Y2K Trends
Questions Abound As We Enter The Millennium
by Scott Hoover
The myriad of questions facing the indoor tanning industry is mind numbing. As 1999 comes to a close, the tanning industry seems to be steadily growing. Equipment manufacturers continue to build larger, more efficient and economical units that tan customers faster and better. The maximizers and bronzers being manufactured by lotion companies also continue to surpass all expectations. Still, despite industry innovation, questions abound. A number of federal agencies as well as mainstream media continue to campaign and threaten the viability of the indoor tanning industry.
So, what is in store for the industry in 2000 and beyond? LOOKING FIT asked an array of industry veterans for their views on the state of the industry and the future of indoor tanning.
John Alexander
Vice President of Marketing and Sales
Supre, Inc.
I think there are several industry trends taking place in the indoor tanning industry, with the professionalism of the industry changing, mega-salons on the rise and more distributor and salon acquisitions taking place.
Owners of the mega-salons are professionals that see a thriving business and have come on board in the past couple of years to become strong role-models in the salon industry. They are operating these businesses with an added air of professionalism and knowledge. This growth also encourages franchising, as more and more entrepreneurs take the franchiser role to turn one small salon into a multi-store concept.
Distributor and salon acquisitions will become more and more prominent in the future. As these acquisitions are made, the salons or distributors also become more professional, adding capital and plans to create a healthier indoor tanning industry that will continue to thrive.
Other trends taking place include tanning equipment becoming more advanced, with salons taking advantage of this technology. Some of the mom-and-pop salons may go by the wayside; however, as a whole, the business is evolving to become a professional service. Salons are diversifying, offering other services in their businesses so the so-called "tanning season" now stretches into the summer months to create a more lucrative fiscal year. Services, such as nails, pedicures, etc., will become stronger, with salons seriously becoming involved in the bath and body business to increase profits.
Many distributors now focus on a limited line of lotions, instead of carrying every lotion line available. Distributors no longer have the time or the money to try to carry every lotion line on the market. The future will have distributors focusing on the top four or five lotion lines to develop plans that implement higher sales and profits. In response, many lotion companies have added products to their lines, including bronzers and moisturizers.
Bottom line, the more successful salons and distributors will orient themselves to become more professional and fine-tune their business skills for the new millennium. Add diversification to this formula and the industry holds the key to success nationwide. Plus, the added benefit of being involved in a fun business makes it all worthwhile.
Ronnie Allen
President
Four Seasons Sales and Service, Inc.
One of the main trends Four Seasons has seen in the indoor tanning industry is mega-salons opening with 25 beds or more. In addition, the market also is more professional and strategic in its development, as the owners of these salons become more interested in learning everything they can concerning indoor tanning and the proper way to run a business.
Larger, more complex tanning beds with 40 or more lamps also are becoming popular in the industry, enabling salons to increase the price per session on certain units. Four Seasons also expects to see the introduction of some very sophisticated equipment in the future.
General acceptance of indoor tanning also is increasing. In the fast-paced world we live in, indoor tanning is quicker and more convenient than tanning outdoors. However, with more salons opening nationwide, more states will look to regulate the tanning industry, although, as long as the regulations are reasonable, state agencies may be a positive change for the indoor tanning industry. It could help assure salons will be run in a professional manner.
Indoor tanning is increasing every year, and the number of male tanners also is increasing. Hopefully, this trend will continue to provide a great opportunity for growth in the tanning salon market.
These trends are creating a very competitive world for the manufacturing industry as well as for the tanning salon owner. Each manufacturer is trying to make the most desirable bed on the market, and each tanning salon is trying to provide the most professional and efficient service for their customers. This simply is the free-enterprise system at work encouraging us to do our best, as well as to support the salon owner's needs.
Growing acceptance of indoor tanning has increased the demand for professionally operated commercial salons, a market that can only expand in the new millennium. These salon owners are demanding more distributor support and manufacturing creativity in services and products being introduced into the marketplace.
Recent formation of the Indoor Tanning Association is indicative of all the levels of participation coming together to promote strategic growth and education in the industry.
Roger Brown
President
puretan International
This has been an exciting year in the indoor tanning industry. The most exciting aspect is the growth in salon ownership by people who never considered starting a business. These individuals, striving for the American dream, come to the marketplace with a great deal of business acumen. They demand the best equipment at a reasonable price, which is what puretan is all about. New customers require manufacturers and dealers of indoor tanning systems not only to provide the best equipment at the most favorable price, but also provide training and support in all aspects of the business. For the companies that furnish the right idea and show owners the correct manner to generate profits, the market will remain wide open.
puretan International sees the tanning industry dramatically increasing over the next five years and believes salon owners will want and need the correct tools to keep a business successful. Owners must have an avenue available to obtain relevant information from tanning system importers, dealers and manufacturers as well as be able to rely on the validity of the information. All entities in the indoor tanning industry must come together to embrace the information age in the new millennium if our industry is to have sound future.
