Estée Lauder chairman Leonard Lauder called it “lipstick effect” — increased demand for small luxury items during the economic uncertainty. The assumption behind this phenomenon is that when people are under the most stress, beauty and self-care rituals provide a form of psychological comfort.

McKinsey even reported one increase in demand for skincare and wellness products during the pandemic. So, with fear of an economic downturn never far from the surface, could the same apply to more affordable alternatives to surgical procedures like tummy tucks?

One of the most popular dermatology brands in the US, LaserAway, has now expanded to over 120 countries and reports that the industry is growing at over 20% annually in America. CEO Scott Heckmann says that LaserAway experienced “strong years” in 2008 and 2020 despite recessions. He put that down, in part, to patients turning away from higher-cost providers like plastic surgeons and dermatologists.

As CMO of Vagaro, a software provider in the wellness industry, I've witnessed this firsthand: so many people are abandoning surgical procedures for non-invasive methods such as body contouring, now allowing for advances in beauty technology. They are simply more accessible and less overwhelming. I want to dive deeper into LaserAway's growth as an industry barometer because it has drawn three lessons that can help other beauty brands recession resistant yourself in one unpredictable economic climate.

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1. A changing market is a good market

When clients trust the practitioners of a clinic with something as sensitive as their body and face, being a lot transparent what is included in a procedure is critical to credibility. LaserAway's social media features videos of real people, real nurses, actual treatments and baselines – at their heart, these procedures are about helping people find their confidence.

Providing people with a realistic picture of possible outcomes also ensures that they are more likely to end up satisfied with the treatment. Internal data from our market shows growing demand for these non-invasive aesthetic treatments. Over the past five years, we have seen an average annual growth of new medspa businesses on our platform of 24%.

Technology has been a key factor. While cosmetic surgeons have a very limited audience at a high price, medspa clinics offer a host of services that open the door to a large market – including a growing number of men. In fact, skin care accounts for 45.6% of the global men's cosmetics market (value $85.2 billion in 2023) as old male stereotypes give way to self-care among younger generations.

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2. Diversification builds resilience

In many industries, brands need to warm to their products or services. But medspa chains like LaserAway, Sculpt MD and Sono Bello can sell a variety of services while still maintaining expertise in each area. that diversification it's really important because it drives repeat customers and more revenue. When people do body contouring once, they are likely to come back. It's the same with Botox.

On our platform, we found that medspa businesses offer an average of 47 services. Having a balance of higher and lower value offerings like this is a great strategy for maintaining steady income through economic fluctuations, as people view treatments as an ongoing investment in their well-being.

Integrated payment technology is also a key feature to help people afford all types of treatments. Many consumers are choosing non-invasive procedures because they get the same results as surgery but don't have to deal with the long recovery time.

However, the option to pay later can make these treatments financially viable. However, getting people in the door doesn't require hard selling because consumers are smarter than ever about what they want and expect.

3. Power of referrals

All beauty businesses should be aware that the traditional sales model has evolved from initially engaging customers through their various digital and marketing channels. The pandemic was the big push for digital influence, but people now want to be influenced through the use of real-life case studies instead of feeling like they're being “sold to.” Hence, the role of influencers.

Now we can assume that once people have searched for a product or service online and done their research, they are already warm. For me, only after I'm satisfied that a company has authority and integrity am I ready to talk to a seller. Demand for more authenticity it only reinforces the idea that the biggest selling point in the beauty and wellness space should be referrals.

It will be interesting to watch companies shift to this new expectation of how consumers want to be influenced through sales. This is especially the case as they are already doing a lot of good, such as their onboarding process that prompts patients to choose their treatment, their target body areas, the number of treatments already received and their age. This type of data can inform the right regime and be used to predict consumer trends and continue to build credibility.

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