by

Revenue Management in Nail Salon Industry: selling your time and space

manicure

What is the Beauty & Nail Salons Industry?

A nail salon or nail bar is a beauty services establishment that primarily offers nail care services such as manicures, pedicures, and nail enhancements. Often, nail salons also offer skin care services. There are approximately 9,900 nail salons (2010) in the U.S., up 23% from 2007 according to the “AnythingResearch Nail Salon report.”. (http://www.anythingresearch.com/industry/Nail-Salons.htm) The industry is estimated with a market size (includes all money spent in the salon on the services in the chart at the top right) of 6.6 million dollars in the year of 2011. (http://files.nailsmag.com/Market-Research/NAILSstats11-12.pdf)

Nail salons offer a variation of options for nail care. This includes acrylics, silk or fiberglass wraps, French manicures, polish, pedicures, etc. Some nail salons are offering one-stop beauty services. In addition to nail services, these one-stop nail salons offer facial treatments, waxing, and skin care.
无标题
Nail salon industry could be considered as a very typical industry that could use a lot of revenue management, regarding to : 1) the high fix costs and low flexible costs of producing, 2) the perishability of the inventory, 3) the easiness to control duration,  and 4) the capability to manage demand by pre-selling and fencing rates.

However, based on my research, “time” has been an implicit pricing component for most of the nail salons inside of the U.S., and in most cased, price are still being decided based on techniques and materials applied for a certain service.

Industry Practice  – Pricing Strategies

In the current industry practical, most of the prices are neither defined by space nor time. Instead, the price are defined by the service and material consumed. A widely accepted pricing method in the industry is that the product costs cannot exceed 6% of the service charge. To figure the minimum charge per service, multiply the product cost for each service by 16.5. The figure is the lowest possible price for a service.

For nail salons pricing base on technician, an “85% rule” are commonly accepted. The salon figure station occupancy by dividing hours booked by hours scheduled. For example, if the nail technician is scheduled for 40 hours per week and is pre-booked for 30 of those hours, she has a 75% station occupancy rate. When that technician is fully booked more than 85% of the time, the salon will consider raising her price. (http://www.nailsmag.com/article/92584/the-big-payoff)

  1. Rate fences

Rate fences that have been being utilized in the industry are limited. Some of the nail salons have already started to use last minute deal and early reservation to fence the rates. However, for most of the salons, no rate differences or slight differences will be charged by making early reservation and walk-ins.

The good part is that selling the inventory ahead of the time by making reservations and bookings has already become an industry norm. The research shows that about 40% of the nail salons do not take walk-in businesses. Some salons are also using daily deals to fence their rate to the last minute businesses to spread the demand evenly, such as Polished Nail Salon (http://www.polishednailsalon.net/Special-Deals.html)

 

We can find some of the industry pioneers already moved their feet into the gate of revenue management and try to control its inventory by “selling” time or space, such as Isle Pedi. Even though no specific example was made, it has been said that some of the salons have already started to charge a flat “slot fee” plus an “add-on fee” for the services received. Several examples were selected to reflect the diversity of pricing policies and strategies.

No time component + Mostly Tech oriented

AVALON Hair & Nail Salon (http://avalonhairandnailsalon.com/services.html)

Crystal Nail Salon (http://www.crystalnailsalon.com/pricelist.html)

Partially time + Partially Tech oriented

Gaia (http://www.gaiasalon.com/waxing-and-nails.html)

— Some, especially high end, salons would charge by nail instead of by hand, based on the costs of each nail and provide more variety in design.

Mostly time oriented pricing

The Emerald Door (http://emeralddoorsalon.com/treatments.html)

Isle PediSpa (http://www.islepedispa.com/pedicures.htm)

Demographic component pricing

Berkshire (http://www.berkshiresalondayspa.com/nails)

  1. Potential solutions

People have been trying out new stuff and reaching out beyond the industry to get inspired. I spotted a lot of good practices in setting rate fences, such as by gender and age, which are all very well accepted by the customers. Also some of the salons are taking good advantages of group selling by providing “manicure/pedicure parties” and therefore add more value in the service by providing princess/night club costumes and other entertainment services.

A good example would be Manicure/Pedicure Group Party – R2C Kids Spa (http://rotten2thecorekidzspa.vpweb.com/Party-Packages.html)

0_0_0_0_140_184_csupload_27674951_large

Industry Practice – Define Space and Time

 

Space

  1. Selling space explicitly or implicitly?

Most of the nail salons are selling space implicitly. The price is decided mostly basd on the labor and material spent on a certain service. For example, one customer who received “polish changes” and “Gel” will not pay less than two customers who receive these two services separately, even though the latter requires two “slots” and the former requires one.

  1. Practices to define space and other possible solutions

Normally nail salon would separate the space into: reception desk, waiting area (both for drying the nails and for waiting for the next available tech); manicure area; pedicure area; and massage area/private room. Some, especially high end, nail salons also have retail area.

Among those areas, manicure area, pedicure area, private rooms, and retail area are considered revenue generating areas. To implement revenue management, the salon could define its inventory as “slot” and focus on improve “revenue per slot”, or as “square feet” and define the performance metric as “revenue per sq”.  The latter one makes more sense to me, seeing as it includes the gross booth area into consideration and reflects the overall profitability of the salon.

To divide the space into different layers could be a crucial approach to fence the price and maximize the profit. A higher scale salon requires bigger space for each “slot”, while a bigger “slot” should be charged with a higher premium to compensate the cost of space. As what we applied in restaurant revenue management, the space allocation should be balanced between the functionality and the profitability. Therefore, nail salons should not only divide the space by function, as what most of the nail salons are doing, but also should divide the space by service scales based on its customer mix and needs.
M-na0312profile-purple
One interesting finding is that, catering to the special needs of the “girls’ collectivism”, a lot of nail salons designed conjunction seats. (http://www.nailsmag.com/article/94720/one-of-a-kind-spa-expands-to-three)  As you can find in the picture, this seat conjunction is called “purple princess suite”, specially designed for two girl friends / couple/ parent-kid who would like to share their pedicure time with each other. The conjunction seats not only save space and therefore increase unit space revenue, but also cater to the certain clienteles’ special needs. You will not get one of those hot babies without making a reservation.

  1. Additional revenue generate space


Retail area could constitute a major additional revenue generate space for nail salons. A goal of comprising 15% of the total revenue is realistic for the nail technician and profitable for the salon. (http://www.nailsmag.com/article/92584/the-big-payoff)

For example, Isle Pedi Spa had 2,700 square feet space and allocated 400 square feet to its retail section, which features over 600 different shades of high-end polish to purchase. Also available are candles, bath bombs, nail care products, neck wraps, flip flops, sandals, and all of the salon’s house-blended products. (http://www.nailsmag.com/article/94720/one-of-a-kind-spa-expands-to-three)

Another large source of income could be from gift certificates.  Clients will love them because they’re already packaged nicely so they make great and easy gifts. Gift certificates are the best advertising because they get someone new through the door.

Time

  1. Selling time explicitly or implicitly

Yes and no. Nail salon industry has been selling the inventory ahead by making reservations yet traditionally the industry does not sell its inventory explicitly by time.

  1. Practices to sell time and other possible solutions

As it has been listed above, different practices have been implemented to sell the time. Take Isle Pedi as an example, services around 45 minutes belong to one rate layer while services around 60 minutes belong to another time layer.

Actually, a lot can be done to make the business more profitable once the business owners start to focus on utilizing their limited operation time on hand more efficiently. Therefore, the profitability efficiency can be measured by “revenue per half hour” or “revenue per hour”, whatever the smallest time unit is. By clearly defining and controlling the service duration, the business owners can make accurate forecast and sell the inventory by chunk with prices adjusted by demand. The suggestion is to study the history record made by your salon. How many customers you get by the Day of the Week, and how many reservations you got for each day compare to the walk-in businesses. Then we can implement the hotel room revenue management application into the forecasting and pricing for nail salon industry, to decide how many walk-ins to take, with what rate and alike.
page2-img1
By realizing the significance of the time component in profitability, the business owners can also try to fill up the waiting gap in the process of service to improve the performance of revenue per time unit. A great example would be Le Posh (http://www.salonleposh.com/just-for-her/posh-packages/) As it is shown by the picture, Le Posh is providing manicure service while the clients are getting a perm.

 

However, whether this application is acceptable totally depends on the client tail. In the case of Chi&Ki Sister Nail Salon, they figured that with an affluent clientele, folks would want to slow down and be pampered. However, as it turns out, even these clients are generally on the run. So, Chi has an ad hoc set up for mani-pedis to be done together. But at Ki, comfortable manicure tables were built into the custom pedicure benches from the start. (http://www.nailsmag.com/article/94592/on-the-road-ki-nail-bar-organic-spa-los-angeles)

  1. Explicitly example

Isle PediSpa (http://www.islepedispa.com/pedicures.htm)
4c3cde6222596e68_81055927.preview
Worth to mention, Isle PediSpa did a great job with its pricing structure design.  Everything is derived from a basic “45 min/$38 rate” service. Packages providing different callus work are priced with 5/10/15 dollar premium to the basic rate; also a quick 30 min variety, a kids variety, and a male variety are provided with slight price differences from the basic service; another price layer is the “1 hour” packages that are priced with slight differences around 60 dollars.

Non-traditional Revenue Management Practice in Nail Salon Industry

SophyRobsonNails

  1. Selling the Time and Space in a better way
  • A better rate fences:  providing different booking windows, “good only when combination with”, or time limited deals. An even better idea would be a reservation center that collect all the demand and supply on a single platform, just like expedia.com for hotel industry.
  • Time Range Bookings: Offer some guests the opportunity to receive a reduced rate if they can be flexible with the time they take their treatment.
  • Last Minute Deals: Drive impulse and walk-in business to these times and turn what would have been idle labor expenses into reduced rate treatments.
  • Controlled Discounting:  Instead of charging a premium during the busy times, establish higher prices overall and provide variable discounts.
  • Controlled Availability: Create booking rules to encourage high margin treatments during high demand periods.
  1. Combination Menu

The key to revenue management for nail salon is how to do balance between price, space, and time to be in line with perishable inventory and variable demand. Therefore, as we discussed previously in this article, there could be a lot of combinations of practices to price the time and the space.

A lot of experiments and researches are waited to be done to find out the best practice. Will it be better to sell time explicitly while selling space implicitly? Or will it be better to sell both of them explicitly? The answer may surprise us when it comes to the real world in different market segments and different geographic locations.

2. Concerns of acceptance level and perceived fairness

A “small” nail business could get pretty complex in the terms of pricing. Therefore to find out a way to deliver and explain the pricing structure to the customers is very important. I suggest the business owners to design a menu like the menu in a restaurant: for red curry base, you could have tofu, beef, seafood and chicken with slightly different prices; if you want brown rice instead of white rice, pay extra. In nail salons, we can have 45 minutes base and slightly different priced options; if you want celebrity brand instead of private brand, then pay a little bit of extra.

Also, charging the customers by the space they take still sounds a little bit avant garde. It may raise the complexity of the pricing structure and hard to acquire acceptance from customers. Customers in a restaurant will be outrageous if they were asked for a “slot fee”, a “food fee” and a “service fee”. What we can do is to provide customers bigger and more comfortable chairs/sofa only when they choose to purchase a longer service and/or more expensive services, until the perceived fairness of being charged by space raised to a safe threshold.
fashion-gorgeous-manicure-tips


13,231 thoughts on “Revenue Management in Nail Salon Industry: selling your time and space”

  5. Çalışma, Sosyal Hizmetler ve Aile Bakanlığının ilgili kuruluşu olan Mesleki Yeterlilik Kurumundan 08.08.2017 tarihinde (MYK) yetki alarak İnşaat, Ticaret, İş ve Yönetim, Ulaştırma Sektörlerinde Uluslararası geçerliliği olan Mesleki Yeterlilik Belgesi verme konusunda yetkilendirilmiştir.