It also is important for salon owners to maintain a smooth running operation, designing the store around potential clients. Not every salon should be designed around a specific formula; demographics play a major role in any new business, and the tanning industry is no different. Build-out designs, electrical, air conditioning, interior decor and how a salon is marketed all play an integral part in the overall experience of clients.
puretan works with the future in mind. Innovations in design, functionality and performance all are things that make puretan International the choice of "tanners" worldwide. Factors and plans are in place to allow the company control over prices without losing quality or integrity in the systems. Business is progressing at a rapid rate, with quality and service factoring into the success.
Gene Charette
Chief Executive Officer
Sun Capsule/CMC, Inc.
Over the past few years, the indoor tanning industry certainly has evolved from the small salons with four or five 24-lamp beds to the "Blockbuster" mentality of 25 to 40 units with a nice mix of beds and booths having anywhere from 30 to 60 lamps.
I believe the biggest change in the industry over the past five years has been the shift to vertical tanning equipment, thanks in no small part to the revolution caused by the Cosmolux VHR sunlamp. It is fair to say that Sun Capsule was one of the first to recognize the lamps' potential and begin the shift. Five years ago, there only were two vertical tanning systems on the market. Today, it is hard to find a manufacturer who doesn't offer some form of vertical tanning.
I don't know how this trend has affected the industry as a whole, but it has been very exciting for Sun Capsule. It has energized our company to come up with new designs and concepts. However, these concepts probably never would have happened without our competition pushing the company to the next level.
The next 10 years? Twenty years ago when my father and I built the first Sun Capsule, I figured I would be lucky to get five years out of this "fad." Now, 20 years later, I find myself in a very mature and stable industry. I think the size of the equipment has all but reached its practical limits, both in number of lamps and speed. I think the future belongs to those who can include value-added support to their customers.
The tanning industry is a relatively small universe, so it is important to build strong relationships with customers. The days of the hit-and-run artists are over. By helping customers to become more successful and sharing the years of marketing experience we possess, the industry will continue to grow at an even healthier rate than before.
Cal DeLano
Vice President
Dr. Kern
At the salon level, I have noticed some significant changes in the way business is being conducted in just the last few years. As the indoor tanning industry has matured, the operators of retail stores have gained valuable experience in the areas of business operations. The difference is most notable in marketing activities, customer service and financial planning. Salon owners who have had the opportunity to be in business for several years have learned to reap the benefits from the trial and errors produced during the early years of start-up.
At the same time, new salon operators from other industries who already possess strong business backgrounds, financial capabilities and other resources are entering the business. Examples of these changes can be confirmed by observing the types of new salons popping up. Most have a larger number of beds, many of which are high-performance. In addition, more money is being spent on the finish-out and furnishings in the interior design of the salons. Education and customer service also has been prioritized since it has been proven as an effective method for retaining customers. Finally, salon owners also have become better financial planners, thus avoiding the cash flow pitfalls that hinder many seasonal businesses.
All of these changes have a positive effect on the industry. It helps to promote indoor tanning as a reputable, legitimate product to consumers. It also has helped salon owners gain more acceptance from financial institutions and other business operators.
In the area of manufacturing and distribution, there also have been some significant trends. By developing new technologies and products, manufacturers of equipment, lamps and lotions have continued to raise the bar in order to forge into new territories. This is evident simply by recognizing that today's consumer has more products and options to choose from than ever before. In order to stay competitive at the retail level, salon operators have been forced to carry multiple lines of products covering several price ranges. This is where the importance of education kicks in. With so many new and interesting products to choose from, the risk is that the consumer could be left confused or dissatisfied if not properly informed.
At the rate the industry is evolving, it is very difficult to predict what will be happening 10 years from now. If we look at our neighbors in Europe, we can pick up on several possible changes that might occur. I am a firm believer in the fact that if we expect the industry to thrive, we must continue to push for more education and a positive public awareness campaign. This only can be accomplished if we have participation at all levels. Governmental regulations and a negative public image could deliver a very damaging blow to the industry if left unchecked. This is the primary reason for the recent formation of the ITA. Aside from the ITA, every single one of us involved in the industry can have an impact simply by being educated and conducting our businesses in a professional manner with a solid code of ethics. Over the next 10 years, this could determine whether or not the indoor tanning industry flourishes, or ends up being regulated to the point of nonexistence.
Cindy Demetras
Sales Consultant
TanAmerica
In the upcoming years, the predominant trend in the indoor tanning industry will be professionalism. With manufacturers diversifying the product line, distributors offering more choices and salon owners passing on information and improved products to their customers, the indoor tanning industry as a whole will get a professional make-over.
In addition, salons will start offering customers a choice, catering to all needs and wants with lines of low-, medium-, and high-pressure beds as well as a wide array of lotions and products that can, and will, add to the profit margin.
Competition will be fierce. However, by having diversity within the salon in addition to the improved training for salon owners and managers and information from the product lines, the indoor tanning industry should become a viable industry in the new millennium.
Ken Dion
President and Chief
Executive Officer
Power Tan Corp.
The number of tanning salons increased 8 percent in 1999 from 1998 according to the American Business Lists. Tanning bed sales have increased substantially, as well as the number of beds per salon. There are more franchises available today and larger multi-bed locations expanding here in the United States, as well as worldwide.
Profit from lotion sales has substantially increased for salons, with more and more salons are reporting to us that retail sales of lotions are reaching up to 35 percent of their total revenue generated.
We believe that this growth trend will continue. We also believe that tanning salons will add additional services such as nail technicians, aestheticians, and other related services. I see the business growing as more and more sophisticated business people witness the potential of higher volume and stronger returns on their investment. Based on the response we are receiving from our new packaging, we hope to double our business this year and we look forward to a great season ahead.
Tom Gaydos
Sales Manager for Tanning Products
EG&G Voltarc
Super salons, state-of-the-art tanning lamps and tanning equipment, break-even analysis and demographic research have become part of today's industry dialogue. During the 1970s and 1980s, most suppliers of tanning products as well as salon owners would have said some of these words were from futuristic space novels.
The flood of quick-buck profiteers in the `70s and early to mid `80s have left the industry, replaced by business owners and managers well-versed in calculating their operating costs, forecasting profits, doing inventory control and studying and meeting the needs of customers.
In past years, salon owners and managers asked our industry for help in these areas of business, but were turned away. Today, via trade shows, trade journals and suppliers, many forms of business training are available and there lies the basis of our industry's stability and future growth-education.
Suppliers, trade journals and trade associations must work toward one goal--educate the industry's front line troops, salon owners and managers, who fight to obtain the consumer's disposable income and confidence.
In this ego-driven vanity industry, educating the salons and listening to the consumer's needs were unheard of in past decades. Today's suppliers and salon owners realize that to survive in this very competitive industry both actions are very necessary. Today's suppliers tweek specifications to consumer demands, prepare training manuals and hold seminars about the art of selling for a profit. Education is the key.
In the past, suppliers and salon owners, as short-term, quick-hit investors, were not concerned about the consumer's knowledge of responsible indoor tanning. Today's suppliers, salon owners and trade journal publishers understand the need to communicate both the necessity and procedures of responsible tanning to the consumer. Again, education is the key.
The trends of bigger and faster tanning equipment, more powerful tanning lamps that have pretty colors when lit are of no value to the indoor tanning industry unless manufacturers train and educate the salon owners in the proper use of the products. Profitable growth in the next 10 years is there for those who understand that an industry taking the time to educate its consumers is one that rapidly gains respect.
Larry Gaynor
President and Chief Executive Officer
The Nailco Group
The industry is becoming more fashion-forward through more eye-catching packaging and lab-driven products. Companies are developing unique marketable ingredients to justify the higher price tags on new products. In addition, packaging also has become superior to justify higher prices.
Companies also are realizing there is a lot of business in the value product sector. Look for almost every major line to have a value brand. The cost of business continues to rise and competition remains fierce. Distributors are starting to consolidate to make a profit when selling products. The big brands are taking over as well, with fewer people introducing new lines just for the sake of introducing a new line. No one is interested in spending money to develop a niche line to compete against the big brands.
The industry went through a tough period during 1996-97 and has slowly rebounded. Even with all the negative press, the industry has proven to be resilient and that it is here for the long run. The trends are an evolution of a changing industry. The companies that survived the tough period and invested heavily in the past two years are the ones leading the evolution. That has made the cost of entry into our industry, even for an existing salon owner, rise dramatically.
Trying to predict the next 10 years is impossible. Amazon.com is less than three years old but has changed the face of retailing forever. However, over the next couple of years, I see the industry continuing to do what it does best--weed out the weak companies and salons to build strength with superior customer service, products, technology and consumer awareness. The next season looks very strong, and companies should be able to ride the curve up for a few years with the industry in better shape five years from now than they are today.
Harry Hardin
President
Insurtec, Inc.
The indoor tanning industry continues to maintain a pace of steady growth in the 10 percent to 15 percent range. However, the areas of growth and reasons for growth have changed immensely.
Insurtec sees growth at both the smaller multi-service salon niche and the upscale, larger salon, while the number of medium-sized salons remains steady. The multi-service salon, salons that do hair, nails and skin services as well as related industries that provide tanning, such as health clubs, day spas, health food/nutrition stores and oxygen bars, are enjoying growth from customers who want to get everything done by stopping at one place. Other outlets, such as travel agencies, video stores and apartment complexes are starting to realize the opportunity presented by indoor tanning and are offering the service as well.
