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On Demand Businesses 101

Stepping into On-Demand Beauty? Know your turf!

We wrote an article last year on the on-demand beauty industry – Beauty On Demand : How the beauty industry has gone mobile. The startups that we covered back then have only grown bigger with the increased funding into this industry. If you google on-demand beauty, you will get a list of startups in this space that offer real value to consumers and freelancing stylists when it comes to being a platform to book beauty appointments. A few examples of such startups are GlamSquad, StyleBee, Stylisted and Priv. The stakeholders in this space are salon chains, individual salons, freelance stylists, entrepreneurs creating the platform and the end users. With more consumers using their mobile devices to browse and buy on the go in our non-stop, got-to-shop world, the beauty industry is trying to get to grips with the trend. Latest research from the New York-based L2 think-tank shows that nearly 75 per cent of beauty sites are now mobile optimized, up from 50 per cent in 2012.

Business Models in the On-Demand Beauty Space

In the same way you’ve ditched that pile of takeout menus for Seamless and prefer to open Uber or Lyft instead of hailing a cab, it’s time you do the same with your manicures, blowouts, and even spa services like facials. Primarily, there are two ways to do it – you book a slot for yourself online and show up at the salon or you book a slot with a freelancing stylist to deliver the service at your location. There are limitations and advantages of both these models, and different requirements of building these platforms. 

on demand beauty

On Demand In Store Reservation : A model facilitating Parlour/Salon bookings (Style Seat)

This business model aims to provide a platform for booking an appointment with a stylist at their office location. We have taken the example of Style Seat to explain this further.

StyleSeat is a platform that allows customers to search for and book stylists for beauty services like haircuts, manicures, massages etc.  The company earns a commission from each booking it makes as well as earns money from advertising that stylists do to promote themselves. The company earns half the price of the first client for a stylist. What makes this model great is that it gets together a fragmented market. Stylists don’t have the expertise to market themselves and here is where StyleSeat steps in. Also, in styling, communication with the client and a stylist’s personality is often a major factor in choosing who to go to. StyleSeat does a good job of allowing their stylists convey this on their personalized pages through both text and photos. It also allows stylists to charge more for the days and times that they are busiest while charging less to attract more customers during slow periods.

StyleSeat on demand beauty

Value for Stylists: Access to free tools like schedule management, client tracking, online booking, custom statistics, business education, mobile tools and a professional website. They can also access additional tools to really grow revenue starting at just $25/month.

Value for Clients: Clients can search, browse photos and recommendations, see where their friends go and easily book at their convenience – all completely free.

(*You can also find independent stylists to service you on location on StyleSeat but that is subject to you and the stylist reaching an agreement about the service’s location)

This is an example of a buyer-pick marketplace wherein the client can choose a stylist based on variables like requirements, reviews, recommendations, proximity, price etc. This model involves reverse auctioning of freelancers who are not tied in with the model and use it as a means to fill the empty slots in their schedule. As against the direct match model where the matching algorithm dispatches the freelancers, reverse auction involves the end user choosing from among the available freelancers based on the services provided, prices, their profile and reviews. StyleSeat is a good representative startup in this space. Here’s why a business model like StyleSeat’s for your on-demand beauty startup is a good idea.

Another case of this category is when salon chains enable salon appointments to be made online, but don’t necessarily let you choose the stylist. This is what MiniLuxe is doing. It lets you book a prepaid appointment at one of its salons for a particular date and time. You can ask for a particular stylist but there is no provision for seeing the work done by them beforehand.

On Demand At-Home Services by Independent Stylists (GlamSquad, StyleBee, Stylisted, Vensette, BeGlammed)

This business model aims to provide a platform to book independent stylists to provide on demand beauty services at the client’s location. The matching of the customer to the stylist could be automatic or manual. We have taken examples of GlamSquad and Stylisted to explain this further.

Automatic Matching of Stylist

Glamsquad is an on-demand, app-based beauty provider delivering professional and affordable hair, makeup and nails (currently available in NYC only) services to a client’s location like home, office, hotel etc. Operating in New York, Los Angeles and Miami, the company plans to debut in other cities soon. From a user perspective, Glamsquad operates a little differently than its competitors in the on-demand beauty market. Glamsquad users are asked to choose a hairstyle or makeup look before booking an appointment. Based on the style the user has selected, Glamsquad will assign a beauty professional to arrive in as little as 90 minutes. This makes it a supplier pick marketplace as the client is automatically matched to the stylist who will provide the service. 

GlamSquad on demand beauty

Manual Selection of Stylist

This model involves reverse auctioning of freelancers who are not tied in with the model and use it as a means to fill the empty slots in their schedule. Stylisted is similar to Glamsquad in the services it offers but has one important distinction – it allows clients to select the stylist who will visit you. Each freelancing stylist has a separate profile that the client can go through. Prices are different for different stylists and there are reviews and recommendations one can see on each personalised stylist profile before making a decision. Hence, this is an example of a buyer pick marketplace, like AirBnB. 

stylisted on demand beauty

Other cases in this category include specialized On-Demand Services (For eg. CityMani for Manicures & Pedicures). This business model aims to provide a platform for booking specialised on-demand beauty services like blowouts, manicures etc. 

If you are looking to build the next big thing in on-demand beauty, we suggest going through the Case Study for Vyomo that explains how we powered the technology behind Vyomo, an on-demand beauty service in India.

Review layer is particularly important for beauty on demand platforms owing to the higher unease factor that characterizes the end customer requesting a stranger to provide her a blowout in the sanctity of her home. Talent and social skills required and safety considerations make it imperative that the review mechanism should be solid both at the on boarding level as well as making voice of the end users heard. Combination of reference checks, tests and in-house training are being used by current startups in this space. For eg. Stylebee uses the services of Hirease (same company used by Uber) for background checks.

Payment is demanded right after the service request is confirmed. General practice is either having tips included in the initial price that is quoted or giving the user the choice to select a 10%,15% or 20% tip.

Looking at these trends, existing salon chains have also started mulling whether to adopt the on-demand model as this is how the industry is evolving. At the least, salon chains and even single location businesses are now catching the mobile app bandwagon – the latest trend to catch their customer’s fancy – where he/she can look for available time slots at their regular salon, compare the prices and packages and even book an appointment with their favorite stylist for a better experience.  There are many other startups that are trying to differentiate themselves either on the basis of geography being catered to or services being provided or customer service or specific nuances in the business model. Who and what will ultimately succeed in this space only time will tell. But clearly, there is a lot of scope for many other players to come and take a pie of this huge market. 

None of these startups could have succeeded without a robust technology framework. If you want to understand how the different modules of an on-demand business (Sign Up, Scheduling, Matching, Notifications, Tracking, Payment, Promotions, Review) you must check out our free ebook – Technology for an On Demand Platform or fill out your email id below.

Get in Touch with us to shape your on demand business ideas into reality! You will be thrilled, we are sure.

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