Drybar founder and serial entrepreneur Alli Webb sees a kindred spirit in Glowbar founder and CEO Rachel Livermore, a third-generation aesthetician who opened her first skin care studio in Tribeca in 2019 with a focus on quick, clinical-grade facials.
“Rachel knows skin so incredibly well, that’s what she’s really good at,” says Alli, who sold her Dry Bar empire, both its products and national chain of stores, in 2019 with the product business going for $255 million to Helen of Troy. “I knew how to do blowouts really well and I turned that into a business. You’re taking one thing that exists, and creating a better experience around it, which is pretty much my motto in life.”
The Glowbar experience, which sits at the intersection of derm office and spa, consists of 30-minute custom facials performed by licensed aestheticians. At $65 a pop, the company targets a range of skin care concerns with treatments such as dermaplaning, chemical peels, and LED. In January, Glowbar closed a $10 million Series A investment led by Salt Lake City-based firm Peterson Partners, whose prior investments include personalized hair color company Madison Reed, which also owns retail posts.
“We only do the neck up, and that has really helped us gain the trust of the consumer,” said Glowbar’s Rachel.
The company sees itself as a maintenance service between visits to the dermatologist. A key differentiator that’s helped enhance Glowbar’s credibility has been to partner with exclusive professional skin care brand partners, including Environ, Elta MD, and IS Clinical. “The aesthetician is vital to our business, and if you give them something that you’re also selling at retail, it dilutes the need for an aesthetician when the consumer can use that product at home,” said Rachel. For Glowbar’s brand partners, this makes intuitive sense. “We wanted to be [sold at] a place where [clients and customers] would recognize not only the importance of our products, its ingredients, and research, but also [have the staff] to provide an opportunity to be a strategic partner in terms of education, training, and support,” said Rob Trow, founder and owner of Environ.
Alli, along with Bluemercury co-founder Marla Beck, recently signed on as key advisors to Glowbar. “The focus is on making [these services] quick and affordable and attainable to many people,” Alli says. Monthly memberships are $55. (While not required, memberships include one facial, in addition to other perks such as a guest pass per year).
Not more than five years ago, clinical-grade facials, lasers, and injectables were mainly performed at the offices of dermatologists, plastic surgeons, and medical spa. Today, they’re readily available in beauty bars and skin care studios alongside juice bars and nail salons. Global research firm McKinsey forecasts approximately 8 percent to 10 percent CAGR from 2021 to 2026 for med spas, which it defines as service providers offering traditional dermatological services outside a dermatologist’s office. (Pre-COVID, med spas were growing at about 7 percent CAGR). Plastic surgeons, too, have seen an unprecedented demand for cosmetic procedures since the pandemic. Nearly a quarter of aesthetic-focused practices reported that their business had doubled (compared to pre-pandemic levels), and 6 percent reported a dramatic increase, according to the American Society of Plastic Surgeons. Moreover, over the past five years, over 400 aesthetics clinics and self-care studios raised $3.1 billion from investors.
There is no shortage of notable skin care retailers. Fast-facial company Heyday secured $12 million in a Series B extension in December 2022, two years after its initial $20 million Series B. Heyday, which launched in 2015, plans to grow to more than 50 locations by the end of 2023. Ever/Body, a female-led company whose focus is on cosmetic dermatology, announced in June 2022 that it had raised $55.5 million in Series C funding, bringing total capital raised since its 2019 launch to over $100 million. Alchemy 43, which specializes in micro-treatments (Botox and dermal fillers), plans to expand to 26 locations by the end of 2023. Laser facials are the focus at Skin Laundry with prices ranging from $250 to $700 (add-ons not included); Skin Laundry aims to reach 60 clinics worldwide by the end of 2023, with 100 by 2024. SkinSpirit, one of the pioneers in the category (founded in 2003), offers a broad range of aesthetic services, including dermal fillers and body sculpting, and currently operates 31 clinics nationwide. Last fall, SkinSpirit received its first investment from global investment firm KKR.
Despite the influx of venture capital money, the market is highly fragmented. “90 percent of companies only have one location, resulting in competitive pricing, especially for the most popular treatments, such as laser hair removal, which is increasing accessibility and driving both consumer usage and demand,” said McKinsey Associate Partner Alexis Wolfer. “For now, consumers appear to be winning as they have increased access at lower price points.” However, Alexis cautioned that this is not without risks: as more players enter the field, will standards decline and medical risks increase as providers face margin pressure?
