dollars will be spent on memberships in 2024.
One of the main catalysts driving this shift: changing customer expectations. Today’s customers seek connection, experiences, and personalized service, and membership models cater to their desire for predictability, exclusivity, and a sense of community.
To illustrate the value of memberships in beauty and wellness, here’s a look at the business categories that saw above-average revenue growth in 2023 (the average being 5%).
Happened to spot what these business types have in common? Memberships are the most notable growth area for them all: nail salons, waxing centers, and spas.
If you’re thinking about a membership model for your business, now’s the time to give it serious consideration. The benefits: Memberships provide predictable, recurring revenue. They foster customer loyalty. They can even improve the valuation of your business – which matters if you plan to sell or franchise down the road.
The key to a successful membership program? Keep it simple. Make sure your membership program is digital, automated, and easy for staff and customers to understand.
Beyond that, give members your best discounts and early access to new products. Take it up a notch with open houses and special events to appreciate your members’ business and celebrate their loyalty.
The last in our list of major beauty industry trends relates to the growth of package sales. The following business types are selling more service bundles and service-plus-product pairings.
While package sales might represent a small portion of a membership-based spa’s total revenue, the dramatic uptick (85% in 2023) is among the health and beauty trends worth keying into.
Thoughtfully curated packages give customers an immersive experience, and your business gets the opportunity to wow them with every service in those bundles. Sell a graduation head-to-toe package – like a cut and style, facial, and mani-pedi – to give soon-to-be grads a complete experience. Such packages make great gifts, too, with the new graduate returning to spend discretionary dollars at your business for a good long while.
Pro tip: Think of packages as a guest’s steppingstone to a membership. Guests who try a service bundle may buy into the idea of consistent self-care and try a membership – especially because it offers a better value than one-off packages.
The 2024 Beauty and Wellness Benchmark Report is a must-read for a look at the most notable current beauty industry trends. The report provides an overview of key growth areas and practical takeaways following a slower period than past years.
In the report, you’ll find essential benchmark data for beauty and wellness businesses. See how your business compares for metrics like revenue per center, online booking rate, and utilization.
The report also covers the importance of membership models, digital touchpoints, upselling, gift card sales, and other revenue drivers. It saves you the trouble of combing through beauty industry articles to know which growth levers to pull for your salon, spa, medical spa, or barbershop.
Of course, any data is only as good as its source. Here’s why Zenoti is uniquely qualified to publish the report: Creating software designed specifically for beauty and wellness businesses, Zenoti has 13 years of deep expertise and the industry’s largest data footprint. It helps power nearly 30,000 businesses across the globe.
Don’t miss out on the latest trends in the beauty industry and up-to-date benchmark data.
Get your full copy of the report.
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