Trend #1: The Rise of Gig Economy in Beauty Salons
The gig economy is a business model where companies hire freelancers and independent contractors for short-term projects instead of employing staff full-time. In the traditional beauty industry model, salons act as employers: they hire stylists, handle customer interactions, and manage feedback. However, for most clients, the relationship is with the stylist, not the salon itself.
A new "Uberization" model is emerging to address this, allowing clients to minimize the role of the salon as a middleman. In this model, salons transform into co-working spaces where stylists rent workstations instead of being employees.
Most co-working salons currently only provide workspace — often referred to as "the chair." Stylists are responsible for purchasing their own equipment and products. However, the expectation is that this model will evolve, and co-working spaces will offer everything a stylist needs, while the stylists themselves operate as freelancers.
Benefits for all parties:
- Stylists gain complete freedom and independence. They can choose when and where to work without following a salon’s rules or schedule. They only pay for the hours they use the space, and they also benefit from reduced tax rates, paying 6% as freelancers instead of higher employee taxes.
- Salons reduce operating costs by not employing staff and avoid paying employee taxes. By providing a high-quality workspace and materials, salons also reduce staff turnover, as better conditions will encourage stylists and clients to stay loyal to the co-working space.
- Clients benefit from direct contact with their favorite stylists, without a middleman. Freelance stylists are often more motivated to build customer loyalty, knowing that satisfied clients will spread the word, which is still a powerful tool in the beauty industry.
While traditional beauty salons will continue to exist, the co-working model provides an alternative with different benefits. Standard salons offer advantages such as consistent quality control and strong brand presence, which can be harder to maintain in a co-working space.
Trend #2: The Growing Popularity of Service Aggregators
As co-working beauty spaces and salons grow, clients increasingly turn to aggregators — platforms that compile offerings from various salons and stylists in one place. Aggregators are already popular in other industries, like cinema listings or restaurant reviews, and they are starting to gain traction in beauty services.
Benefits of aggregators:
- All available options are in one place, allowing clients to easily compare services, prices, and reviews.
- Filters, reviews, and ratings help customers choose the right salon.
- Many aggregators offer loyalty programs that benefit both clients and salons by attracting new customers.
Drawbacks of aggregators:
- Non-transparent algorithms make it hard for salons to influence their ranking in search results.
- Easy comparison with competitors may not appeal to some salon owners.
- The aggregator’s goals may not always align with a specific salon's strategy, such as participating in loyalty programs.
Though service aggregators in the beauty industry are still in their early stages, they are likely to play a significant role in helping clients choose and book services. Additionally, these platforms could automate financial and legal relationships between stylists and co-working spaces in the future.
Trend #3: Auto-Payments Through Pre-Authorized Transactions
Pre-authorized payments allow for automatic deductions from a customer’s account after a service is provided, without the need for additional confirmation. A customer links their payment card to the service, and the fee is deducted automatically once the service is completed.
This model works well for regular clients who visit the same salon frequently. For example, a customer who gets a manicure regularly at the same salon could link their card and save time on payment. For salons, such a payment method signals a high level of trust from the client, which can be rewarded with loyalty bonuses or discounts.
Advantages of pre-authorized payments:
- Saves time, as clients don’t need to input card details or wait for the administrator.
- Quick, contactless transactions that eliminate the need for conversation or waiting.
- Faster service at the point of sale, reducing opportunities for fraud.
Challenges:
- It’s a new and unfamiliar payment model in the beauty industry, and it may take time for clients to trust it.
- Adjusting payments for service upgrades (like adding more services) could require additional steps, such as canceling the original auto-payment.
As technology and user experience improve, more clients are expected to embrace pre-authorized payments, making the process quicker and more convenient for both customers and salons.
Conclusion
The beauty industry is rapidly evolving due to new technologies and business models. The adoption of the gig economy, the rise of service aggregators, and the implementation of pre-authorized payments are reshaping how beauty services are offered and consumed. Those businesses and stylists that quickly adapt to these trends will not only retain their customer base but also expand their reach in a highly competitive market.