Upscale salons that offer not only more tanning units, but also a large variety of equipment to satisfy the tastes and tanning times of a larger clientele also are growing in popularity. There is a trend across the entire industry of salons to update equipment to better serve their clientele.
Insurtec believes that in the new millennium, health and safety will become a reason to tan instead of a reason to avoid tanning. Skin and breast cancer prevention, vitamin D absorption and osteoporosis avoidance as well as mental well-being and stress reduction will play an important role in the indoor tanning industry, becoming just as important, or even more important, as an attractive appearance.
As a final prediction, Insurtec believes time and service will play important roles in the years to come. Getting the perfect tan in a few short salon visits vs. hours spent sweating on a crowded beach is on the mind of anyone pressed for time. However, the buy-in-bulk, save-a-minute consumer of today is changing to a value- and service-minded consumer of tomorrow. Prompt, knowledgeable and friendly sales staff in addition to clean rooms, flexible scheduling, product availability and pampering will be some of the keys for success in the next millennium.
Wanda Hartz
Regional Sales Director
Body Drench, A Styling Technology Corp. Brand
Indoor tanning has been given a very definite direction: to satisfy the active individual with healthy alternatives for tanning. Total skincare has become a necessary requirement for a healthy glow and a wholesome looking tan. To satisfy this need, the industry has grown beyond standard tanning sessions and begun producing high-quality products that address a head-to-toe skincare regimen. The body care products now available from Body Drench, for example, go far beyond the tanning experience to include indulgent, spa level skin conditioning products. Education, of course, continues to be very important, not only to the salon owner, but to the consumer as well. As the public has begun to understand the advantages of a controlled tanning environment, a positive attitude toward alternatives to UV over-exposure has emerged.
These trends have opened up a limitless market, satisfying not only the tanning enthusiast, but anyone interested in a holistic approach to an active lifestyle. The retailer now can profit from products that produce desired results relating to a customer's tan, self-concept and level of confidence.
Technical advances in product formulation will continue over the next decade allowing the industry to research, evaluate and pursue any information desired. As the technology of sunless tanning and controlled environment tanning progresses, the industry will grow to attract customers who never before considered using tanning products.
Tom Henkemans
Founder and President
ProSun Tanning Industries, Inc.
The industry has continued to show growth in several areas over the last few years, and these trends will accelerate in 2000. The first major trend is multi-location salons, benefiting the industry by incorporating a proven success formula of combining a better-educated staff with the most advanced technology available. Smaller salons, offering varied services, will continue to profit; however, they will be forced to utilize bigger, more sophisticated equipment to attract and keep customers.
I also believe that data concerning our industry must be improved. At present, numbers supporting skyrocketing growth must be carefully analyzed. As more companies enter the market to sell their products, more claims are made than can be supported by statistics. This is why over the next five years, the industry will experience more mergers and, ultimately, more organization and cooperation among the major manufacturers.
I continue to keep close ties with our European counterparts as our industry continues to offer more advanced equipment to a more educated consumer in a more sophisticated business environment.
Eric Haynes
Vice President
Sun Ergoline
Tanning salons today, when properly managed, are producing very healthy bottom lines for their owners, and the word is out. This is attracting successful entrepreneurs from other industries who have substantial funds to invest.
Sun Ergoline sees bigger salons opening in more prominent, high traffic locations. Public awareness of indoor tanning will grow considerably because large salons will spend more money on advertising. In addition, public perception of indoor tanning will improve as these larger, more attractive, professionally operated salons pull in hundreds of customers daily.
The serious salons will update equipment more frequently with larger units featuring the latest tanning technology. Lotion companies that keep the creative juices flowing will reap even greater rewards. More and more people will try and enjoy the convenience and effective results of indoor tanning. We have just scratched the surface.
Inge Glees
Vice President, Marketing and Sales
John Abat International™
The trend of mega-salons, a high number of tanning beds on premises, continues to increase exponentially. Salon chains and franchises continue to increase in number, as well. More salons are learning to maintain the momentum of winter business through the entire year. There also is an expansion in merchandising of tanning preparations, as well as adjunct products such as apparel, nutritional supplements and cosmetic items.
The lotion market will continue to become more competitive, especially in terms of salon value, product quality and wholesale price. In addition, innovative formulas and product concepts have been introduced at faster rates, which I find very exciting. However, product knock-offs, cheap imitations of best sellers and uninspired tanning products comprising basically nothing more than colored, banally fragranced water and filler chemicals, have been introduced to the marketplace in an attempt to fool salons and consumers. Fortunately, our industry is tightly knit--news travels fast--salons are extremely well informed and know quality when they see it.
As consumer demand for tanning services continues to increase for higher-quality beds in a customer service-oriented salon, so does the demand for sophisticated tanning lotions that are high-quality. Working women comprise the majority of tanners, and salons know or are quickly learning how to market to them in an extremely effective manner.
All salons, especially mega-salons and salon chains, have more purchasing power than ever. They are extremely cost and quality conscious.