  9. Just desire to say your article is as amazing. The clearness in your post is just great and i can assume you’re an expert on this subject. Fine with your permission let me to grab your RSS feed to keep updated with forthcoming post. Thanks a million and please keep up the gratifying work. Prospect derby road

  10. Hiya, I’m really glad I have found this information. Nowadays bloggers publish only about gossips and net and this is actually annoying. A good website with interesting content, that’s what I need. Thanks for keeping this web-site, I will be visiting it. Do you do newsletters? Can’t find it. 로즈카지노 주소

  11. Once i figure this out submit. I am sure Folks suit a lot of exertion in making this kind of submit. Now i’m thinking about your task. acim

  13. Council of Higher Secondary Education, Odisha (abbreviated as (CHSE O) is a Board of Education imparting Senior Higher Secondary (Plus Two) for Public and Private Colleges under the State Government of Odisha. Odisha Plus Two Blueprint 2024 CHSE Odisha Conducts Plus Two Exam in the Streams of Arts, Science, Commerce, and Vocational Education. Odisha Plus Two Blueprint 2024 will be Released by CHSE, Odisha, Students to Understand the Difficulty Level and the Exam Pattern of the Exam, Odisha Board Plus Two Marks Distribution 2024 Find in This Article the Odisha Board 12th Marking Scheme to Download and Solve for Practice.

  15. Normally I do not read article on blogs, but I wish to say that this write-up very forced me to try and do so! Your writing style has been surprised me. Thanks, quite nice article. Woah! I’m really enjoying the template/theme of this website. It’s simple, yet effective. A lot of times it’s challenging to get that “perfect balance” between superb usability and visual appearance. I must say you’ve done a fantastic job with this. Also, the blog loads super quick for me on Opera. Outstanding Blog! I just wish to give a large thumbs up for your wonderful data you’ve got right here on this publish. I’ll be coming back again for your website for a lot more quickly. 메이저놀이터

  18. Spot on with this write-up, I actually think this website needs far more consideration. in all probability be once more to read far more, thanks for that info. laser engraver

  20. Jharkhand 7th class Various Textbook 2024 Provide in School Wise Free Distribution in Government School, Jharkhand High School Various Class Complete Students Do not Waste Summers Holidays, Download Jharkhand Class Book 2024 Regular Practice new Lessons for Students Best idea Students Method.Jharkhand Class Textbook Download Available Official Website, Our Portal Provide SCERT Jharkhand 7th Class Books 2024 Jharkhand High School Books 2024 Download, Hindi Medium, English Medium and Urdu Medium Textbooks, Other Study Materials are Proclaimed in the Online mode, Jharkhand Secondary Education Students can Download Textbook for Additional uses.Jharkhand Board has Adopted the NCERT Textbook and Syllabus for High School Education in the State.

  24. I simply must tell you that you have written an excellent and unique article that I really enjoyed reading. I’m fascinated by how well you laid out your material and presented your views. Thank you. Aniwatch

  25. Just since the blogs cover each number of topics, they have become a quality source of hyperlink for several online resources. An effective comment for just a site encourages somebody to add your website link into the other ?nternet site. By indexing links from weblog remarks you possibly can draw immense attention with your internet site. Youtube to MP4 Converter

  27. พนัน esport
    แนวนี้เป็นเกมส์ที่เหมาะกับทุกเพศทุกวัย ไม่ว่าจะเป็นสตรี หรือ เพศชาย เป็นเกมส์ที่มีการแข่งอีกทั้งในแบบโทรศัพท์มือถือ รวมถึง PC โดยเกมส์ที่มีการชิงชัยระดับ Esport มีดังนี้ Dota2, Rov, League of Legends

  28. I am writing to let you understand what a extraordinary discovery my cousin’s daughter had going through your web page. She realized a lot of details, including how it is like to have a wonderful helping style to have certain people without problems gain knowledge of a number of grueling matters. You really surpassed her expected results. Many thanks for giving the helpful, healthy, revealing as well as cool tips about that topic to Evelyn.
    안전놀이터

  29. EVERYONE in the family Priority number one. We’re small-scale, in-home breeders. We’re not a facility or a kennel; we’re a group of Pug enthusiasts who are utterly smitten with our adorable kids. Perfect House of Pugs is just breathtaking! Our Pugs have the best temperaments and personalities. They are created specifically for families looking for a high-quality Pug puppy.

