The average client spend for hair and beauty in both New Zealand and Australia is constantly increasing, and reached an all-time high following lockdown restrictions in Q2 2020, which remained elevated in Q4 2020.
We delved deep into the data to find out what’s behind the increasing client spend, and how you can use this information to increase client spend for your own salon, spa or clinic.
What’s client spend?
Client spend is the average spend per client on services and retail. To calculate the average client spend for the hair and beauty industries in New Zealand and Australia, we used Kitomba Benchmark, a feature of Kitomba Salon and Spa Software that compiles and compares anonymous data from the industry.
What’s the average client spend for the hair industry?
For the Australian hair industry, the average client spend has shown steady year on year growth of around 4%. However 2020’s year on year growth was 6%. Average client spend in Q4 2020 was $142 per client, compared to $130 in Q4 2019.
Given that lockdown reduced the number and frequency of client visits, it’s likely clients spent more on services and retail each time they visited. Comparing Q4 from 2019 to 2020, there was a 5% drop in service revenue but a 4% increase in retail, mainly due to lockdown restrictions.
Client spend for the Australian hair industry
For the New Zealand hair industry, overall revenue in Q4 2020 increased by 3% compared to Q4 2019. This was due to a combination of increased services and retail spend. Similar to Australia, average client spend has shown steady year on year growth since 2017, but has a notable 8% increase in 2020.
Lockdown created a pent up demand in Q2 2020, meaning clients spent more each time they visited. This dropped slightly in Q3 2020 due to clients settling back into a normal routine, but was still up from Q3 2019. Client spend continued to rise in Q4, likely due to the busy Christmas period. Average client spend in Q4 2020 was $113 per client, up 5% from Q4 2019.
Clients bought the same amount of retail items, but the average retail item price increased in Q4 2020 when compared with previous quarters, causing the average basket value to increase.
Client spend for the New Zealand hair industry
What’s the average client spend for the beauty industry?
Year on year, average client spend for the Australian beauty industry has steadily grown around 5-7% between Q3 2017 and Q3 2019, but has kicked up sharply since lockdown. Year on year growth in 2020 was 8%.
Average client spend was $122.45 in Q4 2020, compared to $106.54 in Q4 2019.
The increase was initially due to the limited supply and pent up demand following lockdown resulting in more clients having multiple treatments and purchasing more retail within each visit, driving up average spend per visit. Average client spend settled after the post lockdown boom, but has remained elevated into Q4, beyond the initial post lockdown boom of Q2.
Client spend for the Australian beauty industry
For the New Zealand beauty industry, average spend per client has slowly grown about 3% year on year between Q3 2017 and Q3 2019, but kicked up sharply in 2020, with 9% year on year growth between 2019 and 2020.
This is likely due to the limited supply and pent up demand following lockdowns, leading to an increased spend per visit when salons opened up again.
Average retail spend/basket value was $114 in Q4 2020, which is almost double that of the New Zealand hair industry, which sits at around $50-$60. The average retail item price didn’t change, but clients bought more retail items per visit on average, increasing retail spend.
Client spend for the New Zealand beauty industry
So, what can we learn from this data?
Average client spend for the hair and beauty industry saw high year on year growth in 2020 compared to previous years. Client spend reached an all-time high in Q2 2020 and remained elevated in Q4, despite lockdown restrictions.
The hair and beauty industries in New Zealand and Australian experienced pent-up demand for services and retail in 2020 after lockdowns, and retail has helped to keep revenue high, which highlights the importance of selling retail to clients.
While the increase in retail spend could be due to Christmas, the data shows that people are willing to spend money, so use the opportunity to up your prices and sell more retail.
Tips for increasing your average client spend
Here are our top tips for increasing your average client spend:
Upsell retail to clients
Make sure you’re upselling retail to your client base. Educate your clients about how they can maintain their hair or skin between visits with you and what products will help them to maintain their look and achieve the results they’re looking for.
Make your retail products accessible and displayed in-store, and ensure your team are making recommendations based on the needs of your clients.
You can also set retail sales targets for your team members in Kitomba and offer incentives, such as commission, for reaching their targets. Read how to set targets for your team to find out more.
For tips on how to boost your retail sales, watch our Facebook Live with Mark Ipaviz from Ozdare below:
Open an online store
Lockdown restrictions have caused many hair and beauty businesses to start selling retail online. Our partner Salon Pay enables you to create an online store for free. Find out more about our partnership here.
Once you create an online store you can add the link to your website and your Kitomba Online Booking site so your clients can buy retail easily when booking their next appointment online.
Increase your prices
It’s natural for prices to increase over time, so make sure you revisit your pricing. Take inflation into account, and ensure your pricing is aligned with the industry.
How this data was collected
The data outlined in this article was sourced from Kitomba Benchmark, which is a feature of Kitomba Salon and Spa Software that compiles and compares anonymous data from the hair and beauty industry. Data from Q4 2017 and Q4 2020 was analysed.
Permission to use this content
When using information from this article in other publications please include a reference link to this article in attribution of the original source.
If you have any questions, leave a comment below or contact us.
Read more articles like this: