Introduction

According to McKinsey & Company [1], the global beauty and personal care market is showing steady growth, which emphasizes the need for innovative management approaches. One of the components of this industry, along with the production and distribution of beauty products and tools, is the beauty salon business. In a dynamic industry, beauty salons are faced with the need to adapt to new market challenges. Today’s consumers expect high levels of service, personalized services, and ease of interaction, which requires managers to implement effective management strategies.

Studies show that successful management also requires effective approaches to staff motivation and training, improving logistics processes and increasing employee productivity [2]. When implemented in an integrated manner, these methods can significantly improve operational performance and contribute to the growth of customer loyalty.

Chapter 1: An overview of the beauty industry and current trends.

The beauty industry is witnessing steady growth. According to McKinsey & Company, the global beauty market, which includes skin care, perfumes, makeup, and hair care, will reach approximately $430 billion in 2022. This is expected to grow to $580 billion by 2027, which corresponds to a compound annual growth rate of about 6% [3].

1.1 The state of the beauty salon market.

Beauty salons play a key role in the industry, providing a wide range of services from haircuts to sophisticated cosmetic procedures. In recent years, there has been an increase in the number of salons, especially in developing countries, indicating an increase in demand for professional beauty services. According to a report by Statista [4], the beauty and personal care services market in the U.S. alone was valued at $87.9 billion in 2023, with a projected annual growth rate of 3.11% through 2028. According to BusinessStat estimates, the turnover of the cosmetology market in Russia in 2023 increased by 8.6% and amounted to 269 billion rubles. [5]

1.2 Major trends in the beauty industry.

1.2.1 Consumers use online platforms to book services and purchase products. Salons are adopting digital solutions such as mobile apps and online appointment booking to improve customer experience. According to a McKinsey report, digital channels have become a major growth driver in the beauty industry [3].

1.2.2 Consumers’ desire for personalized solutions that meet their unique needs. Salons are offering personalized consultations and customized treatments using customer data to create personalized offers.

1.2.3 Growing awareness of environmental impact is driving salons to switch to eco-friendly products and practices. According to a NielsenIQ report [6], 62% of consumers consider sustainability more important today than it was two years ago.

1.3 Customer needs and preferences.

Consumers are becoming more informed and demanding, expecting high quality service and transparency. According to a McKinsey study, customers value personalized and convenient services, as well as transparency about ingredients and brands’ ethical practices [3].

Chapter 2: Key strategies for managing a beauty salon.

Effective management of a beauty salon requires a comprehensive approach that encompasses marketing, operations, human resources, and financial aspects. The main strategies that help beauty salons to achieve high performance and increase their customer base:

2.1 Marketing strategies.

Marketing is one of the key tools that contribute to business growth. Beauty salons are actively using social media and other online platforms to attract new customers and keep existing ones interested. Recent data shows that 91% of consumers worldwide now prefer to buy beauty and personal care products via social media platforms, whether it be directly from a brands social media page, an in-feed ad or an influencer promoting a beauty product. [7]. Popular social networks allow salons to regularly publish photos demonstrating the results of work, hold contests, promotional events and maintain feedback from customers. This increases brand recognition and customer loyalty.

Customer loyalty programs are also an important part of marketing. Programs that provide accumulative points, discounts for regular visits and bonuses for recommendations encourage repeat visits and the formation of long-term relationships with customers. A McKinsey study found that more than 75% of consumers prefer brands that offer loyalty programs and additional benefits for repeat customers [8]. Loyalty programs, in addition to customer retention, also increase the possibility that a customer will recommend the salon to his or her friends.

2.2 Operational strategies.

Efficient operational processes are the foundation of a stable and successful beauty salon. Implementation of online booking and schedule management systems helps salons to organize workflow, avoid overlaps, and improve customer convenience. A study conducted by Business Research Insigts shows that the global beauty salon management software market size was valued at $726 million in 2022, and the demand for these solutions is projected to grow further [9]. Thanks to such systems, clients can independently choose a convenient time for a visit, and the staff is freed from the need to manually process all records by recording them on analog and printed media.

Figure 1. Global salon software market size [9]

Schedule management systems not only help avoid overlaps, but also allow you to send automatic reminders to clients, reducing the likelihood of missed appointments. This is especially important for beauty salons with a large client base, as it simplifies the organization of work and helps minimize the number of last-minute cancellations.

2.3 HR management strategies.

Personnel are a key asset of any business and their management requires a special approach. It is important to take into account both the professional skills of employees and their motivation and involvement in their work. Regular training and development of employees helps to maintain a high level of service and strengthen the reputation of the salon. According to Deloitte Comprehensive training allows to increase income per employee by 218% [10].

In addition, motivational programs also play an important role in staff retention and reducing staff turnover. These can be bonuses for achievements, awards for excellent customer service, professional development at the company’s expense, or internal recognition programs. Research shows that working in a comfortable and motivating environment reduces turnover and increases employee productivity. In a beauty salon where work requires interacting with customers, emotional intelligence and empathy skills are important, and developing these skills can have a positive impact on business results.

