The State of the Indoor Tanning Industry
People ask me all the time how indoor tanning salons stay in business. And I give them the same answer: the same way Las Vegas stays in business.
We have been doing business with indoor tanning salons since 1990. While the industry continues to shrink, there are still some 15,000 salons in the U.S.
The manufacturer of Designer Skin, Australian Gold, Swedish Beauty, and California Tan among other brands is the dominant leader with more than a 80% market share. And they want more.
With the "E" word on everyone’s minds, business has been slower than usual. Chains have the capital to ride out the storm but 1-3 store operations are facing a difficult decision: Put more money into the business and ride out the storm or toss the keys to the landlord and walk away.
As in every industry, smart entrepreneurs are stepping in, taking risks, and making it happen. But for those that have seen their annual revenues drop more than expected, what’s the right decision for them to make?
Once again, I will use my social network to get some answers. I know many that tan regularly and I’m most interested in hearing from tanners, ex-tanners or those thinking about tanning.
We have our annual Beach Party coming up November 21 so this will be good conversation for the hundreds of tanning salon owners that show up. Anything that can help is worthwhile.
And in case you are wondering about 2010 new products, look no further than Designer Skin’s new price buster at $117.00 a pop. If you would like to pre-order a dozen or two, let me know!
Happy Tuesday!
September 22nd, 2009 at 2:15 pm
The 2006 State of the Industry Report for the Tanning Industry indicated that there has historically been a 20% attrition rate for Tanning Salons. The 2008 report indicated that the rate has climbed to 30%.
Take into consideration that indicators that consolidation, mergers, buyouts and closures are common occurrences in a maturing market and add not only the current state of the economy but also the health concerns (real or rumored) presented with “tanning.”
The industry needs to go to the next level. To do so, the industry leaders need to not only think strategically, but honestly answer the tough questions.
Is the format changing?
Is the product/service approaching the end of it’s life cycle?
Is this business viable? For how long?
September 22nd, 2009 at 2:58 pm
I think people are scared to tan after the latest health report on it.
September 22nd, 2009 at 3:09 pm
I have read many great aritcles on the area of holistics that proclaim the benifits of vitamin D and it immune system boosting effects This is helpful the fight against the swine flu. I have also read articles about tanning beds producing vitamin D in the skin the same as the sun. It is really interesting.
September 22nd, 2009 at 4:22 pm
I like tanning and will continue to go, I think the key is moderation and education. I do not go all the time but in the winter when it is cold out it feels good to go.
What I think people forget is that indoor tanning is suppose to be a control environment and we the client are trusting the person behind the desk is certified to guide us though a positive tanning experience and their salon is up to date with bulbs/equipment.
I do think salon owners need to adapt to the econ crisis, lower prices and bring in lower price lotions.
GO CTS!!!! I have actually helped Laura get 2 accounts with my so called bad for me habit:)
September 22nd, 2009 at 4:27 pm
I have been in the industry for 15 years and these last few years have been the worst. I opened my first salon in 1994 and until recently had 3 salons. Due to the economy, I have already closed 1 salon and the others are down about 30% in business.
I see the troubles that affect tanning salons every day here at work. People are still tanning, however, they aren’t spending as much as they use to. True many people have stopped tanning but I really think it has more to do with lack of money than bad press. Sure the bad press has not helped, but I think that people can see past the ridiculous reports and see the real meanings. Every industry has a few “bad apples” that negatively affect the whole industry. Then someone from the press will take those few salons and now sudddenly the whole industry is affected by it. This is not fair or correct but unfortunately it happens. It is our job to educate our customers, their customers and the public and the truths.
I love this industry and all of my customers. I spend everyday trying to help my customers become more successful. I truely feel that relationships are the key to success. Of course many customers are concerned about pricing but we all know that they want to spend their money where they are made to feel special or important. Otherwise they will take our business elsewhere.
I am excited about Beach Party and look forward to the new 2010 season.
September 22nd, 2009 at 4:50 pm
I think the SMART salon owners who train, certify and update there equipment are the ones who will survive !! I have large chain customers that don’t train their sales staff properly and they are seeing the affects of this. While my smaller customers that do train properly are still selling lotion and still making money. These are the customers that will survive in 2010.
Price is a big factor when it comes to purchasing lotion for the most part the general public will not buy the $120 bottle of lotion. So in order to be successful salons must carry a wide variety to meet all of their customers needs.
I love this business and my tanning bed in my basement !!
September 22nd, 2009 at 4:55 pm
I have also become a new tan goer. I am pretty much the palest person I know. With the help and support and new knowlegde from Laura I too have a better appreciation and new respect for how tanning works. I used to think I was going to get overly burnt and then be miserable. Having fair skin this was the normal thing that happend after I entered a tanning bed. (I know, I know, your probably thinking why would you go, if you were getting burnt) But this was because I was going in full time with no base to work from, and no one bothered to say hey let’s start this way, try 10 mins and then go up.
I am a very nice golden (very light golden) tan and I am super excited. I have been tanning for the last two weeks about 3 going on 4 visits. I am adding to the increase in sales someonehow and I can say I owe it to Laura.
YEAH CTS!!
September 23rd, 2009 at 10:16 am
Gone are the days of the 80’s! No more just turning a key to a tanning center and having people just rush in. Boy those were the day’s hey salon owners:)
The tanning industry is still alive and thriving for the smart operators. While we have seen salons closures over the past 2 years we have also observed these are the salons searching for price alone. Business has to be more than just price it must be about building your business with the tools necessary to make that happen.
After a season of building history within our new tool to make it happen for our salon owners (SAP) I couldent be more excited for the future. I am currently setting up appointments with all of my partners and reviewing sales comparisons, price points, sales analysis, product mix, the list goes on and on. We are making it a point know your business and move salon owners into the future.
CTS and its’ new capabilities are just a phone call away for all tanning centers. Let us help you make the right decision.
September 23rd, 2009 at 10:43 am
I completely agree with Krisit, Laura, and Kory.
Education, equipment, and knowing your business is the formula for the future. The days of opening a salon without understanding all aspects of the tanning industry are over.
Before new businesses even look for a place, they need to understand all the facts about how the tanning process works (scientifically) and all the benefits. They need to understand and use the skin typing to determine who shouldn’t tan, who should tan and how often. They also need to know what tanning products do and why are they important. They need to understand how to sell tanning products in all price ranges. Finally, they need to understand the difference between all makes and models of tanning equipment (don’t just pick the prettiest or most expensive).
If all the research is done properly and they fully understand all aspects of the business first, then they can worry about where to open a location and work on a business plan to stay in the game.
The most innovative and most educated salons will be here today, tomorrow, and into the future.
I love this industry and so do my salon owners! I look forward to all my opportunities to educate and provide value to my clients. It takes all of us working together to move into the future!
September 24th, 2009 at 2:44 pm
I agree that product & equipment education is key! I have been to many salons and asked salon employee’s simple questions about the products and services they offer, and you can clearly tell they have not been properly trained. Selling is not an easy skill for many, rejection is a hard feeling! In order to help employees build their skill and confidence, owners need to be aggressive about educating their staff, to help increase sales.