Top salon chains turn to on-demand beauty services to make up for low footfall
While salon chains have seen a greater adoption for their at-home services in the past year, customers are still not ready to pay extra to avail them.
A lacklustre first quarter and business resuming to only 70-80% of the pre-Covid level means the beauty salon industry will be hit by 35-40% in FY21, experts say. Salon chains such as Enrich Salon, Naturals Salon and Spa, and Jean-Claude Biguine (JCB), are reviving their plans to offer on-demand or at-home beauty services to earn additional revenue as footfall in salons remains low.
JCB and Enrich Salons — which did not see much success with their home services initially — say their at-home bookings have almost doubled as compared to the pre-Covid period. JCB services about 2,000 home visits a month currently. Naturals Salon and Spa, which received about 650-700 home requests in a day prior to March 2020, now sees around 3,500.
Start-ups Urban Company, Housejoy and Premend Services operate in this segment. Urban Company, which draws about 50% of its revenue from beauty services, witnessed a 30-40% growth last year, driven by its aggressive marketing initiatives, experts say.
As beauty salons go back to offering at-home services, their challenge of finding a profitable model of operation remains.
Jean-Claude Biguine introduced JCB Home in Mumbai about two years ago. The service was extended to Bengaluru, its second-largest market, last year. The company, which adopts a hub-and-spoke model for at-home services, now plans to take it to small towns in Western and Southern India, such as Nagpur, Indore, Vadodara and Kozhikode.
“In some of these towns, we will introduce the services along with our salons (franchise-based); in others, we will introduce them independently,” says Samir Srivastava, CEO, JCB India. The company plans to charge a premium of 10-15% for offering these services at home. Presently, these are being offered free of cost, but only within a three-km radius of its salons. JCB has 20 salons in Mumbai, Pune and Bengaluru.
Enrich Salons, too, had ventured into the segment in 2016, after acquiring the on-demand beauty service platform Belita. Under the company’s model, it has at-home service professionals stationed out of most of its salons, except those located inside malls. It has 83 salons in the country. Bhupesh Dinger, director, Enrich Salons, says though the service has seen growth in the wake of the pandemic, its contribution to the overall business remains in single digits.
Both the companies, however, are betting big on this segment for the long term.
In need of a makeover
While salon chains have seen a greater adoption for their at-home services in the past year, customers are still not ready to pay extra to avail them. Salon operators incur extra costs associated with travelling and training of professionals when offering services at home. Naturals Salon and Spa currently offers at-home visits free, out of 670 of its salons, and services requests only above Rs 1,000. While it plans to charge its customers a premium, it may not be easy.
“Customers are unwilling to pay a premium for these services, but instead want a discount; the market has been spoiled by start-ups,” says CK Kumaravel, CEO and co-founder, Naturals Salons and Spa. The company had started offering home services in 2016, but could not scale up due to this reason.
Companies like Urban Company, meanwhile, offer services like facials starting at Rs 600, and follow an aggregator model which involves freelancers.
According to Shipra Biswas Bhattacharyya, partner, Kearney, offering beauty services at home is an entirely different ball game from in-salon services. “These brands will have to engage and train a different workforce, as sending the same celebrated or senior hairdresser to a home will not be cost-efficient,” she says.
Changing their labour and compensation models will be crucial for salon chains to sustain operations.
“Given that the beautician cannot be monitored during a home visit, the compensation model needs to be linked to certain productivity indicators. These could be based on the frequency of visits or customer feedback,” says Madhur Singhal, practice leader, consumer and retail, Praxis Global Alliance.