2.4 Financial management.

Controlling costs, pricing and analyzing financial performance help manage profitability and ensure business sustainability. One of the key performance indicators is the average check — the amount a customer spends per visit. Increasing the average check can be achieved by introducing additional services, offers and bundles, which can increase profitability without significant additional costs.

Chapter 3: Application of modern technologies in beauty salon management.

The application of modern technologies in beauty salon management has become a prerequisite for successful business operation. The development of technologies such as CRM systems, online booking, analytics platforms, and automation allows for the optimization of internal processes, personalization of services for clients, and analysis of the effectiveness of various business strategies.

3.1 Digital platforms and CRM systems.

CRM systems (customer relationship management systems) allow salons to track customer needs, visit history and preferences. CRM gives salons the ability to personalize their approach to each customer, as well as store and analyze information about interactions, purchases and visits. This helps increase customer satisfaction and loyalty, which ultimately has a positive impact on revenue performance. Technology enhances customer interactions by providing personalized experiences through online booking, targeted communication, and customer relationship management (CRM) tools. This enhanced interaction not only creates strong customer relationships but also enhances the overall brand image [11].

Software such as Bitrix, Saby, Kontur, 1C: Beauty Salon, Mangomint, GlossGenius, Vagaro and others are examples of successful CRM solution focused on the beauty industry. It offers customer data management, automates appointments and reminders, and allows you to measure customer satisfaction. In a highly competitive environment, such a tool significantly increases the chances of success, as it allows you to keep both staff and customer interaction under control, providing data for management decisions. The use of CRM also simplifies the management of customer feedback, allows you to promptly respond to negative comments and improve the overall quality of service of the beauty salon.

3.2 Online appointment and booking management.

Online appointment and booking management systems have become an integral part of modern salon operations. The ability to book a service online greatly increases convenience for customers, as well as helps manage schedules and reduces admin workload. According to GettApp #1 Software Reviews Provider, in 2021, about 60% of customers preferred to book service providers online, indicating the importance of digital solutions in the service industry [12].

Figure 2. Different ways to get an appointment with service providers [12]

Platforms such as EasyWeek, Dikidi, Booksy, and Fresha provide convenient tools to manage bookings, send automatic reminders to clients, and process online payments. They allow customers to book for services, see available times and choose the right professionals. This, in turn, helps to reduce missed appointments and improve service. In addition, thanks to integration with popular social networks and search engines such as VK and Yandex, these platforms increase the salon’s visibility and enable it to attract new clients.

3.3 Analytics and demand forecasting.

Modern analytical tools allow beauty salon owners to collect and analyze data on customer preferences, sales and the effectiveness of advertising campaigns, which plays an important role in developing growth strategies. The use of data analytics can also help anticipate changes in demand for certain services and ultimately optimize operational processes. The analytical tools software is a feature-rich analytics platform for salons and spas that tracks key performance indicators and helps to manage profitability, analyze the effectiveness of marketing campaigns and build forecasts on client flow. This allows salons to better understand customer behavior, as well as tailor strategies to meet their current needs and market conditions. For example, analyzing data on customer visit frequency, preferences, and spend allows for more accurate offers to be created, which helps increase average check, LTV, and customer retention.

3.4 Process automation.

Automating routine tasks such as inventory accounting, payment processing, and customer interaction via chatbots allows staff to focus on delivering quality services. In a highly competitive beauty market, implementing automation helps reduce operational costs and improves the overall efficiency of the salon. Automation systems allow processing customer requests around the clock, providing information about available services, opening hours and current promotions. This makes the communication process more convenient and saves staff time. Inventory management software helps automate the ordering of consumables, which reduces the risk of product shortages. Thus, automation helps to allocate resources more efficiently, reduce costs, and keep operational processes stable.

The use of technology in management also increases business agility. Through analytics and demand forecasting, salon owners can make informed decisions, and technology creates a solid foundation for business growth, improved customer experience and increased competitiveness.

Conclusion.

The beauty salon industry is undergoing significant changes influenced by technological innovations, changing consumer preferences and global economic trends. To ensure sustainable growth and competitiveness, salon owners must adapt to these changes by adopting modern management strategies and technologies.

To succeed in today’s competitive landscape, salon owners must consider the following aspects:

          — An active social media presence, loyalty programs and personalized offers help attract and retain customers.

          — Automating processes such as online booking and inventory management reduces costs and improves service quality. Technology is playing a crucial role in transforming the beauty industry. Implementation of CRM systems in beauty salons helps in improving customer satisfaction and increasing repeat visits.

          — Investing in employee training and development improves service quality and customer satisfaction.

          — Effective cost control and price optimization ensure business sustainability.

To capture the opportunities associated with the projected growth of the beauty industry, salons must employ comprehensive management strategies:

— Advanced marketing strategies based on active use of social media and loyalty programs to help attract new customers and strengthen relationships with regular visitors.

— Operational strategies, such as implementing online booking and automating processes, help improve operational efficiency and customer experience.

— Human resource strategies, which focus on employee development and creating a motivating environment, improve service levels and retain skilled professionals.

— Financial strategies that include cost control and cost optimization.