Industry News

Groundbreaking Study Defines the Booth Rental Market

Stacey Soble | May 7, 2012 | 1:02 PM

How does the issue of booth rental impact you? Chances are, you either rent space or you rent out all or a portion of your business to independent contractors or you work in or own a salon that competes against businesses that do. Depending where fall on this spectrum, the subject of booth rental and how it impacts the overall industry can be a very hot topic, and one that incites some strong opinions.

But how prevalent is booth rental in the U.S, and how fast is it growing? Until recently, that question left most industry leaders making an educated guess.

For the first time, a new study recently released by Professional Consultants and Resources, defines the booth rental market in the United States, including the current different models of booth rental and how companies should market to independent stylists. According to the 2011 PCR Booth Rental Study, booth rentals are already prevalent in 35 percent of salons and by 2015, nearly 50 percent of all U.S. salons will offer some form of the booth rental model.

“While independent artistic salons catering to high-end clients will always play an important role in the professional salon industry marketplace, this business model will continue to lose market share to booth rentals and chain salons,” says Cyrus Bulsara, president of Professional Consultants and Resources. “The most likely outcome will be the evolution of new hybrids that combine the best client- and stylist-centric practices from all three business models.”

The landmark, comprehensive study on the U.S. booth rental market provides an in-depth look into a number of aspects of this fast-growing segment of salons; including detailed analysis, insights, trends, projections and opportunities needed for manufacturers, distributors and chain salons to capitalize on the trend. The study also provides a snapshot of booth rental and its impact on the entire salon landscape. According to PCR, salon industry veterans with more than 50 years of experience in marketing, sales and education collaborated to produce this study.

“The study helps to demystify this exploding growth sales channel by clearly delineating all aspects of the models,” explains Bulsara. “It identifies both challenges and opportunities for all types of salon organizations, as well as for marketing/sales organizations selling to booth rentals. The study also contains a detailed topline analysis of pertinent salon industry data: market size, category size, segment size, channels, salon services data by type and all major trends impacting the salon industry in 2011.”

The report also includes the prognosis for future growth, pros and cons and a detailed review of chain salons and booth rental—a new model for chains to compete against. On the marketing/sales/education front, the study looks at salon industry trade and consumer promotion trends, including distributor promotions, salon and stylist promotions, salon client/consumer promotions, and more with in-depth recommendations. The report details marketing strategies targeted to booth renters and renter salons, including exciting, new Web 2.0 and social media for renters and renter technology tools.

Here’s a preview of findings included in the report:

  • Booth rental salons strongly drive sales at open-line Sally stores. Booth rentals also propel full-service sales at Beauty Systems Group (BSG)/Cosmoprof, Salon Centric and all other distributor stores. Purchasing habits and inventory needs are distinctly different from independents. 
  • Booth rentals continue strong growth in certain regions of the United States. Clients want personalized, private services and move away from the big, older, chain salons. Mid-tier chains are also under pressure.
  • Ratner Co. has made a major move into this arena, with its 17 Salon Plazas, a rental model with more than 550 renters.
  • Booth rentals and high-end independent salons emerged with bold new cut n’ color, bob, pixie and mop looks in 2011, making booth rentals who are more artistic and adventurous strong players in advancing these hair fashion trends for their clients. 
  • Consumers have little-to-no understanding of the inner workings and management of various types of salons and perceive little difference and/or value between the various salon types. They get a consistency of stylist, ambiance and service at booth rentals.     
  • Manufacturers and distributors need a sales/marketing strategy for each group of rental salons/stylists targeted. Strategies and tactics for rethinking packaging, promotional and pricing strategies are suggested. Web 2.0 education needs are also addressed.
  • Booth rental salon stylists now constitute a large chunk of the market and are computer savvy with Web 2.0 and social media.
  • Technology tools such as My Chair App, Salon Booker, Square, Schedulicity, StyleSeat, Vagaro are heavily utilized and can be co-opted. 

CLICK HERE to for more information on the 2011 Booth Rental Salon Market Study, or email Cyrus Bulsara, president, Professional Consultants & Resources, at [email protected]

Originally posted on Modern Salon.

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