The taxi, delivery, and home services industries have all been rocked by on demand platforms. Now, a fierce battle is being waged for on demand beauty service to take control of the $46 billion U.S. beauty industry. According to Forbes, 28% of hairdressers, stylists and cosmetologists are already working as independent contractors. The beauty industry is an ideal environment for on demand platforms to gain traction.
On demand beauty service seems like a crowded market with nearly no barriers to entry
The New York-based startup GlamSquad has raised $9 million in two venture rounds to date. The gross sales are estimated to be about $8 million in the first year. They aim to launch in 15 cities within the next two years, up from its current footprint in style hot spots New York, Los Angeles and Miami. A scroll through the iPhone App Store reveals a host of companies offering on demand beauty services, with names like The Glamapp.com, BellaOndemand.com, Beglammed.com, and Venesette. Out of these, the most venerable is Vênsette who has secured $3 million in funding so far.
What makes an on demand beauty service highly demanded?
Getting an appointment at a local spa/salon turns out to be a hassle most of the times. Either you do not get the preferred time or you have to sit in the waiting area. Many-a-times, there are better deals in other salons, but most of the consumers remain unaware of them and tend to waste time sitting in a busy and expensive beauty salon. An online spa and salon booking website is the best possible solution to get rid of such hitches. It provides solutions to search and book appointments with salons, spas and proves beneficial for both the customers and businesses. The customer gets convenience and the business gets heavy footfall. Following are the details of how online spa/salon booking websites make money and what their business model is like.
Three types of online platforms have risen to fill that void.
- Marketplace- Platform for salon/spa listing: This is a subscription led model where marketplace platform charges a subscription from the businesses for listing.
- Aggregator platform for individual contractors: Adopting a commission based model where the platform charges a service fee for each transaction from the listed contractors/freelancers.
- An on demand beauty service app for individual salon/spa: This model allows you to provide service to a new set of customer’s with online behavior and thereby expand.
Marketplace and Aggregator model both allows consumers to compare services, scan and post reviews, and book services with a single click. Marketplace simply books services from customers and route them to salon/spa. Salon/spa handle the allocating the service provider themselves.The revenue is earned from subscribing business as a fee. This is yet in its nascent stage in the beauty industry and very few players offering a platform.
In contrast, the new aggregator platforms build their own network of freelancers, providing services at doorstep within time committed. Revenue is generated by charging a commission fee/service fee on every transaction.
On demand beauty service apps/ website – This model comes close to the uber for x concept. Provide app/website for individual or chain of spa/salon. Allow appointment scheduling, booking, rating, and payments online. You can provide an omnichannel experience by allowing the customer to either book an appointment online before visiting the salon or provide a doorstep service as per customer’s convenience.
How to scale online beauty/wellness service booking business?
- Add new categories: Adding new categories like Ayurveda, yoga, laser, aquatic therapy, nutrition consulting, meditation etc. will prove to be a good scaling option.
- Sell beauty/wellness products online: Achieve a competitive edge over your competitors by adding an online store to sell beauty products.
- Enter new geographic market: To generate more revenue and improve the reach of your business enter the new geographic market.
- Start subscription box business: Integrate your current business with subscription box business and start delivering the box of beauty products each month to your customers for a fixed subscription fee.
- Launch exclusive offline for wellness services and beauty products: Once the brand has made its place in the market, setup offline store. Business can also earn from franchisee model.
- Go online: Provide on demand service to your clients at their doorstep and increase business footfall by having your own branded app and website.
Investors, for their part, also seem to see value in the on demand beauty service segment. With investors shoveling money and start-ups being bullish on growth, the future of this segment seems bright. Since the size of the opportunity is over $46 billion, it’s big enough for multiple players to enter.This is only the start of this segment and more players entering the market will help in growing the pie.
Build your own Uber-like on-demand beauty app and expand your business. With the push of a button, the app delivers beauty experts to the customer’s front door. App/website lets the service providers offer services that range from a blow dry, to make up applications, or for just a simple polish change. Customers don’t have to leave their house when there’s this flexibility to exhibit the salon right at the spot where customers need it.Business has the flexibility to manage appointments, payments, ratings on a user-friendly dashboard.
Subscribe to our newsletter
'Jungleworks Entrepreneur's Den' to get access to the latest industry & product insights.