In addition, the industry has been experiencing greater government regulation on both federal and state levels. In response, salons, distributors, as well as lotion and bed manufacturers, are uniting to fund industry lobbyists. In addition, more research on the benefits of indoor tanning is being funded, and there is an ever-increasing demand for salon tanning, skincare and business education.
The bed market will see more tanning units that combine superior engineering and manufacturing quality with modern, elegant style and sophistication, particularly, but not exclusively, from the European contingent. I see this market for high-quality, more cosmopolitan tanning units growing at a much greater rate. Salons will have more options and will no longer settle for lesser quality units.
The number of wholesale distributors will be considerably reduced through natural market attrition. Communications technology, particularly through the Internet and telemarketing, will contribute most to this decrease.
I also believe the number of tanning clients, particularly those in the 30 years of age and above bracket, will increase. With regard to tanning preparations purchased, I see a strong increase in demand for refined, high-quality products. However, I also feel the demand for exceptional skincare combined with tanning results will play an even more important role in the consumer's purchasing decisions.
Indoor tanning will continue to increase at least over the next two to three years, mainly for two reasons: The female 30 and over segment of tanners will expand at the greatest rate, and the healthy, tan appearance still will be en vogue within this market segment.
Ricky Gray
President
Jim Jones
Executive Sales Manager
SonnenBrune, Inc.
Customers definitely are the winners in today's current tanning market, says Jones. What we are seeing now, and for future development, is the overwhelming dedication to customer service and satisfaction.
According to Jones, the latest move by tanning bed manufacturers is to research what customers need for their salons and produce the highest-quality indoor tanning unit that fits the bill. With such features as color options, adjustable strength facial tanners and shoulder tanning systems created after many hours of research, SonnenBrune knows what customers want and gives it to them.
More and more the industry is seeing the reality of the research trend through the beds offered on the market. The leaders are not the ones who produce low-quality beds with a high mark-up. The leaders are the companies that spend time and energy developing high-quality, long-lasting beds.
Gray, for one, believes the trend will continue in the new millennium: "Throughout the next 10 years, we are going to see this trend become more apparent as we see the companies less dedicated lose market shares. As salon owners become even more educated on tanning beds, they are going to demand more. We are seeing successful salon owners learning as much as they can about the beds they buy, comparing materials used in construction, looking at tanning power, customer controlled options and profit potential."
Gray also believes salon owners put careful consideration in every purchase and only buy what they believe they can benefit from, meaning buying only the best bed they can find. Yet, it still is not enough to produce high-quality, customer-oriented beds. Companies today have to stand behind their products with support services. Client announcement information or kits, technical support and sales team knowledge are all more essential now than they were a few years ago.
"Customer satisfaction isn't just helping someone purchase a bed," Jones says. "It's keeping them happy long after the sale is complete. This is an area SonnenBrune continually is developing, thinking of new ways to help clients announce their new beds and boost sales. Small attention to detail seems to wrap up the package and makes everything complete for the customer. Forget about your customer after the sale, and you can forget about the next sale."
While not every trend in the market over the past several years has been positive, changes really have been heating up the industry and forcing tanning bed manufacturers to be better. It is the customer's market and no one loses, except the companies that refuse to meet the requirements of the salon owners. Those companies, like SonnenBrune, that strive to be the best and want only the best for their clientele ultimately will out perform and out live the competition.
Alix Johnson
Marketing Coordinator
Ultrabronz America
The indoor tanning industry quickly is becoming a fiercely competitive market. With an influx of more salons struggling for the same customers, we have witnessed and will continue to witness, a survival of the fittest.
The introduction of technologically advanced products impacted salon owners in many ways. While growing professionally, salon owners began offering better customer service, higher-quality equipment and a diversification of products and services. Not only have the salon owners become more knowledgeable of the technological strides manufacturers are making, but the tanners have demanded more for their money as well. Customers want great looking results and a relaxing atmosphere. Tanning product manufacturers also have to continue to grow and meet those needs.
Ultrabronz America has seen salons invest in higher- quality, better performance equipment as a result of the growing competition. By offering their clients equipment that provides better results, salons are more likely to attract and retain a customer base. Ultrabronz prides itself on being ahead of the competition in this area as the company offers customers tanning equipment that differentiates the salon from their competition in both tanning capabilities and comfort.
The use of higher-quality equipment also has attracted and invited entrepreneurial types into the industry. Like never before, entrepreneurs are seeing the profit margins obtained in our market and would like a slice of the pie. While salons continue to evolve professionally, manufacturers are forced to reconcile with the demands and high standards placed on equipment and the level of customer service and support that salon owners have come to expect.
