Tuesday last, I took the wife's Suburban to the Bellevue dealership for a little TLC. To kill time, I decided to walk to Whole Foods to enjoy a long latte. I only had to walk from the Chevy dealership, empty of salespersons and customers, past a half dozen closed down car dealerships to reach the conclusion that the Northwest economy has definitely slowed down.
Why then, I asked myself, is the business of the salon I work at up an average of 10% this quarter over the same period last year? Is it true that the salon business is recession proof, when clients pay closer attention to their appearance to mollify job insecurities, or is the other economic shoe about to drop?
It seems prudent to take a look at spending trends to determine which areas of discretionary spending are either retracting or about to shrink.
In a recent New York magazine article, it was noted that stores are drastically cutting back on plus sized clothes, despite indicators that this is a growing market segment. Fifty-six percent of all women wear a size 14 or above, so any drop in sales here is substantial.
Sales of all clothes have fallen 2% in the past several quarters and plus-sizes sales has fallen 8%. Now, if you are thinking the same thing I am, you will wonder if the retail scene is so fragile that a 2% drop in sales will spark a retraction like that, what would a 5% overall decline bring? We may see just that, according to Time magazine and other pundits.
Pew Research Center, in a recent article cites that the market segment of 18 to 49 years old buyers is cutting back dramatically. Sixty-eight percent of this segment is saying they are cutting back their unnecessary spending.
For salons, this wide age group is the one with the most disposable income and spends the most on salon services.
MSNBC reports that teens are cutting way back on proms. They are eliminating limos, borrowing dresses and dumping, gasp, salon-created hairstyles. This is an effect of a slower economy I wager that all salons are noting.
Restaurants and bars are barely filling their chairs as Americans skip fine-dining and drink their cocktails at home. Restaurants which depend upon special occasions for a larger percentage of their weekend business are the most affected. This can cut into salons that have strong event hair business.
In an article in US News and World Report, financial analyst Mortimer Zuckerman observes "a staggering 88 percent (of consumers surveyed) say they'll reduce dining out; about 80 percent will cut back on clothing, leisure activities, or entertainment."
In an online survey in DailyMakeover.com, , nearly two-thirds of women say the economy is affecting how much they spend on beauty products and services; with over half reporting they are spending less on makeup, hair products and salon treatments.
As a way to save, nearly half of the women who responded to the online survey said they have changed the brands of beauty products they purchase in order to save. Even more (55%) said they are spending less on professional salon services and opting to do things themselves such as coloring their hair and doing their own nails.
This is significant evidence of a downturn in total spending for beauty services and products, yet there are salons which are yet to feel the downturn and are growing their businesses.
It is possible this is an effect of the decision by many salon consumers to treat their salon visits as little necessities: each visit to a more upscale salon affordable and reminiscent of past amenities.
This is the opinion of stylists to the stars, Oribe and Michael Shaun Corby. They both believe the clients will continue to spend in salons as long as we give them a value-added experience that focuses upon their need to experience affordable luxuries.
This approach will make the salon business truly recession proof.
PEW Research article: 'Not your grandfathers recession'
MSNBC: www.msnbc.com
USNEWS: 'recession-aftershocks-shake-confidence'
Beauty Packaging.com Women spending less on beauty products
Capelli d'Oro interview: Michael Corby 2009
Capelli d'Oro article: 'How to thrive while others survive'
