More than skin deep – the health and beauty industry is a primary revenue driver
JOHANNESBURG – The Small Business Recovery Monitor launched by Yoco in May has played a vital role in creating a big picture of how small businesses are coping in lockdown, but its real value lies in its ability to demonstrate the significance of specific parts of the small business world.
Under the microscope this week is the health and beauty industry and its recovery – particularly focused on weekends.
Weekends have been a staple source of revenue for small businesses in South Africa, but most notably experienced drastic depressions even as the lockdown restrictions were eased to level 3.
Interestingly, during its recovery over the last three weeks, the health and beauty industry has not reflected this trend quite as clearly. What makes this significant?
And why is this industry unique in its ability to generate business where other industries have struggled?
What the data tells us
The Recovery Monitor data has detailed the weekend dips across industry and province. While the week (Monday to Friday) average climbed steadily, weekend trading remained below 40 percent on Saturdays and below 30 percent on Sundays.
Pre-Covid, these days played a large role in driving small business activity. Consider what a weekend may look like for you.
A stroll around your local market, or a visit to your favourite restaurant and café? Perhaps picking up a treat or two from a bakery. And, of course, regular trips to hair and beauty salons.
The pandemic brought all of these to a halt, and we felt the economic impact.
Prior to the inclusion of the health and beauty industry under level 3, the retail and the food and drink industries consistently showed a relative decline on Saturdays and Sundays throughout May and June. People stayed at home and held back on spending.
However, since the announcement of advanced regulations of level 3, the broader net allowed beauty practitioners, markets and sit-in restaurants to reopen and the weekends have reignited, slowly but surely.
Weekend turnover for small businesses peaked at 60 percent for the first time in months with Saturdays, in particular, starting to look better.
And the primary revenue driver has been the health and beauty industry, more specifically hair and beauty salons.
Why health and beauty?
In a country like South Africa, it is difficult to understate the significance of a beauty business.
As a means to be self-sufficient, it is an industry that has a lower barrier to entry than most, is almost always in demand, and finds itself uniquely positioned in an African context, where international brands and products do not cater to local needs. It’s also a segment which has fostered many female entrepreneurs.
This makes the decision to choose local or support small in this industry a more natural choice, but it doesn't explain the data in its entirety.
We have spent a lot of time detailing how the lockdown has affected all of us financially but what has it done to us emotionally and mentally? Perhaps this is the story that the health and beauty industry is telling.
Perhaps what makes it unique in this time is that the pandemic has stripped the world of its comforts – of the things that keep us feeling content, positive, and connected – and health and beauty have given us a way to reclaim a small piece of normality.
In the early days of lockdown, even when consumers did venture out, they frequented bigger businesses for their promise of convenience and hygiene. Why risk it all now for something that seems as trivial as a haircut or a manicure? My guess would be that these things – small, ordinary, and perhaps mundane – become meaningful when you choose to go small.
Small businesses have the power to transition a haircut from the list of things you have to do, to a list of things you want to do.
To seek refuge in a hair or beauty salon is a way to take care of yourself, especially if proper mental health treatment from psychologists is a luxury beyond means. A good conversation with your barber or beautician goes a long way to bringing clarity and walking out feeling like your best self helps too.
We know the value that small businesses bring to our economy but this lockdown has given us the opportunity to appreciate the value that they bring to our personal lives.
We can quantify transactions through the numbers, but when those transactions become interactions, and the line between essential and experiential is blurred, there is a lot the data won't tell us.
We need small businesses. Where to from here?
Small businesses have been hard at work to meet the requirements of the lockdown regulations and to keep their customers safe. None of these should be taken lightly. But for beauty business owners, the challenge might be greater. How do you keep your customers close and protect the space in which relationships flourish, while also holding them at a physical distance?
In a post-pandemic world, we will have to redefine the ways in which small businesses stay connected to their customers. As we implement the Covid-19 regulations, we can pay specific attention to why our customers choose to reach out and try to meet them.
It would seem as if right now people are looking for ways to re-engage and (safely) re-connect, and small businesses are perfectly positioned to answer the call. Let's grant them the spotlight and hand over the microphone. Where do we go from here?
Katlego Maphai is the co-founder and the chief executive of Yoco, a financial platform for small businesses. The Yoco Small Business Recovery Monitor in partnership with IOL is a live small business transaction data resource. The index is updated daily with the latest information from more than 80 000 Yoco merchants, relating to their turnover by province and industry.