It is hard to say what will take place over the next decade. However, one thing is for sure; manufacturers will continue evolving during this technological age to produce more efficient, higher-quality products. Like anything on a technological market, old design and concepts become obsolete. It is for that reason Ultrabronz projects the market will filter out the salons, products and equipment that cannot keep up with the times. It is unfortunate, but this may filter some of the smaller salons and leave more conglomerated, business-minded and elite salons. Ultrabronz will continue striving to stay on top of technology and back-up its product with incredible customer service and support.
Terry Katz
President
California Tan
California Tan recently conducted a survey of key, influential people in the tanning industry and uncovered several trends that dominate the industry.
For one, many reported that tanners today are more concerned with not only developing dark color, but also taking good care of their skin. As new and better skincare technology develops, tanners continue to demand improved skincare ingredients in their lotions. California Tan is responding this season with a line-up of lotions featuring new, more advanced skincare ingredients for improved results.
Secondly, the survey found that tanners enjoy a wide range of lotion choices and like to vary lotions from time to time. However, the survey also found that though tanners liked to experiment, they have a tried and true favorite that they returned to faithfully.
In addition, the survey found that tanners today view sessions as an indulgent opportunity to treat themselves and escape their hectic "go, go" lifestyles. This is where the aromatherapy trend in tanning lotions takes off. Today, tanners expect their tanning experience to provide a soothing, relaxing escape, therefore lotions that offer aromatherapy benefits have become a staple in California Tan's line.
Finally, the survey found the marketplace overwhelmed by the sheer number of tanning lotion brands currently on the market. That is why, in part, California Tan has managed to remain one of the top lines sold today with distributors, salon owners and consumers. As a brand name known worldwide, California Tan has won the trust of the customers through its value, quality ingredients and great results, as well as with its superior customer service.
California Tan believes superior product branding in a very crowded, competitive marketplace will be more important than ever in the future of the indoor tanning industry. As new lines continue to enter and leave the marketplace, the company believes providing superior product education will be more important than ever in helping clients reach their sales goals. California Tan will help improve their education by reaching out to clients with an improved, full-scale product education effort, in addition to sponsoring and participating in the Suntanning Association for Education symposiums and hiring salon educators to tour the country with in-depth product training symposiums.
The survey revealed that many in the industry feel the same as California Tan--as the economy continues to perform well and prosper, the indoor tanning industry can expect to grow at a respectable rate well into the next decade.
Susan Miller
President
PC Marketing/Montego Bay
Customer choice is one of the most important changes in the indoor tanning industry. With a variety of beds and booths on the market, tanning customers are looking for salons that allow them to experience more than one bed, so they can create their ultimate tan. Salon owners also are responding to this change by providing a variety of options for the tanner. Salons now are offering low-pressure beds, high-pressure beds and beds with and without facial tanners as well as stand-up booths, upper body tanners and customized tanning beds with day spa options such as aromatherapy and soothing sound systems. Salon owners recognize that customers are looking for variety and options in one place instead of changing tanning salons as they try to increase their tan.
A move to larger equipment with more bells and whistles, more features and 160-watt technology also is causing salon owners to use the upgrade system, offering customers a variety of equipment at various price points. By getting away from selling sessions at one standard price, the salons are evolving to more variety and more profit.
Salon owners recognize that investments in bigger and better equipment will present a return on investment through higher prices. However, improved training and information from the manufacturers, distributors and wholesalers are giving owners a more sophisticated, more knowledgeable image. With the industry investing in itself, only good things can happen.
As for the future, the changes in the industry only can have a positive effect on the indoor tanning industry. Salons will open with more variety, manufacturers will continue to educate and salon owners will experience record growth in response to customer needs and demands. In the new millennium, the indoor tanning industry will have an aura of professionalism and maturity that only can lead to variety, improved products and more customers.
Spencer Murfey
President and Chief Executive Officer
David Riche
General Manager of Distribution
Florida Tan
People want to achieve a dark tan as quickly as possible. The popularity of tingle lotions has increased over the past three years, with the need for a tingle feeling gratified by the oxygenation of the skin tingle lotions cause. With the new concerns over the chemicals used is indoor tanning lotions, consumers want to guarantee their lotions are made with all natural products that can produce immediate results while maintaining healthy, hydrated skin.
The need for industry regulation with regard to the chemicals used in tanning products is a trend for the new millennium. As the market becomes more competitive, lotion manufacturers are increasing the chemical content of lotions and reducing the natural tanning process to satisfy the consumer's need for immediate results. With the industry competition increasing, the importance of skin re-hydration to achieve healthy skin and a darker, longer lasting tan becomes an important trend in the indoor tanning lotion industry.
Over the next 10 years, Florida Tan sees the industry evolving through the development of mega-salons specializing in indoor tanning and related services, as well as an increase in the size of the industry with more manufacturers, salons and consumers. Florida Tan also sees the development of new types of products in the next millennium to satisfy the need for quick and healthy tanning.
Liz Quehl
Account Representative
K & K Insurance Group, Inc.
There are several changes we have seen over the past few years. Salons are increasing the number of beds, offering a variety of membership packages and even branching out to multiple locations.
