Stylist curling client's hair

Industry insights: the effects of COVID-19 on the hair and beauty industry in Q4 2021

1 Feb 2022 by Kitomba

Reflecting on Q3 2021, we can clearly see that waves of COVID-19 cases and restrictions affected the revenues and operations of hair and beauty businesses in both Australia and New Zealand. While it was a hard quarter for the industry, Q4 2021 saw a surge in spending, making it a great way to end the year. In particular, we saw a rise in average client spend, an increase in revenue through online booking and overall, higher revenues for businesses.

  • Average quarterly revenue for hair salons in Australia in Q4 2021 increased by an impressive 84% compared to Q3 2021. Beauty salons’ average revenue experienced even higher growth with an increase of 112% compared to the previous quarter.
  • In New Zealand, the average quarterly revenue for hair salons in Q4 2021 returned to the pre-pandemic levels. When compared to Q3 2021, it increased sharply by 17-18%. In the beauty industry, beauty salons and clinics saw a sharp increase in revenue by 31-33% in Q4 2021 when compared to the previous quarter.

This data about the hair and beauty industry is compiled based on Kitomba Benchmark, a feature of Kitomba Salon and Spa Software that gathers and compares anonymous data from across the industry. If you’re a Kitomba customer, it is a great way to know where your business stands in relation to others in the industry.

Average quarterly revenue for hair and beauty businesses in Australia

The Christmas period is a crucial time for the hair and beauty industry as historically all key metrics spike and Q4 2021 was no different. Overall revenue for hair salons in Q4 2021 increased by an impressive 84% compared to Q3 2021 due to restrictions directly attributed to COVID-19. In fact, revenue returned to the pre-pandemic levels as seen in Q4 2019 and Q4 2018.

Similar to the hair industry, beauty salons’ average revenue experienced even higher growth with an increase of 112% compared to the previous quarter. It also shows modest year-on-year growth over the past four years, with revenue increasing by 3% over Q4 last year. 

Average quarterly revenue for hair salons in Australia

Average quarterly revenue for hair salons in Australia

Average quarterly revenue for beauty salons in Australia

Average quarterly revenue for beauty salons in Australia

Average quarterly revenue for hair and beauty businesses in New Zealand

Hair and beauty businesses across New Zealand had a significant drop in average quarterly revenue in Q3 2021 due to a nationwide lockdown that started in mid-August. Restrictions were relaxed in mid-September which saw revenue returning to normal levels that closely aligned with pre-pandemic Q4 2019. The exception was Auckland, which stayed in lockdown until mid-December. To get a better picture of the state of the hair and beauty industry in New Zealand, we analysed Auckland’s data with renewed interest.

Average quarterly revenue for hair salons in New Zealand excluding Auckland

Overall, the average quarterly revenue for hair salons in Q4 2021 returned to the pre-pandemic levels and is noted to be similar to Q4 2019 and Q4 2018 and is only slightly lower by 4% than Q4 2020. When compared to Q3 2021, it increased sharply by 18%.

Average quarterly revenue for hair salons in New Zealand excluding Auckland

Average quarterly revenue for hair salons in Auckland

After a four-month lockdown, the average quarterly revenue of hair salons in Auckland in Q4 2021 had a sharp 45% decrease compared to Q4 2020. However, when compared to Q3 2021, it increased by 17%. This can be attributed to coming out of lockdown and the Christmas trading period.

 Average quarterly revenue for hair salons in Auckland

Average quarterly revenue for beauty salons in New Zealand excluding Auckland

This quarter, average revenue for beauty salons across the country (excluding Auckland) has returned to the pre-pandemic levels. Revenue is slightly down by 2% than in Q4 2020 and higher by 3% than in Q4 2019. Revenue in Q3 2021 was significantly affected by a country-wide lockdown and in Q4 we observed a staggering increase by 33%. An interesting figure is that voucher spend again peaked around Christmas time and this quarter it represented 12% of total revenue. 

Average quarterly revenue for beauty salons in New Zealand excluding Auckland

Average quarterly revenue for beauty salons Auckland

As lockdown restrictions were lifted in Auckland, beauty salons and clinics saw a sharp increase in revenue by 31% in Q4 2021 when compared to the previous quarter. Anecdotally, we heard that clients rushed to book appointments as soon as possible, as well as, clients visiting ahead of the Christmas period. It is however noted that when compared to Q4 2020 average quarterly revenue was down by 54%.

Moreover, on average, 22% of a beauty spa or clinic’s revenue is retail spending but in Q4 2021 it was 30% due to a pent up demand for professional retail products that focus on self-care at home.

Average quarterly revenue for beauty salons Auckland

Average client spend for the hair and beauty industry Australia

For the Australian hair industry, the average client spend has shown steady year on year growth of around 4%. However, it peaked in Q4 2021 at $154, compared to $142 in Q4 2020. This number is significantly higher than in New Zealand which in Q4 2021 was $121. 

This is likely because lockdowns across Australia in the previous quarter reduced the number and frequency of client visits, and clients tend to spend more on services and retail each time they visited.

The same trends are observed for the beauty industry in Australia. Average spend per client has slowly grown year on year between Q4 2018 and Q4 2019, but has notably increased since lockdown ended in 2020 and remained elevated in Q4 2021 at $138

This is likely due to the limited supply and pent up demand following lockdown leading to an increased spend per visit when spas and clinics opened, including online orders. 