    With over 18+ years, we have fought for only the finest standards, with our Pugs’ health as our primary emphasis, which is why we put EVERYTHING into it, never cutting corners, always changing, and always improving. Our children are our greatest source of pride and delight. Our mission is to build connections (rather than merely sell puppies) and to bring pleasure and joy into your household. We are raising a Pug family and are certain that these puppies will become an integral part of your life.

    PLEASE VISIT OUR WEBSITE LINK BELLOW FOR MORE INFORMATION ABOUT PUG PUPPIES.

    PUG PUPPIES FOR SALE UNDER 500 NEAR ME

  30. Punjab School Education Board (PSEB) is Going to Condected 6th,7th, 8th 9th Class Exam Start in Very Soon, PSEB is a School board based in Chandigarh, India. It was founded in 1969 under a legislative act of the Government of Punjab, Students who wish to be Successful in any Examination Should have a Thorough Knowledge of the All Subject, 6th,7th, 8th 9th Class Students who are Looking for Punjab 6th Class Question Paper 2024 Last Year Exam Paper can pay a visit to this Website. where we have Compiled the Punjabi Version of PSEB 6th,7th, 8th 9th Class Sample Paper 2024, Provided will give the Students an insight into the Exam Pattern will help to make the Students more Confident to face the Exam, PSEB 6th, 7th, 8th, 9th class Question Paper 2024 has been Uploaded here for Candidates who are in 6th, 7th, 8th, 9th class of Punjab Board Preparing well for SA, FA Examination 2024.

  32. Yes i am totally agreed with this article and i just want say that this article is very nice and very informative article. musang4d I will make sure to be reading your blog more. bingo4d Bagian yang bandit4d paling menguntungkan dari kasino online adalah Anda mendapatkan kesempatan untuk mendapatkan uang besar

  33. I keep listening to the rumor lecture about receiving free online grant applications so I have been looking around for the top site to get one. Could you tell me please, where could i acquire some? flamenco

  35. The last I checked on this topic was very some time back. I am much more into Cheap SEO. Nonetheless, fascinating post and I’d check back again soon and get myself much more updated. Shop Strip out

  36. I discovered your blog site on the internet and appearance a few of your early posts. Keep in the excellent operate. I just now extra your Rss to my MSN News Reader. Seeking toward reading a lot more from you at a later time!… 안전한홀덤사이트

  37. Navigating DUI Defense: Your Comprehensive Guide to Finding the Best Attorney Near You

    Introduction

    If you’ve found yourself facing charges related to driving under the influence (DUI), it’s crucial to secure the right legal representation to ensure DWI lawyer near me your rights are protected and your case is handled properly. In this article, we’ll explore the importance of finding the best DUI attorney near you and how the website DrunkDrivingDefense.com is an invaluable resource for those seeking expert legal assistance.

    The Need for a Skilled DUI Attorney

    Being charged with a DUI is a serious offense that can have far-reaching consequences, including fines, license suspension, and even potential jail time. Navigating the legal intricacies of DUI defense requires expertise, experience, and a deep understanding of local laws. This is where a reputable DUI attorney comes into play.

    Keywords and Their Significance

    The keywords associated with DrunkDrivingDefense.com, such as “DUI attorney near me,” “DWI lawyer near me,” and “top DUI lawyers near me,” are strategically chosen to help individuals quickly locate experienced legal professionals in their area. These keywords not only optimize search engine visibility but also reflect the urgent nature of finding qualified representation during such challenging times.