Convenience is king across categories, including beauty. It’s cited as the number one reason consumers engage in beauty, whether online or in-store, seeking services where it is easiest, reports McKinsey. “Consumers are increasingly unlikely to drive out of their way to see a provider or wait on hold for a doctor’s office booking only during working hours. Many of these quick-service providers are solving these pain points with app- or web-enabled booking, high-traffic locations, and more convenient operating hours, including weekends and evenings,” said McKinsey’s Alexis.
And younger consumers are jumping on board. More Millennials and Gen Zs than ever are rushing to get preventative and restorative procedures. Roughly 60 percent of dermal filler mentions on Twitter in 2021 were from users under the age of 25, and in the U.S. the number of patients aged between 20 and 29 years old more than doubled between 2010 and 2020, according to McKinsey research. And it’s not just younger women seeking services. More men are undergoing minimally invasive cosmetic procedures, too: the number of procedures they’ve received jumped 29 percent from 2000 to 2020.
The de-stigmatization of cosmetic procedures (thank you, Kardashians) and the pop-up phenomenon (built mainly for social media opportunities) further help explain the growth of quick-service beauty bars, according to Katie Rose Hejtmanek, PhD, Associate Professor of Anthropology at Brooklyn College, CUNY.
“A lot of Gen Zs and Millennials are understanding their world in this pop-up fashion, including wellness and health,” she says. “Instead of building a longstanding relationship with a family physician, they turn to urgent care centers. It’s a transactional engagement.” Rather than filling up on Botox at the dermatologist’s office, they are gravitating to beauty bars, as they would to get hair extensions or a fresh set of lashes.
In this selfie-driven age and comments on social media, “you are mediating yourself all the time,” adds Katie Rose. “You want to look TikTok-ready at all times. You’re constantly performing on a screen or in front of people.” With the emphasis on transparency and #NoFilter a badge of honor on social media, people are now filtering themselves before reaching the screen or camera. “So instead of filtering the mediated version of you, you filter yourself first with extensions and eyelashes and injectables,” she said.
Due diligence by consumers and informed consent are non-negotiables, according to Dr. Gregory Greco, President of the American Society of Plastic Surgeons. It comes down to making the distinction between procedures that require consent and those that don’t. “Medical procedures belong in medical offices,” he says. “Procedures like dermaplaning are perfectly fair to have in a non-medical setting. However, anything that requires consent, such as injectables, belong in the doctor’s office because of the risks and possible complications associated with them. The de-medicalization of these procedures is very concerning. These are patients, not consumers. And they have to do their homework about who is performing aesthetic procedures on them.”
Dr. Jennifer Walden, President of the Aesthetic Society, who owns medical spas in Austin, Texas, and New York City, is especially concerned by the lack of medical oversight in quick-service beauty bars. “Anytime the integrity of the skin is altered, broken, or treated with chemicals, there should be oversight,” she says. That doesn’t mean a physician needs to be present during treatments, but rather, they should be available should complications arise. This translates into licensed, non-physician providers delivering services with physician oversight. “Even low-energy laser and chemical peels can cause problems like skin reactions, rashes, and any type of laser can cause a thermal energy issue like a burn,” she says.
Beyond the question of who is actually performing the services, there is also the issue of regulations around the training that is required to administer specific services, and these vary by state. “In the state of New York, for example, you don’t have to be a physician to use a laser. However, when you cross the river into New Jersey, you have to be a physician to pull the trigger on a laser. Injectables are different depending on the state as well,” says Dr. Greco.
These differences in state regulations may pose an impediment to nationwide growth. “We’re hearing CEOs and investors worry not only that these regulations may change, making it harder for quick-service providers to operate profitably, but also that it will make it difficult for any single provider to win, especially as they think about scaling across state lines, and the margin impact of doing so,” says McKinsey’s Alexis. Another potential impediment are staff shortages, especially nursing staff, she warns.
Be that as it may, consumer trends inexorably point to younger generations prioritizing experiences and wellness, as seen in their discretionary spending, according to Brett Stohlton, a partner at Glowbar’s investor. “As facials deliver value and become part of a routine, customers are increasingly willing to subscribe to the service, becoming members, in the same way they would a streaming service or Amazon Subscribe & Save,” he says.
Brett believes that both distribution points — beauty service bars and MD offices — will thrive in the future, and he made the analogy with omnichannel retail where distribution is aligned to customer type. “Some customers will continue to prefer a dermatologist’s office, but others will opt for the convenience and value found at skincare studios like Glowbar. The brands that democratize quality and deliver high value will be well-positioned to serve emerging trends,” he said.