These changes are making the industry more customer friendly as well as more competitive. Clients are able to walk-in without an appointment. Salons are offering numerous packages so tanning customers can get a better value for their dollar and, with several locations, salons can reach new clients throughout their area and offer more flexibility to current customers. In addition, customers no longer have to drive across town to tan, they can tan near their home or work without losing precious time.
The increase in beds has caused more salon owners to lease beds to keep equipment up-to-date. Computer equipment is becoming more prevalent in salons as a way to keep records, appointments and maintain a customer listing.
With all this change comes increased risk of loss for salons. Checking and updating policies regularly to make sure there is adequate property limit on the policy and maintaining good records to protect the business against liability claims needs to become as important as maintaining tanning beds.
In the new millennium, salons will continue to update their equipment and provide flexible packages to increase customer base. There also will be an increase in privately labeled lotions, creating an exposure that is not covered on standard tanning policies so the pros and cons of selling private labeled lotions should be thoroughly investigated.
Sue Ricciuti
Program Manager
Universal Insurance Facilities, Ltd.
At Universal Insurance, we have seen positive indications that the tanning industry as a whole will see increased growth in the year 2000 and on into the foreseeable future. Although the summer months traditionally are very slow for tanning salon owners, we have seen a huge increase in the number of new businesses that have opened during the off-season months. Many of these tanning salons are brand-new; however, a significant percentage of them are existing businesses that have been taken over by new owners. We also have seen quite a few beauty and nail salons that are adding tanning services to their traditional mix, which we feel is a good indicator of across-the-board growth. Perhaps, the most positive sign of all is this trend has been equally strong nationwide, including the sunshine states such as Florida and Arizona. It is important to note that in addition to the growing number of new tanning salons, salon owners themselves appear to be incredibly optimistic about the challenges and opportunities for the coming year.
When it comes to insurance claims filed during the past few years, we have noticed an increase in both the kinds and dollar amounts of claims that we have been receiving. Although such an increase is certainly bad news for salon owners and their insurance companies, the fact that the majority of salon owners now carry adequate insurance is an indicator that the industry has achieved maturity and responsible tanning salon owners are aware of the need to take the appropriate steps to guard themselves against financial disaster.
On a more positive note, it is important to point out that many of the types of claims
filed in the past year were at least partially
preventable, and there are a variety of measures that salon owners can implement
immediately and at little or no cost to help reduce their risk of exposure.
For an industry once considered to be a passing fad, the tanning industry has achieved remarkable growth and maturity over the past few years. The number of new salons is increasing by leaps and bounds, owner confidence is high and more and more consumers are starting to take advantage of this tremendous business. The future of the tanning industry definitely is bright.
Chris Shaffer
National Sales Manager,
Products Division
Australian Gold, Inc.
The biggest industry trend that I have seen in the last few years is the salon owners identifying the need and value of continuing education, for them as well as their salon's staff. The increases in educational seminars, from understanding the tanning process to understanding what's in the bottle of lotion that makes it work, shows a renewed commitment to taking the professionalism of this industry to the next level.
These trends have affected the industry in many ways. One of the most obvious is the actual appearance of salons and the educational stance they are taking with their clients. This is something that is visual to the customer and the quickest to make a impact. Being able to offer the customers more than "you're in bed No. three," makes them feel more confident in their decision to tan. The feeling that you are dealing with a professional in any field adds comfort to your buying decision as well as helping to spread word-of-mouth advertising.
Education can help dispel some of the negative publicity that the industry has, in many ways, unjustly received in the past. The evolution of the industry for the future is exciting. All you have to do is look at Europe to see the potential. Tanning in Europe is popular, and a greater majority of society tans. A more educated public will continue to grow the support for tanning salons in the United States. Finally, the newly formed International Tanning Association has been designed to do just that: protecting our industry and promoting positive public awareness for tanning. The future couldn't be brighter for the tanning industry.
Paul M. Shadis
Vice President of Marketing
MegaSun, Inc.
The main trend that I see occurring is the increase of new mega-sized stores with 20-50 beds. These stores will be auto-drafting funds more and will be increasing into multiple locations. The star players also will be expanding into multiple markets of other cities. Within these stores, the owners and managers will be using some very smart marketing concepts with three to five levels of upgrade tanning beds and advanced sales techniques. This marketing will raise the profits of tanning and also will bring tanning salons into the mainstream business world. The owners will continue to refine how they sell more years in contracts to customers, mostly via the health club sales approach. This will keep their cash flow steady year-round.
At MegaSun, we also have noticed that large chain store owners that once were purchasing large upgrade, plastic-covered beds using electric lifts and electronic circuit boards now are requesting the large metal beds with simple electrical circuits. We feel this second trend will continue as technicians educate the salon owners as to the cost of repairs of these digital/plastic-covered beds.
