Beautiful hair products on display in salon

Industry insights: Retail statistics for the hair and beauty industry

23 Apr 2021 by Kitomba

The hair and beauty industries in New Zealand and Australia experienced pent-up demand for services and retail in 2020 after lockdowns. Some were even able to pivot quickly to selling retail online while their businesses remained closed. Lots of clients were keen to support their favourite salons and buying retail is one way they did this, which lead to a sharp increase in Q2 2020 when looking at retail as a percentage of overall revenue and retail basket value (average amount spent on retail in a single transaction). Since then, these figures have continued to trend upwards, which highlights the importance of an increased focus on selling retail to clients.

Comparing year on year, we can see that both the hair and beauty industries in Australia and New Zealand have seen a gradual increase in retail sales over time. Looking at retail sales as a percentage of overall revenue and at visits that include retail purchases as a percentage of overall visits, we saw the same upward trend across both hair and beauty.

Reviewing average client spend per retail transaction, we also noticed a steady increase in the average basket value . This increase is due to a combination of changes to the average price per retail item and also the number of items purchased per retail transaction.

Average basket value for the New Zealand and Australian hair industries

Graph showing average basket value in the hair industy

Every year in the hair industry we see retail sales figures rise and fall, peaking in Q4 before dropping back in Q1 the following year. Comparing year over year however, we can see a steady increase over time in both New Zealand and Australian hair industries. 

The average basket value (average amount spent on retail in a single transaction) follows this same pattern, peaking in Q4 each year while continuing to grow steadily over time.

Average basket value statistics for the New Zealand  and Australian beauty industries

Blog Vector Image_Average basket value_beauty

Unlike the hair industry, beauty retail numbers don’t show huge peaks in Q4, but they too continue to rise year over year.

While overall retail revenue during Q2 2020 was lower than usual due to COVID-19, both New Zealand and Australia did see a huge jump in average basket value when businesses reopened as clients stocked up on their favourite beauty products. 

In New Zealand the average item price has remained static for the past few years but the number of items purchased is gradually increasing, leading to the overall average basket value increase. In Australia it’s the opposite as the number of items purchased has stayed steady but the price per item is gradually increasing.

The verdict

So, what can we learn from this data?

While the dollar values of retail beauty products tend to be higher than hair products, both the hair and beauty industries are seeing an increase in the overall amount of revenue that comes from retail sales and an increase in spend per retail client. 

Retail is a great way to increase how much your clients spend and increase your salon, spa or clinic’s profit. Increasing the percentage of clients that purchase retail will help to bring up your bottom line, so make sure you’re upselling retail to your client base. 

Selling retail products and salon or spa

Tips for selling more retail in your salon, spa or clinic 

Here are our top tips for upselling and cross selling more retail. 

Educate your clients and staff

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 sure your team members are making recommendations based on the needs of your clients, and have had sufficient training (as well as receive ongoing training) to be confident enough to do so.

Helping your clients understand what products are best for what they want to achieve, how much to use and how to apply it goes a long way to reinforcing the fact that they should be walking out the door with the product. Being successful in attaching retail to your services has to do with the overall approach of your team, so ensure they have the skills needed to successfully upsell retail to their clients.

Display your products prominently

Make your retail products accessible and displayed in-store. Display retail close to where your clients pay, as clients are more likely to consider retail when they’re paying for their appointment, so make it easy by displaying products in that location. Clearly mark prices as this is an important piece of information for your clients.

Use Kitomba’s upsell retail feature

Use the upsell retail button when invoicing a client in Kitomba to see the last five retail products they’ve purchased. If they haven’t yet purchased retail, you will be shown the five the most popular selling items. Learn more about this feature.

Sell service and retail packages

Not only do packages help to increase your retail sales, but they’re a great way to offer more value to your clients. Selling retail and services together is the perfect way to ensure your clients can maintain the hard work you’ve done between appointments, which will ultimately help them to be happier with the results!

Set sales targets for your team

You can set retail sales targets for your team members in Kitomba and offer incentives, such as commission, for reaching their targets. They’ll be able to see how they’re progressing towards hitting their targets on any device, providing a visual snapshot of their sales and what they need to sell to bridge the gap. Read how to set targets for your team to find out more.

Open an online store

Creating an online retail store gives your clients the freedom to purchase retail anytime they want, and gives you another opportunity for retail sales if you miss out on them in the salon. 

Google reported that 63% of shoppers start their sales journey online, regardless of whether they end up purchasing online or instore. This means that having an online retail store would also allow non-clients to see your products, increasing the reach of your brand. 

Plus, 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

If you’re in Australia, you can sell retail online with Support Your Salon, where you can create your own retail store on the platform and receive a percentage of the sales revenue. Support Your Salon sends the products directly to your client on your behalf. Find out more

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. 

Selling salon retail productsDiscover more tips for selling retail

For more tips on increasing your retail sales, read: 14 ways to sell more retail in your salon, spa or clinic, how to become an expert in retail sales and watch our Facebook Live with Mark Ipaviz from Ozdare.

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 – 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.

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