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Inflation is on the Rise. How Do Beauty Brands Respond? (Part 1)
-by William Johner
With growing demand for products and supply chain issues inflation will likely continue to climb beyond 2022. Here's the good news: The intersection of hair removal and organic is the perfect place to be in times of recessed dollar.
Traditionally clients have continued to get waxed during high level inflation and recession. Conversely, expenses are only driven up moderately during inflation. This is due to a number of factors not least of which is it is a service requiring little product. Meaning larger margin as long as businesses stay ahead of these costs with typical but not outlandish price bumps. Clients live in the real world and understand prices rise.
Boulevard conducted a survey that “you’re likely to face little if any pushback if and when you raise rates—provided you communicate clearly and proactively.” They went on to say “92 percent of clients are willing to accept a rate increase of some sort before they will consider seeking a less expensive provider. Even more encouraging, 60 percent of clients are willing to accept an increase of at least 10 percent. That’s significant.”
So the idea here is to stay in touch with the rise in prices and act accordingly with moderate price increases rather than stark jumps.
At the same time, organic and natural continue to push upward. Mid to level higher socioeconomic drive pushes a desire for cleaner and better. The methodology reigns supreme here. More on this in the nest blog. (CONT)