Average client spend for hair salons in Australia

Average client spend for hair salons in Australia

 

Average client spend for beauty salons in Australia

Average client spend for beauty salons in Australia

Average client spend for the hair and beauty industry New Zealand

In Q4 2021, the average client spend across New Zealand was $117 per client, compared to $110 in Q4 2020. Traditionally, average client spend in Auckland is higher than across the country and in Q4, a dramatic increase was observed after salons reopened after the four-month lockdown. More specifically, the average Auckland client spend in Q4 2021 was $159 per client, which is up 27% from $125 in Q4 2020.

Average client spend for hair salons in New Zealand excluding Auckland

Average client spend for hair salons in New Zealand excluding Auckland

Average client spend for hair salons in Auckland

Average client spend for hair salons in Auckland

Average client spend for beauty salons in New Zealand

In New Zealand’s beauty industry, the average spend per client has slowly grown year on year between Q1 2018 and Q4 2019, but has kicked up sharply since lockdown in 2020 and remained elevated in Q4 2021 at $114

This is likely due to the limited supply and pent up demand following lockdown leading to an increased spend per visit when salons reopened. 

In Auckland, the average client spend is higher than across the rest of the country and in Q4 2021 it was an impressive $197 which is a dramatic increase from $158 in Q4 2020. 

Average client spend for beauty salons in New Zealand excluding Auckland

Average client spend for beauty salons in New Zealand excluding Auckland

Average client spend for beauty salons in Auckland

Average client spend for beauty salons in Auckland

Average online booking revenue at hair and beauty salons in Australia and New Zealand

Revenue from online booking at hair and beauty salons is on the rise across both New Zealand and Australia. This is likely due to the trend and popularity of more people buying goods and services online.

Online booking revenue at hair salons in Australia

For the Australian hair industry, average online booking revenue in Q4 2021 increased by a staggering 72% compared to Q3 2021 and by 19% compared to Q4 2020. Online booking revenue represents 11.5% of the total revenue in Q4 2021 compared to 10% in Q4 2020.

Online booking revenue at hair salons in Australia

Online booking revenue at beauty salons in Australia

For the Australian beauty industry, online booking revenue has been at its highest since 2018 and had a massive increase of 126% in Q4 2021 compared to Q3 2021. It also increased by 8% when compared to Q4 2020. Online booking revenue represents 14% of the total revenue in Q4 2021 compared to 13% in Q4 2020.

Online booking revenue at beauty salons in Australia

Online booking revenue at hair salons in New Zealand

In New Zealand’s hair industry, online booking revenue represents 12.5% of the total revenue in Q4 2021 compared to 11% in Q4 2020. Average online booking revenue in Q4 2021 increased by 17% compared to Q3 2021. This is likely due to increased demand after lockdown and the Christmas period.

Online booking revenue at hair salons in New Zealand

 

Online booking revenue at beauty salons in New Zealand

The same trends are observed for the beauty industry in New Zealand. Average online booking increased by 19% in Q4 2021 compared to Q3 2021 and by 7% compared to Q4 2020. Online revenue represents 16% of the total revenue in Q4 2021 which is similar to Q4 2020.

Online booking revenue at beauty salons in New Zealand

 

Beauty salon manicure COVID-19

How can you protect your business performance?

The COVID-19 pandemic highlights that challenges in business are inevitable but the good news is that there are steps you can take to take the power back and protect your business to succeed in the long term. Having a smart and reliable salon management system can help your business function on a day-to-day basis, as well as, automate admin-heavy tasks, streamline your processes and refocus on your clients. 

Here are the top 5 features that your salon management software should streamline:

1. Online booking

Online booking is a great way to fill your appointment book. It offers convenience to your clients and allows you to fill up your appointment book as more than 50% of online bookings for salons, spas and clinics take place outside of standard operating hours.

“Clients love that they can jump online and access our booking system, they can see exactly what they had done last time, and then they can just click repeat and book it in. It’s amazing!” says Alannah Read, the owner of two Ella & Jade Hair Salons in Queensland, Australia.

2. Waitlist

Check if your software has a waitlist feature as it’s very helpful to use to quickly fill any cancellations and gaps in your appointment book. You can also use this feature to move your appointments to a waiting list for when your business is temporarily closed because of a lockdown.

3. Digital forms

Digital forms are perfect for client consultations, consent and collecting information such as medical history. If you need to gather information from your client before their service, you can send them the forms by text or email to complete whenever suits them best. It saves you time during the appointment and provides a seamless experience for your clients. You can also use digital forms to provide information about your COVID-19 procedures and ask questions you need your clients to answer before their appointment.

4. Online vouchers and gift cards

Selling gift cards and vouchers at your front desk might be convenient for your regular clients but you’ll miss out on additional opportunities when selling online, like attracting new clients. Selling vouchers on your website allows your current and future clients to make an instant purchase and generates immediate revenue for you.

Gift vouchers also make great gifts for your clients’ friends and family and help secure future appointments for your business.

5. Automatic marketing

Marketing automation makes it easy to target and personalise every interaction with your clients on autopilot. Automatic messages can help you provide a better client experience and increase your bottom line. Examples of automatic client messages include appointment reminders and follow-ups, Happy birthday messages, after-care instructions, client referral ‘thank you’ messages, and reminders to clients that haven’t been back to see you for a while

To learn more about Kitomba Salon and Spa Software, watch this video to get key insights into the features that your business needs to prosper

Key metrics used

  • Revenue: number of client visits x spend per visit
  • Average quarterly revenue: the average revenue for the quarter for all salons in the dataset
  • Average client spend: the average spend per client on services and retail.
  • Average online booking revenue: the average revenue for the quarter received through online booking

Permission to use this content

If you’d like to use information and data from this article, please include a reference link to this webpage.

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