Barber & Beauty Shops - Vertical Selling Guide - Verifonezone.com

Vertical Market Selling Guide
Barber & Beauty
Shops

V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Purpose
This guide is provided to you at no charge to create awareness for the needs of a payment terminal
solution within a specific vertical market that may be less penetrated than traditional retail stores.
Table of Contents
� Market Segment
� Market Overview
� Sales & Marketing Insights
� Payment Characteristics
� Market Resources
� VeriFone Solutions Overview
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Market Segment: Barber & Beauty Shops
MCC: 7230: Barber & Beauty Shops
NAICS: 812111/812112/812113: Barber Shops, Beauty Salons, Nail Salons
SIC: 7231/7241: Beauty Shops, Barber Shops
Market Overview
This market segment includes barber shops, beauty salons, and nail salons. Beauty salons account for
the vast majority of the annual industry revenue (85-90%) of approximately $35 Billion. There is a very
important segmentation of this market between the chains (multiple-employee) and the independent
operators, especially as it relates to payments.
The segment consists of are approximately seven hundred thousand establishments belonging to about
six hundred thousand firms. The vast majority of the companies are single owner operated (87%). The
corporate environment is dominated by a few companies that are heavily focused on franchising. The
largest of these companies is the Regis Corporation. Regis operates over ninety-five hundred salons is
the US under such names as Supercuts, Sassoon, Mastercuts, and Regis Approximately seventy-five
percent of these locations are corporate-owned.
The Regis companies, like the other chains, have a transaction mix that is weighed heavily toward
cards. Approximately seventy-four percent of their revenue is card-based. Their average transaction
is $29. Other companies in the business are Great Clips (2,800 locations), Fantastic Sam’s (1,300
locations), Hair Cuttery (800 locations), and Sports Clips (680 locations). These companies focus on
franchising. As franchisors they usually have a preferred payments program through a major
acquirer/processor but most allow their franchisees to select their own provider. For the chain salons
the overall average card transaction is $45, with a range of $17 to $200. The average location has 5.2
employees and $16,000 in monthly revenue ($12,000 card-based).
The non-employee operations show totally different characteristics from the chains. They make up the
vast majority of the enterprises (87%) but only of 42% of the industry revenue. The average individual
bills approximately $1,800 per month. Credit/Debit card use in this market segment is fairly low.
Industry data shows that the average ticket, when a card is used, is in the $45 range and these
transactions make up less than fifteen percent of the total volume.
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Sales & Marketing Insights
The low current penetration rate in the non-employee segment, average transaction value, and the
large number of small operations provide opportunity for mobile technology sales to this segment.
There are two major national/international professional/trade organizations that service this industry.
Neither organization has local chapters. There are also a few independent state organizations in the
US.
The Professional Beauty Association (PBA/NCA) is “the largest organization of salon professional with
members representing salons, spas, distributors, manufacturers, and licensed professional….” It
sponsors an annual convention that features 250 exhibitors, none of which represented the payments
industry at the last show. They provide an associate membership category for industry suppliers. They
also sponsor a membership benefits program that currently offers payment services through Solveras
Payment Systems.
The International SalonSpa Business Network (ISBN) “represents the global voice for the multi-location
salon and spa segment of the professional beauty industry. Our organization comprises the full
spectrum of the industry, high-end to value-priced, salons/spas with thousands of locations to those
with two or three, corporate-owned to individually-owned, franchise companies and their franchisees.”
The organization sponsors an annual meeting that does not include an exhibit. The do offer affiliate
memberships to industry suppliers and provide a membership benefits program which includes card
services.
Payment Characteristics
� Card payments (MCC 7230), estimated percent of total payment volume : 37%
� Estimated average ticket size of card transactions: $45
� Average monthly number of card transactions per establishment: 49
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Market Resources
� Associations
o Professional Beauty Association (PNA/NCA)
� http://www.probeauty.org/nca/
� 12,000 Members
� The International Salon and Spa Expo,
� 2010 exhibitors: 250
� 2011 conference: January 29-31, Long Beach, CA
� Associate membership, member benefits program
o The International SalonSpa Business Network (ISBN)
� http://www.salonspanetwork.org/
� corporate membership
� International, Members own more than 25,000 hair salons and spas
� Annual meeting, no exhibit, supplier forums
� Affiliate membership, member benefits program
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
VeriFone Solutions
Hair Stylist & Groom professionals, especially those with mobile installers who visit clients at
residential and commercial locations, would need to have devices that are portable and can be brought
to the point-of-service. This would allow them to accept card-present transactions which could
significantly lower the current overall payment costs and at the same time offer convenience to the
client. VeriFone offers a variety of wireless communication options for portable devices, including the
new PAYware Mobile for iPhone. See www.verifonezone.com for more information on each solution.
� PAYware Mobile
� V x 610 CDMA
� V x 670 GPRS
� NURIT 8000S
� VeriFone Connect Service
VeriFone V x 670
PAYware Mobile
PAYware Mobile for iPhone allows
for payments to be accepted
anywhere, anytime in a secure
manner via card swipe.
PAYware mobile is a PA-DSS
approved payment application for
iPhone. Accepting credit card
payment via PAYware Mobile
comes with a variety of benefits
including higher security and
increased transaction savings.
