store survey
Looking Back
How does your beauty store compare with the results from our 2003 reader survey?
with other specialty retailers, 2003 was a tough year for numerous beauty stores—with the slow economy cited by beauty store owners and managers in our latest reader survey as the No. 1 challenge their businesses encountered this past year. However, perhaps most surprising is that a significant number of stores didn’t just survive, but also grew their operations and improved their profit margins presumably by operating smarter than they had been—and, hopefully, just in time for the economy to heat up again. s As a whole, beauty stores are doing well, and by far, they’re still the leading retailers of professional beauty products—and will no doubt continue to be. Responses from our latest reader survey were collected in August and September 2003. Both surveys were mailed with Beauty Store Business to our entire list of subscribers, and we offered owners and managers who completed the two-page, confidential form a chance to win $1,000. We received many responses this year—as we did in our 2001 reader survey— permitting us to extract samples that are representative of the wide variety of beauty stores that our publication serves, including high-end, open-to-the-public salon stores, beauty stores without salons and professional-only stores. We’re confident that the highlighted statistics presented paint an accurate picture of beauty store businesses across the country. In the macro picture, it’s still Sally Beauty Supply, the Wal-Mart of the beauty store sector, at the top of the food chain followed by everybody else. However, there’s solid growth in the number of salon stores and an emerging trend of general-market stores crossing over to offer their customers ethnic/multicultural products. Take a good, hard look and see how you measure up. More importantly, what can you learn to better your operation?
Beauty Store Business 2004 Directory
January 2004
store survey
Welcome to the Wonderful World of Beauty Stores
The basics of the beauty store sector are pretty much the same as they were when we last examined readers’ responses in 2001. What’s the top type of beauty store? Businesses with a general-market focus sans salon services. A majority of open-to-the-public beauty stores have now been in business 10 years or more. That figure grows even higher for professional-only stores in business 10 years or more—those full-service distributorships that haven’t been gobbled up yet by megadistributorships like Beauty Systems Group, Sally Beauty Co.’s fullservice division, or Beauty Alliance. Open-to-the-public stores typically have only one location, and that remained true in 2003 with 74% reporting one site. That figure was 73% in 2001. A majority of open-to-the-public stores continue to have 1,000- to 2,500-square-foot stores.
PROFESSIONAL-ONLY
I Love Manufacturers That Provide...
(Ranked)
OPEN-TO-THE-PUBLIC
2003
2001
1. Samples 2. Sales Brochures/ Sheets 3. Shelf-Talkers 4. Testers 5. Counter Displays 6. Floor Displays
1. Sales Brochures/ Sheets 2. Samples 3. Counter Displays 4. Testers 5. Floor Displays 6. Shelf-Talkers OPEN-TO-THE-PUBLIC
I Love Manufacturers That Provide...*
(Ranked)
1. Samples 2. Testers 3. Counter Displays 4. Shelf-Talkers 5. Floor Displays
*Note: The exact same order as in 2001.
When I Advertise, I Use...
(Ranked)
1. In-Store Flyers and Bag Stuffers 2. Phone Directories 3. Direct Mail 4. Newspapers/Magazines 5. Web Sites 6. Radio 7. Cable TV 8. Billboards
Beauty Store Business 2004 Directory
January 2004
store survey
Show Me the Money
OK, together, let’s all ask: What lackluster economy? Statistically, as an overall group, opento-the-public stores did better in 2003 than two years ago, according to the following statistics from this latest reader survey and our 2001 data: The average product sales per month increased by 9% since 2001; 27% of stores reported annual product sales of $400,000 or more— that’s 5% more than in 2001; 40% reported $300,000 or more—7% more than in 2001. On the buying side of the equation, 42% say that between $50,000 and $199,999 is spent annually on products.
And the Survey Also Says...
Open-To-The-Public Average Product Sales Per Month: $26,681 Open-To-The-Public Average Product Buying Per Quarter: $57,168 Open-To-The-Public Average Margin: 40%
Report From 2% to 5% of Gross Revenue, 36% Report Less Than 2%
Open-To-The-Public Ad Expenditures: 39%
OPEN-TO-THE-PUBLIC
An Up-And-Down Year
(Gross revenue, % of Respondents)
2003
2001
Same Slightly Lower Significantly Lower Slightly Higher (Less Than $25,000) $25,000 to $50,000 Higher More Than $50,000 Higher No Answer
10% 28% 14% 27% 8% 9% 4%
9% 11% 10% 43% 13% 8% 6%
OPEN-TO-THE-PUBLIC
Ringing Up Higher Tickets
(Average Sale Per Consumer, % of Respondents)
2003
2001
Under $7 $7 To $15 $15.01 to $25 $25.01 or More No Answer
2% 25% 30% 38% 5%
3% 29% 43% 24% 1%
Beauty Store Business 2004 Directory
January 2004
store survey
We’re All About Those Products
Products make our world go around— and the hotter, the better. So what’s the hottest product category? The answer is add-on hair, wigs and extensions, according to open-to-the-public beauty store respondents. Hair color is the hottest product category, according to professional-only beauty store respondents. Irons is another fastgrowing product category in both arenas. As for leading categories, it’s still all about hair. Hair care fills the top three leading categories in each subsector. Skin care follows at No. 4 in both places. On the open-to-the-public side, cosmetics is tied at No. 5 with nail care. Cosmetics was at No. 8 in 2001.
