2021 Outlook: The State of Franchising in the Hair, Beauty & Cosmetics Sector

Alice Tuffery, writer

Published at 28/02/2021, Updated on 04/05/2022 , Reading time: 5 min

2021 Outlook: The State of Franchising in the Hair, Beauty & Cosmetics Sector — Photo © 2021_outlook_state_of_franchisng_for_hair__beauty_and_cosmetics_sector.jpg

The Covid-19 outbreak has had an effect on almost every business in Britain. Here, we’re taking a magnifying glass to the hair, beauty and cosmetics sector to find out how the pandemic has impacted companies up and down the UK. Keep reading for our 2021 industry outlook.

The hair, beauty and cosmetics sector is one industry to have undergone huge challenges and changes over the past year. While many businesses have been forced to close their doors and struggled without any way of generating income, most companies are looking forward to welcoming back customers in 2021.

The hair, beauty and cosmetics industry in 2021

In December 2020, the Local Data Company reported the permanent closure of 4,578 hair and beauty salons across the UK since the start of the pandemic. Since then, more have been forced to shut their doors for good. According to the British Beauty Council, the hair, beauty and cosmetics industry, which was once worth over £28 billion, will be a third smaller by spring 2021.

Although this news is unwelcome for business owners, the industry has demonstrated an ability to bounce back fairly quickly. For example, year-on-year beauty product sales in China were down by as much as 80 percent in February 2020. But by March, the gap had closed to 20 percent. Some experts put the resilience of the beauty industry down to the low price of many of its products; people see treatments and cosmetics as “affordable luxuries” (McKinsey).

Also, entrepreneurs within franchise networks have reason to feel confident about their future. With the backing of a proven business model and access to expert advice, franchisees have more chance of surviving crises.

Here are a few of the changes to hit the hair, beauty and cosmetics sector in 2020 and 2021:

Fewer people are wearing make-up and fragrances, probably because of the requirement to wear a mask in public places. In fact, ‘prestige brands’ have noticed a 55 to 75 percent reduction in people buying these products (McKinsey).
Consumer focus has turned from cosmetics to skincare, as people spend more time on pampering routines at home.
DIY treatment kits are becoming more popular, as many consumers are willing to try their hand at beauty procedures while salons are closed.
Experts suggest businesses’ e-commerce sales have risen by an average of 20 to 30 percent (McKinsey).
Some businesses have launched sales and discounts of up to 40 percent to shift stock during the pandemic (McKinsey).

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Hair, beauty and cosmetics sector business outlook

By exploring the trends sweeping the beauty sector, experts can predict how the industry will evolve in 2021. There are several key expectations:

The increased emphasis on e-commerce will continue - Brands have adapted and consumers have enjoyed the convenience of browsing products online and getting them delivered straight to their door.
DIY beauty products will become more common - Now people have been forced to do their own treatments at home, they’ve gained confidence and many are likely to continue using their newfound skills to save money. To cater to demand, beauty product retailers should produce more ‘DIY’ beauty tools and kits.
Brands will offer a more personalised experience - Coming out of the pandemic, people will want more from the businesses they choose to support. As a result, we could see an increased focus on delivering a high-quality customer experience.

A lot of people no longer just want to go into a store and pick something from a shelf. They want a one-on-one consultation—whether it’s over Zoom or through an AI-powered app.

– Georgia Louise, celebrity facialist

More businesses will champion ‘multi-purpose products’ - The growing interest in skincare and pampering should bring about a new wave of multi-tasking products, which help people look after their skin while enjoying the benefits of make-up.
People will be more interested in the origin of products - The more aware we become as consumers, the more we will want to know about the ingredients in our hair and beauty products. Businesses prioritising transparency and offering ethically sourced products will be able to earn more customers.

I think the most important beauty and wellness trend will be the customer’s increasing desire to know: what ingredients are they putting on their skin and into their bodies, do they work and why?

– Dr. Barbara Sturm, aesthetics doctor & founder of Dr. Barbara Sturm Molecular Cosmetics

Advantages of running a hair, beauty or cosmetics franchise

Although the social and economic situation may seem bleak, there are still lots of reasons to get involved with a franchise in the hair and beauty sector.

This year, more than ever, there’s a growing effort to build communities and provide real value to the people within them. When you run a beauty or cosmetics franchise business, you can provide a tailored customer experience. Not only will a personalised service give you the chance to build meaningful relationships with locals, but it will also set you apart from your competitors.

Customers want genuine advice, incredible customer service and to feel that you are truly listening to them. This fact will never change.

– Janet Curmi, Vice President of Global Education & Development

As part of the growing emphasis on inclusivity, beauty franchises can be a force for good by delivering products with tangible benefits for a wider slice of society. For instance, you could focus on providing skincare treatments for people who are allergic to certain ingredients, or prioritise vegan and cruelty-free practices.

Also, the pandemic has shown us just how quickly brick-and-mortar businesses can fail if they don’t have the ability to make money outside of their premises. As a beauty franchisee, you can go mobile. While you may not be able to continue operating amid Covid-19 restrictions, you can swerve other pitfalls and generate an additional income stream. Plus, if you join a mobile franchise without physical stores, you can benefit from low start-up costs and enjoy flexibility.

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Franchise opportunities in the hair, beauty and cosmetics sector

You can view the beauty franchises currently looking for new investors right here at Point Franchise. You may also want to check out the top UK businesses in the sector, or read our article: How to Choose a Hair, Beauty or Cosmetics Business That's Right for You.

Point Franchise also has a selection of other informative business guides to help people who are interested in joining the beauty industry with the franchise model. Find out which industry podcasts and magazines you should know about, and read up on the best bits of advice business owners in the sector have revealed.