The Future of the Hairdressing Industry: An Economist's Perspective

 
COVENT GARDEN, U.K. - June 7, 2023 - PRLog -- As an economist specialising in the consumer services industry, I have watched with great interest as this dynamic sector has adapted and evolved in response to various economic and societal trends.

I offer a more statistically detailed prediction of where this industry may find itself in the next 5 to 10 years.

A Snapshot of the Hairdressing Industry

As of December 2022, there were roughly 40,000 hairdressing businesses operating in the UK. The workforce serving these businesses included full-time, part-time, and self-employed hairdressers and barbers, accounting for approximately 270,000 workers.

Anticipated Growth in the Sector

Let's start by addressing industry growth. Over the past decade, we've seen an average annual growth rate of around 2%. If we apply this growth rate for the next 5-10 years, the number of hairdressing businesses could potentially increase to approximately 44,000 by 2026 and nearly 49,000 by 2031.

Similarly, if we assume the workforce will also grow by the same 2% annually, we could expect the number of hairdressers and barbers to rise to about 295,000 by 2026, and over 324,000 by 2031.

Here's why:
  • Increased Demand for Professional Services: As knowledge about hair care and styling grows, consumers are showing a preference for professional services over DIY solutions. This trend towards professionalisation is expected to continue, driving growth in the industry.
  • Technological Advancements: The adoption of technology in the hairdressing industry has the potential to increase efficiency and customer satisfaction. This, in turn, can lead to growth in the number of businesses as they can reach and serve more customers effectively.
  • Urbanisation and Changing Lifestyles: Urbanization and changing lifestyles can contribute to industry growth as well. In densely populated urban areas and among busy working professionals, convenience is key. The demand for quick and accessible hairdressing services is expected to rise, leading to an increase in businesses to meet this demand.
  • Workforce Expansion: The growth in the number of hairdressing businesses naturally leads to an expansion of the workforce. Additionally, hairdressing and barbering continue to be popular career choices due to the creative fulfilment, flexible working conditions, and the ongoing demand for these skills.

Technological Impact on Revenue

The impact of technology on business revenue is substantial. Consider that salons that have already adopted online booking systems, virtual consultations, and data analytics reported an increase in customer satisfaction and repeat business by an average of 20%.

If these technology trends continue to expand across the industry, the average annual revenue per salon, currently around £85,000, could see an increase of up to £102,000 by 2026, and up to £122,400 by 2031, representing a 20% increase every five years.

Sustainability and Consumer Spending

A Nielsen report in 2018 found that 81% of global respondents felt strongly that companies should help improve the environment. This consumer sentiment is expected to increase and influence spending habits.

Assuming that salons switching to eco-friendly products and practices attract more customers, they could experience an increase in business of up to 15%. Therefore, a salon currently making £85,000 a year could potentially increase its revenue to nearly £98,000 by 2026 and over £112,000 by 2031 just by prioritising sustainability.

Specialised Services and Market Demand

With increasing professionalisation and specialisation in the industry, specialised services are expected to constitute a larger percentage of revenue. In 2021, services like hair colouring, extensions, and treatments for specific conditions accounted for approximately 40% of a salon's revenue.

If the demand for these services increases by an estimated 3% per year, specialised services could contribute up to 55% of a salon's revenue by 2026 and approximately 65% by 2031.

Bullish Times Ahead

The combination of industry resilience, consumer demands for sustainability, the ability to offer specialised services, and the embrace of technology make the hairdressing industry an exciting field. As we move towards the future, the sector seems poised for innovation and growth, offering a promising outlook for both businesses and professionals within the industry.

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