    Exploring DrunkDrivingDefense.com

    DrunkDrivingDefense.com stands as a pioneering directory, boasting a legacy as the oldest driving while intoxicated directory in the USA. The website’s dedication to DUI, DWI, OWI, OVI, and OUI defense underscores its commitment to providing specialized legal assistance in this complex field.

    Why Choose DrunkDrivingDefense.com?

    Comprehensive Nationwide Coverage: DrunkDrivingDefense.com offers access to a vast network of attorneys across the United States, ensuring that individuals can find legal help in virtually every state.

    Focused Expertise: DUI cases demand a specific set of skills and knowledge. The attorneys listed on the website specialize in DUI defense, ensuring you’re working with professionals who understand the nuances of these cases.

    User-Friendly Interface: The website’s user-friendly interface simplifies the process of locating an attorney near you. By entering your town or county, you can quickly find a list of suitable lawyers who can assist with your case.

    Toll-Free Assistance: In addition to the online directory, DrunkDrivingDefense.com provides a toll-free number (1-888-839-4384) that you can call for personalized guidance. This service ensures that individuals receive immediate assistance and can make informed decisions about their legal representation.

    Conclusion

    When facing DUI charges, securing the right legal representation is paramount to achieving the best possible outcome. DrunkDrivingDefense.com stands as a reliable and longstanding resource for individuals seeking specialized DUI, DWI, OWI, OVI, and OUI defense attorneys. By utilizing this comprehensive directory and its array of keyword-specific search options, you can swiftly connect with skilled lawyers in your area who possess the expertise needed to protect your rights and navigate the complexities of DUI cases. Remember, your future is at stake—choose wisely, choose DrunkDrivingDefense.com.

  39. I just now today wish to describe i always has been refreshing to be able to website as well as without doubt desired your blog website. Probably I’m concerning to search for your internet site. Folks undoubtedly contain exceptional activities. Finest desires designed for offering with us your internet site. course in miracles

  41. It took me almost an hour to get this blog in front of me. Its really a good informative article post. Being a travel pro and one of homewatch caregivers I love to explore these places a lot. Keep uploading these informative article post.

  42. E-ticaret dünyası, gelişen teknoloji ile birlikte büyük bir dönüşüm yaşamaktadır. Bu dönüşümde önemli bir rol oynayan Amazon, milyonlarca ürünün alım satımının gerçekleştiği devasa bir platformdur. Bu platformda başarılı olmak isteyen satıcılar için, Amazon yazılımları ve online arbitraj eğitimi kritik bir rol oynamaktadır.

    Web Sitesi : https://www.atlasamazonyazilimlari.com/

  43. E-ticaret dünyası, teknolojinin ilerlemesiyle birlikte büyük bir dönüşüm yaşamaktadır. Amazon gibi devasa platformlar, satıcılar için geniş bir müşteri kitlesi ve büyük fırsatlar sunarken, rekabetin de arttığı bir alanı temsil eder.
    Kaynak : https://www.atlasproinventory.com/

  44. Zeytin çırpma makinesi, zeytinlerin dalından ayrılmasını ve işlenmeye hazır hale gelmelerini sağlayan bir araçtır. Bu makine sayesinde zeytinlerin sapları kolayca ayrılır ve daha sonra yağ üretimi için hazırlık yapılır. Zeytin Çırpma makinesi, manuel iş gücünün yerine geçerek daha hızlı ve verimli bir şekilde çalışmayı sağlar.

    Kaynakça : https://www.polatstore.com/

  45. Zeytin çırpma makinesi, zeytinlerin dalından ayrılmasını ve işlenmeye hazır hale gelmelerini sağlayan bir araçtır. Bu makine sayesinde zeytinlerin sapları kolayca ayrılır ve daha sonra yağ üretimi için hazırlık yapılır. Zeytin Çırpma makinesi, manuel iş gücünün yerine geçerek daha hızlı ve verimli bir şekilde çalışmayı sağlar.

    Kaynak : https://www.polatstore.com/

Leave a Reply

Your email address will not be published. Required fields are marked *