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Exhibit 1: State Information
State Total
Establishments - With Employees
Barber
Shops
Hair
Salons
Nail
Salons
Estimated
Other
Alabama 1,006 39 914 53 7,119
Alaska 163 12 137 14 1,153
Arizona 1,389 68 1,221 100 9,829
Arkansas 418 17 393 8 2,958
California 8,266 313 6,121 1,832 58,494
Colorado 1,389 58 1,239 92 9,829
Connecticut 1,715 97 1,424 194 12,136
Delaware 331 18 283 30 2,342
District of Columbia 210 17 176 17 1,486
Florida 6,059 197 5,470 392 42,876
Georgia 2,051 85 1,801 165 14,514
Hawaii 342 31 290 21 2,420
Idaho 267 18 235 14 1,889
Illinois 3,398 109 3,077 212 24,046
Indiana 1,589 50 1,494 45 11,244
Iowa 1,012 32 949 31 7,161
Kansas 856 53 764 39 6,057
Kentucky 799 35 727 37 5,654
Louisiana 875 36 745 94 6,192
Maine 342 4 319 19 2,420
Maryland 1,818 93 1,532 193 12,865
Massachusetts 2,940 103 2,624 213 20,805
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Exhibit 1: State Information (cont.)
State Total
Establishments - With Employees
Barber
Shops Hair Salons Nail Salons
Estimated
Other
Michigan 2,829 88 2,613 128 20,019
Minnesota 1,784 35 1,584 165 12,624
Mississippi 397 11 352 34 2,809
Missouri 1,662 68 1,513 81 11,761
Montana 201 7 188 6 1,422
Nebraska 679 33 618 28 4,805
Nevada 383 19 352 12 2,710
New Hampshire 544 13 504 27 3,850
New Jersey 4,597 299 3,633 665 32,530
New Mexico 359 20 326 13 2,540
New York 7,893 646 5,467 1,780 55,854
North Carolina 1,709 105 1,495 109 12,094
North Dakota 278 7 268 3 1,967
Ohio 3,872 152 3,440 280 27,400
Oklahoma 518 27 461 30 3,666
Oregon 755 28 702 25 5,343
Pennsylvania 5,410 257 4,808 345 38,284
Rhode Island 492 24 453 15 3,482
South Carolina 920 43 801 76 6,510
South Dakota 229 5 218 6 1,621
Tennessee 1,250 35 1,139 76 8,846
Texas 4,660 332 4,052 276 32,976
Utah 515 12 488 15 3,644
Vermont 230 5 217 8 1,628
Virginia 2,624 109 2,273 242 18,569
Washington 1,794 83 1,547 164 12,695
West Virginia 382 17 359 6 2,703
Wisconsin 2,146 92 2,003 51 15,186
Wyoming 154 3 144 7 1,090
Total 86,501 4,060 73,953 8,488 612,119
Percent 5% 85% 10%
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Exhibit 1: State Information (cont.)
State Count Membership
Ohio 206 892
Oklahoma 84 133
ASIS
Chapter Web Site Other Associations
Akron/Canton http://www.asis-akron-canton.org/
Cincinnati Tri-State http://www.asiscincinnati.org/
Cleveland http://www.asis-cleveland.com/
Columbus http://www.asis27.org/
Toledo http://www.asistoledo.org/
Oklahoma City http://www.asisoklahomacity.org/
Tulsa http://asistulsa.org/
Oregon 71 134 Columbia River http://www.crasis.org/
Pennsylvania 200 1,079 Central Pennsylvania http://paasis.wordpress.com/
Rhode Island 32 72
South Carolina 91 232
South Dakota 8 28
Tennessee 141 377
Texas 464 1,804
Greater Philadelphia http://www.phillyasis.com/
Lehigh Valley http://www.asis070.org/
Pittsburgh http://www.asispgh.org/
Providence http://www.asisprovidence.org/
Greater Charleston http://charlestonasis.org/
Memphis http://www.memphisasis.org/
Smoky Mountain http://www.smasis.org/
Ark-La-Tex http://www.asis244.org/
Austin http://www.asisaustintx179.org/
El Paso/Juarez http://www.asiselpaso.net/
Houston http://www.asishouston.org/
North Texas http://www.ntx-asis.org/
Texas Gulf Coast http://www.asistxgulfcoast.org/
Utah 43 106 Salt Lake http://www.asisutah.org/
Vermont 9 148
Virginia 169 1,584
Fredericksburg/Quant
ico
http://www.orgsites.com/va/asis151/index.ht
ml
National Capital http://www.asis-capital.org/
Tidewater http://www.asistidewater.org/
Washington 107 538 Puget Sound http://www.asis-ps.org/
OBFAA - Ohio Burglar & Fire
Alarm Association
http://www.secureohio.org/
OK-BFAA - Oklahoma Burglar
& Fire Alarm Association
PBFAA - Pennsylvania Burglar
and Fire Alarm Association
http://www.pbfaa.com/
SCSA - Southern California
Security Association
http://www.labfaa.com/
Texas Burglar & Fire Alarm
Association
http://www.tbfaa.org/
VBFAA - Virginia Burglar &
Fire Alarm Association
http://www.vbfaa.org/
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
Exhibit 1: State Information (cont.)
State Count
Members
ASIS
hip Chapter Web Site Other Associations
West Virginia 20 73 Central West Virginia http://www.wvasis.org/
Wisconsin 67 306
Wyoming 10 10
Total US 5,998 23,117
Central Wisconsin http://www.asis067.com/ Wisconsin Burglar & Fire Alarm
Fox Valley http://www.asisfoxvalley.org/
Greater Milwaukee http://www.asis-mil.org/
Association http://www.wbfaa.org/
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V E R I F O N E V E R T I C A L M A R K E T S E L L I N G G U I D E – B A R B E R & B E A U T Y S H O P S
© 2010 VeriFone. All rights reserved. VeriFone, the VeriFone logo, and VeriFone products
mentioned in this document are either trademarks or registered trademarks of VeriFone
in the United States and/or other countries. All features and specification are subject to
change without notice. iPhone is a trademark of Apple, Inc., registered in the U.S. and
other countries.
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