The first trend is increasing the customer-tanning base nationwide, which is great for everyone. It is causing more people to tan now than ever before in the industry. This is happening because of the large salon's advertising budgets and the educational materials and training available to staff. They also are increasing the professionalism of the entire industry. Salon owners have to keep learning, evolving and training themselves and their staffs just to keep up with the franchise-type mega-stores.
The second trend on equipment will be similar to the cycle that occurred nearly 15 years ago when all the fancy electric lift beds with digital features were being imported from Europe. Today, the new or inexperienced salon owners will purchase them until they start having part supply problems and technical difficulties with circuit boards. Then, like before, everyone will start selling them off and purchasing solid metal beds and booths with simple electrical circuits.
The next 10 years should see a tremendous growth period in the larger, professional salons. The baby boomer's kids who will be entering into the market during this time frame will fuel this next phase of growth. The average size tanning salon will grow to be 15 or more beds and automatic drafting from checking accounts will be commonplace for salon owners. The per session charge should rise initially for the first two to four years then go down as the larger salons attempt to control the market. Then, it will rise dramatically as they rake in money from their new monopolies. There also will be one or two major franchises that probably will grow into a public company and start growing like Blockbuster Video. If they can manage it properly, they will be the great success story of the 2000-2010 decade. This will help the industry as tanning will become even more common for everyone.
Michael Stepp
President
Wolff System Technology Corp.
There continues to be a small, but vocal, minority of tanners asking for "faster" tans or shorter sessions. This is driving salons to new equipment designed for shorter exposures. This will continue, but, naturally, will take some years before the 10- and 15-minute equipment becomes prevalent in North America.
Wolff System recently completed a survey of salon owners. We were pleased to receive detailed responses from more than 1,300 owners representing over 1,500 locations employing more than 10,000 tanning units. Our survey respondents report well over 80 percent of their tanners prefer a 20-minute session. They also reported an interest in the 10- and 15-minute beds as well as more interest in vertical tanning booths compared to earlier survey results.
A possible side effect in the search for shorter sessions is the salon use of non-compliant (per FDA regulations) sunlamps. At this important time, when the industry's regulators are considering rule changes and industry critics are more committed to author change, it is not in our mutual interests to bend the rules and risk shining a negative light on the indoor tanning industry.
Turnover of salon ownership is being reduced. This is a good indicator of a maturing industry. The International Tanning Association recently formed as a trade group, signaling maturity and responsibility. Consolidation at all levels continues, from equipment manufacturers to supply distributors to salon ownership. While the industry likely will continue its expansion, there will be fewer players in the future. This is a good thing, but it puts a premium on sound decision making and a well-thought out and flexible business plan for those hoping to stay involved and profitable over the long term.
As the industry matures and grows, there is an urgent and increasing need for employee training and education to assure proper use of tanning equipment and to dispel false impressions of the indoor tanning industry. Pending FDA rules changes and the likelihood of more states increasing their involvement in regulation, the industry should be motivated to recognizing the importance of a unified industry.
Changes in demographics and consumer markets over the next 10 years also will influence our industry as the U.S. population of young earners and consumers age, 18-34, will grow faster than any other category except the 65-and-over group. U.S. racial and ethnic makeup also will change, with whites shifting from 72 percent to about 68 percent of the population. Hispanic and Asian population percentages continually are increasing and typically are not a large consumer group for indoor tanning services and products.
The number of two-income households with children will continue to grow as will single-parent families, making time management important. In addition, there will be more reliance on the Internet for fact-finding and consumer decision making. The current labor shortage also will continue, making it more important than ever to find, recruit and keep good employees.
Leif Vasstrom
Chief Executive Officer
QDM Co., Inc.
First and most importantly, I see that several more industry leaders are starting to understand the concept of value tanning. In other words, the point is not a low price, but a very good tan for a good price. That is value.
Salon owners also are starting to see the new picture for customer satisfaction. Short convenient tans, less often, combined with tanning less annually in order to keep a tan allows the salon owner to charge more per session allowing, in turn, for more high-end people to tan during peak hours. This makes for good value for all involved.
I know that more and more salon owners will want to work with a company that can take responsibility for the entire user experience as well as be able to provide guidance to maximize the return of investment for the salon owner.
By stating that, I do not necessarily mean that the industry is or has been technologically bankrupt. Quite the contrary, I believe several companies now have understood that we work for the end user--the tanner. After all, the tanner is the key person who needs to be pampered, much like he or she would be in a spa environment. This means that together we will build a better platform for ourselves as manufacturers, as well for the salon owners, by creating a better environment for our end users.
Certainly, as any industry matures, you will find that well operated chains with better training and equipment will be the direction that the industry takes. However, individual salons that are managed well and continue to evolve with the new equipment and better service always will have a place in our industry. You can draw a parallel here to good restaurants and hotels; however, it will become a niche market. We also are seeing a trend that involves a new generation of investments being geared towards the tanning industry.
