As salons in most European countries reopen in May (in Russia, they began reopening as early as April 20), all stakeholders of the industry are counting losses and looking ahead. This year is the most challenging in particular for salons, as their closures for one to two months and restricted operations have greatly impacted revenues.
Kline forecasts that total salon revenues in European key markets can be impacted by less than a 20% decrease in the best–case scenario, whereas revenues shrinking by one–third is the most–likely scenario, according to the recently published Impact of COVID-19 on the Salon Hair Care Market. Given the sluggish performance of the salon industry in recent years as well as the fact that many salons will go out of business, the market—in terms of salon revenues—is not expected to recover to its pre-2020 levels for next five years, even in best–case scenario assumed by Kline.
Although sales of professional products suffer as well due to salon closures, the options for salon hair care marketers seem more optimistic. The expansion of professional product sales into other channels of distribution—in particular, e-commerce—has been one of the key market developments in recent years. Sales outside salons through both physical stores and online ones were already accounting for 15% of total sales in 2019, and their growth has been substantial—8% in completely flat overall professional product sales in nine key European markets tracked in detail in our Salon Hair Care Global Series. E-commerce accounts for most of the growth and sales outside salons, and this channel could also be a lifeline for marketers whose sales were already decreasing in the salon channel pre-COVID-19 crisis.
Another natural development of the salon industry is the increase in independent stylists. Salons going out of business, plus new, restricted work conditions in salons that are not necessarily friendly or comfortable for stylists and clients, will most likely drive more stylists to a more flexible mode of working. In our upcoming Independent Stylists: Global Market Brief, we track all forms of independent hairdressing: at-home, mobile traveling to various locations, and booth and chair rental—whether full–time or at least part–time.
As we look ahead to how the industry develops, it’s important to also assess the true performance of the industry in the first half of the year. As the first six months of the year wrap up, Kline is planning on updating data on key markets globally to show the real impact of the pandemic and measures taken on the salon hair care market with H1 updates. In addition, the 2020 edition of our annual Salon Hair Care Global Series report will also shine a spotlight on growing market segments such as products for men, naturals, and scalp care.