OPEN-TO-THE-PUBLIC
Leading Categories
(Ranked)
2003
1. Shampoos, Conditioners & Treatments 2. Hair Color 3. Styling Aids 4. Skin Care 5. (Tie) Nail Care; Cosmetics 7. Brushes & Combs 8. Relaxers & Perms 9. Irons 10. Add-Ons, Wigs & Extensions 11. Dryers 12. Clippers/Trimmers
2001
1. (Tie) Shampoos, Conditioners & Treatments; Hair Color 3. Nail Care 4. (Tie) Texture/Perms; Relaxers 6. Appliances 7. Add-Ons, Wigs & Extensions 8. Cosmetics
OPEN-TO-THE-PUBLIC
Barn Burners
(Fastest-Growing Categories In Sales Volume Past Year, Ranked)
1. Add-Ons, Wigs & Extensions 2. Hair Color 3. Irons
PROFESSIONAL-ONLY
Leading Categories
(Ranked)
2003
2001
1. (Tie) Shampoos, Conditioners & Treatments; Hair Color 3. (Tie) Texture/Perms; Nail Care 5. Appliances 6. Sundries
PROFESSIONAL-ONLY
Barn Burners
(Fastest-Growing Categories In Sales Volume Past Year, Ranked)
1. Hair Color 2. Irons 3. Shampoos, Conditioners & Treatments
1. Shampoos, Conditioners & Treatments 2. Hair Color 3. Styling Aids 4. (Tie) Skin Care; Nail Care 6. Irons 7. (Tie) Sundries; Shears/Scissors; Relaxers & Perms 10. (Tie) Dryers; Brushes & Combs; Bath & Body
Beauty Store Business 2004 Directory
January 2004
store survey
Selling to Pros
When it comes to selling to beauty professionals, professional-only stores always have the competitive edge on open-to-the-public stores. However, open-to-the-public stores and beauty professionals aren’t necessarily strangers. Fifty-five percent of open-to-thepublic stores say they stock special products and/or offer special prices for pros. Seventy percent said they did so in 2001. In 2003, 23% of open-to-the-public stores reported that from 1% to 10% of their total sales were to pros; 20% said 26% to 50% of their total sales were to pros; for 19%, pros accounted for 11% to 25% of their total sales; while 18% checked off an “insignificant” percentage for pro sales.
The Power of Pro-Only Stores
(Average Sale to Pros, % of Respondents)
Open-ToPro-Only The-Public $25 Or Less . . . . . . . . . . 8% . . . . . . . . . 30% $25.01 to $35. . . . . . . 10% . . . . . . . . . 21% $35.01 to $50. . . . . . . 35% . . . . . . . . . 20% $50.01 or More . . . . . 35% . . . . . . . . . 19% No Answer . . . . . . . . 12% . . . . . . . . . 10%
OPEN-TO-THE-PUBLIC
Surfing the ’Net
(Times Per Week Online, % of Respondents)
Seven or More
. . . 34%
Zero . . . . . . . . . . . . . 22% Four to Six . . . . . . . . 17% One to Three. . . . . . 16% No Answer. . . . . . . . 11%
OPEN-TO-THE-PUBLIC
Store Web Site?
(% of Respondents)
Yes
25
%
Planned or Under Construction No
17%
54
%
No Answer
4%
January 2004
Beauty Store Business 2004 Directory
store survey
Stores’ Crystal Balls
As for expansion checklists in 2004, both open-to-the-public and professional-only store owners and managers top them with plans to add product categories. The ranked orders of survey responses among both open-to-the-public and professionalonly stores are identical to our 2001 data.
OPEN-TO-THE-PUBLIC
PROFESSIONAL-ONLY
Expansion Plans in 2004
(Ranked)
Expansion Plans in 2004
(Ranked)
1. Add Product Categories 2. No Expansion Plans 3. Add Additional Store(s) 4. Increase Size of Store(s) 5. Add Salon(s)
1. Add Product Categories 2. Add Additional Store(s) 3. No Expansion Plans 4. Increase Size of Store(s)
The Winner Is...
Everyone who returned a completed Beauty Store Business reader survey before the deadline was eligible for our $1,000 prize drawing. The winner is Janell Hamlet, branch manager of the West Coast Beauty Supply professional-only store in Bakersfield, California. It’s the first time Hamlet, who has been the branch manager for five years, has ever won a cash-prize contest. Her branch, which is in central Bakersfield, was the No. 1 store in Matrix sales volume for 2003 among all West Coast stores. Hamlet is a Bakersfield native who’s a licensed cosmetologist—she graduated from a local beauty school—and her grandmother had a salon in the area. She has been with West Coast since 1989 and started at counter sales before becoming a distributor salon consultant. That’s when she first saw Beauty Store Business and became a subscriber. We sincerely thank those who took the time to tell us about their beauty store businesses, and we hope that you’ll find these results valuable. Let us know if there are other types of data you would like us to collect or if you see ways that we can improve our survey. Have a great 2004! BSB
Beauty Store Business 2004 Directory
January 2004