The past year, salon chains were among the services that saw least uptake. Several players in the salon business had to either shut down outlets or scale down services significantly. For instance, Naturals Salon shut down around five salons last year, while Jawed Habib had to shutter four. Post the second wave, however, most salon chains have seen business revive.
Lakme Salon and Enrich surpassed pre-pandemic sales in September, 2021, while Naturals Salon reached pre-pandemic levels in October, 2021. Jawed Habib expects to match its pre-Covid sales figure in around six months, while Geetanjali Salons hopes to do so by early next year. Pakhi Saxena, head of CPG and retail, Wazir Advisors, says the Indian salon market, which was at Rs 55,000 crore in FY20, is expected to grow to Rs 1.89 lakh crore in FY25, at a CAGR of 28%.
Getting a makeover
To brace for the impact of the pandemic, salon chains have adopted single-use service kits and disposable tools. Most have rolled out private labels. Geetanjali Salons, which operates 120 salons in India, launched its in-house skincare brand in August this year. In June last year, the company launched its app through which customers could check service availability, book slots, verify their memberships, etc. “By September, 2020, we saw 80% of our customers shifting to online booking for appointments. As of September, this year, 40% of our customer base comprises new customers who came to us through this app,” says Sumit Israni, MD, Geetanjali Salons & Studios. The chain aims to increase its salon count to 150 by next year.
Jawed Habib, too, is working on launching its brand of hair and beauty products. Further, the chain plans to expand its presence in tier II and III cities. “These cities are performing well for us compared to the metros, as the pandemic did not have a major impact on them. These are our best bet,” says Jawed Habib, chairman and MD, Jawed Habib Hair & Beauty.
Enrich’s own skincare brand, Born Ethical, was launched in June, 2021. The salon chain opened a new beauty-cum-retail store format in October this year — the over 2,500 sq ft large-format store has 60% area dedicated to beauty retail, covering cosmetics, skincare, haircare, fragrances, and beauty accessories. “We’ll be opening six to eight large-format stores every year. We will also launch our e-commerce website in a month,” says Vivek Bali, CEO, Enrich. The at-home salon business, Enrich says, helped it sustain during the pandemic, and currently contributes 15% of its total sales.
Meanwhile, Naturals Salon is working out a partnership with Nykaa to sell Nykaa products in its salons. Also on the cards are private labels in colour cosmetics, ayurvedic products, vegan cosmetics, haircare and skincare next year. From 700 salons at present, the chain has plans to reach the 3,000 mark by 2025, reveals CK Kumaravel, CEO and co-founder, Naturals Salon & Spa.
Lakme Salon’s expansion plans, on the other hand, have been hit by the pandemic. “Pre-pandemic, we were launching two salons a week. This expansion has seen a slight slowdown, but we aim to get back to the earlier rate in a few months,” says Pushkaraj Shenai, CEO, Lakme Lever. The company, which bets big on the bridal season annually, has partnered with WedMeGood this year.
What’s in store
“The salon industry has already revived to 70-80% of pre-Covid level, through a mix of at-home services and in-store sales,” says Angshuman Bhattacharya, partner and sector leader (consumer products & retail), EY India. However, he adds, that managing store profitability, high employee attrition, and customer and employee safety perceptions are some of the key challenges these players face at present.
Sameer Amte, MD and lead (retail), Accenture India, is of the opinion that salons need to reinvent their business models, with digital as a clear differentiator. “They can embed analytics into their day-to-day business to target relevant customers, and cross-sell or upsell services based on their preferences,” Amte says. Enabling 24×7 engagement with customers — by digitising appointments and customer query management or by providing customised solutions such as a virtual beauty advisor — could be a good tactic.
Bhattacharya says revival would hinge on better home services, and rationalisation of space and employee productivity. Launch of private labels would also help improve store revenues.