As we approach the holiday season, salons will be looking at their retail offerings – and data from NPD Group shows they should stock up. Despite the economic challenges posed by lockdowns, the NPD Group found that 29% of U.S. consumers plan to spend more during the holiday seasons than last year, despite no change in feelings around their finances.
The major growth driver was increased consumer comfort with in-store shopping experiences, essential for salons that rely on in-person after service sales. The survey also found that consumers plan to do their holiday shopping earlier, potentially influenced by expected supply chain issues and shipping delays.
So far, these attitudes have been mirrored on Australian shores. The Australian Retail Association (ARA) has forecasted an 11.3% increase on pre-pandemic levels of spending. ARA Chief Executive Paul Zahra said that consumer sentiment is upbeat and that Christmas demand levels have been ramping up online since September.
Factors influencing attitude include:
. Consumers will be seeing a wider network of family and friends this holiday season compared to last
. Consumers expect to visit or host family and friends for the holiday season (47% in the U.S.)
. Six out of ten consumers (58%) are more comfortable shopping in stores now that vaccines are widely available
Marshal Cohen, Chief Retail Industry advisor for NPD, said: “It’s going to be a hybrid holiday this year, blending the return of a celebratory feeling with the new normalised pandemic lifestyle.” Consumers are predicted to spend half of their holiday budget online. But there are some complicating factors.
What’s happening at home?
Catherine Biedermann, Managing Director at Advanced Cosmeceuticals, tells Professional Beauty: “Since the reopening, salons and clinics have been inundated with appointment requests for their professional treatments, while also experiencing a surge in retail sales.” While this is excellent news for the professional beauty industry, it’s placing strain on businesses. “Salons and clinics are feeling overwhelmed with the increasing demand for their professional services, particularly with the festive season around the corner. Most have had to extend their working hours, and clients are still going on waiting lists with appointments booked until after Christmas.”
Bidermann has seen an uptake in treatments that combine visible results with therapeutic experience. However, salons and clinics remain gun-shy with their spending. “While in general, the overall demand has been positive, there remains a sense of uncertainty. That uncertainty has seen restraint in spending patterns and orders upon the reopening. Despite surging demand for services, it will still take some time before we see full recovery and confidence return to the industry.”
The sticking point:
The ARA’s Chief Executive Paul Zahra has flagged that product shortages could undermine potential profits and price jumps as shipping delays persist. The World Bank has estimated that 8.5% of global container shipping is stalled in or around ports and shut down ports. With shipments held up in China, some countries like the U.S. have stopped delivering to Australia. The IMF has lowered its global growth outlook in line with the “hobbled” pandemic recovery.
Meanwhile, Adobe Analytics reported that the number of out-of-stock products online across 18 product categories surged 172% between January 2020 and August 2021. YOY products were out of stock 24% more of the time in August 2021 than in August 2020, despite the comparative easing of COVID-19 restrictions. Supply chain and delivery are the main drivers for this. Tylor Schreiner, director of Adobe Digital Insights, told CNN Business report that the figures were a record.
How is the Australian beauty industry coping?
Australian businesses have been impacted by delivery and freight, with local labour disputes and self-isolation requirements causing havoc with local delivery services.
Bidermann says that there have been significant difficulties related to freight during the reopening, “Our COVID-19 supply difficulties have been predominantly freight-related.” She says that this has been across the board, “we’ve experienced delays both internationally, which delayed stock arrival from global brands, and domestically which was frustrating for both our salon and us and clinic partners.”
Biedermann says for the Advanced Cosmeceuticals business, the best defence has been to stock up: “We’ve markedly increased our stock levels to help avoid out of stock situations.” However, even the best precautionary measures can be thwarted. “We were additionally faced with domestic fright issues throughout the lockdown, which caused delivery backlogs,” says Biedermann, “Our freight company Startrack had depots which were full during the NSW lockdown, meaning undelivered items were returned.”
Her takeaway has been the importance of ordering efficiently for your business. “One thing we have learnt as a supplier is to order sufficiently so as a business. You are not left short. Our advice to salons and clinics has been to order early and order enough to see yourself through the Christmas period and beyond. Businesses need to maximise this period of client demand and avoid any unnecessary loss of sales. That may mean ordering more than less.”
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