US Professional Haircare Industry Market Research

Author: Mary Schwab

Stakeholder: Ludwig Ronald (Business owner)

Expressing oneself through various hair styles has become an extremely popular trend over the past few decades.  From copying celebrity cuts (such as “The Rachel” from Friends) or dying your hair in all hues of the rainbow, consumers are using their hair as a form of individualistic expression.  In 2019 alone, 56.94 million Americans had 4 or more haircuts, which represents a significant market opportunity for stylist and salons. 

In 2020, revenue in the US Hair Care segment is expected to amount to $13,011.4m.  Analysts indicate that hair care, and hair coloring in particular, presents the biggest growth opportunity across beauty and personal care.

Looking at the Chicago market specifically, Google Search Trends show that in the past year “hair color” accounted for 62% of hair related searches, while “haircut” accounted for 38% of hair related searches.  This shows the desire and need of Chicago consumers to find a talented and trusted colorist. Overall, consumers in urban areas spend 3 times as much on hair care products as those in rural areas.

There are over 80,000 beauty salons in the US today.  In the past 5 years, the industry has benefited from a declining unemployment rate and rising per capita disposable income.  If the economy remains strong, the professional hair care industry is expected to continue to grow.  This means that salons, especially those that are individually owned and operated, will likely face more intense competition.  

In a SquareUp survey of 1,800 US consumers, they found that consumers rely heavily on personal recommendations and online reviews when finding new hair salons and stylists.  Almost 50% of the respondents said they trust other customers’ reviews more than they trust reviews written by professionals. The biggest group of consumers (28%) said that Google Reviews is their favorite source for online reviews, which is likely due to the fact that Google is the first step for many consumers in the online discovery process.  After Google Reviews, the next preferred online review sites are Facebook and Yelp.  

The professional hair care industry is booming, and is expected to continue to grow if the economy remains strong.  This increase in consumer sentiment has increased demand for additional services over standard haircuts, such as hair modification treatments (e.g. straightening procedures, perms and relaxing treatments). As a result, consumers have favored professional salon products and services, such as hair coloring, over less costly alternatives sold at drugstores and supermarkets.  There is an especially big opportunity for master or expert colorists as both men and women are interested in updating their look or expressing themselves via their hairstyles.

References:

https://www.sbdcnet.org/small-business-research-reports/beauty-salon

https://squareup.com/us/en/townsquare/how-consumers-look-for-and-discover-salons

https://www.statista.com/outlook/70040000/109/hair-care/united-states

https://www.nielsen.com/wp-content/uploads/sites/3/2019/04/the-future-of-beauty-report.pdf

https://www.nielsen.com/in/en/insights/report/2019/the-beauty-market-is-letting-its-hair-down/

https://www.ibisworld.com/united-states/market-research-reports/hair-salons-industry/