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Leonard Lauder, CEO of Estée Lauder, called it “lipstick effect” — an increase in demand for small luxuries in times of economic uncertainty. The premise behind this phenomenon is that when people are under greater stress, beauty and self-care rituals offer a type of psychological comfort.
McKinsey even reported, increase in demand for skincare and wellness products during the pandemic. So with fears of economic slowdown Couldn’t the same principle apply to cheaper alternatives to surgery, similar to a tummy tuck?
One of the most recognizable dermatology brands in the United States, LaserAway, has expanded to over 120 locations and reports that the industry is growing in America at a rate of over 20% per 12 months. CEO Scott Heckmann says that LaserAway experienced “strong years” in 2008 and 2020 despite the recession. He attributed that in part to patients moving away from dearer providers similar to plastic surgeons and dermatologists.
As CMO of Vagaro, a wellness software provider, I’ve seen it firsthand: so many people are forgoing surgical procedures in favor of noninvasive options like body contouring, which are now possible because of advances in beauty technology. They’re simply more accessible and less overwhelming. I need to delve deeper into LaserAway’s rise as an industry barometer because it has learned three lessons that would help other beauty brands hedge their bets on recessionary growth in unpredictable economic climate.
1. A changing market is a good market
When clients entrust the clinic’s practitioners with something as delicate as their bodies and faces, being very transparent about what the procedure involves is key to credibility. LaserAway’s social media features videos of real people, real nurses, real treatments, and basic plots—in essence, these procedures are designed to assist people find their confidence.
Giving people a realistic picture of likely outcomes also ensures they are more more likely to be satisfied with their treatment. Internal data from our market shows, increasing demand for these non-invasive aesthetic treatments. Over the past five years, we have seen an average annual growth of 24% for recent medspa businesses on our platform.
Technology has been a key factor. While plastic surgeons have a very limited audience at a high price, medspas offer a myriad of services that open doors to a large market — including a growing variety of men. In fact, skincare it is 45.6% global market for men’s care products (value $85.2 billion in 2023) as old stereotypes about masculinity give technique to self-care among younger generations.
2. Diversification builds resilience
In many industries, brands have to be area of interest in their product or service. But medspa chains like LaserAway, Sculpt MD and Sono Bello can proceed to sell a range of services while maintaining expertise in each area. This diversification is really essential because it attracts repeat customers and increases revenue. Once people have tried body contouring, they’re more likely to come back. It’s the same with Botox.
On our platform, we found that medspa firms offer an average of 47 services. Having a balance of higher- and lower-value offerings like this is a great strategy for maintaining a regular income in the face of economic fluctuations, as people treat treatments as an ongoing investment in their well-being.
Technology with built-in payments is also a key feature in helping people pay for all kinds of treatments. Many consumers select non-invasive treatments because they supply the same results as surgery but do not have to deal with a long recovery period.
However, the “pay later” option can make these treatments financially viable. But getting people into the office doesn’t require aggressive selling, because consumers are more savvy than ever about what they need and expect.
3. The power of commands
All beauty firms need to acknowledge that the traditional sales model has evolved after first engaging customers through various digital and marketing channels. The pandemic has been a big push for digital influence, but people now wish to be touched by using real case studies, somewhat than feeling like they are being “sold.” Hence the role of influencers.
We can now assume that once people have researched a product or service online and done their very own research, they are already warmed up. For me, it is only once I have verified that a company has authority and integrity that I’m willing to refer to the seller. The demand for more authenticity only reinforces the concept that the biggest selling point in the beauty and wellness industry ought to be referrals.
It shall be interesting to see how firms move toward these recent expectations of how consumers wish to be impacted by sales. This is very true because they already do so much right, similar to an onboarding process that guides patients in selecting a treatment, goal areas of the body, variety of treatments received, and age. This form of data can inform an appropriate treatment regimen and be used to predict consumer trends and further build credibility.