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