You felt it in the chair, and the numbers from The Kim Report — the beauty industry’s only monthly salon performance report — confirm it: 2025 was a tough year where the industry had to work harder for less. But understanding why is the first step to a profitable 2026.

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Based on The KIM Report’s 2025 year in review, which was highlighted at the High Performance Salon Academy’s Empower Conference, here are the critical takeaways about your business and the industry:

• You Raised Prices, But That Was It: Industry revenue only grew by 1.1%, and that growth came almost entirely from you raising your service prices. Why? Because client traffic was down. We made more money, but with fewer people coming in the door.
• Inflation is Still Winning: For the lowest-growth salons, your price increases (2.5%) were actually below the rate of inflation (2.7%). In simple terms, your costs went up faster than your prices did, directly squeezing your profit margins.
• The Color Gap is Real: The good news: color revenue held strong. The bad news: clients are stretching out their visits. Salons with 5-9 stylists performed about 40 fewer color services last year! This drop in frequency led to lower overall productivity—meaning more stylists were sitting, waiting for clients.
• Retail is Hurting: In-salon retail sales dropped for the second year in a row. For larger salons, the retail-to-service ratio fell to 9.9%. You’re losing this major profit source, and most of that money is walking out the door to online mass retailers.
• Stylist Income Needs a Boost: The average annual revenue per stylist sits between $62,000 and $70,000 across all the salons tracked. While this is just revenue, it highlights a significant gap between the average salon's performance and the High Performance Salon Academy’s $100,000 target—a sign that our growth systems need an intentional overhaul.

 Your 2026 Growth Playbook 

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According to The Kim Report analysis, these are your four core strategies for growth in 2026:

1. Rebuild Color Frequency: Focus rebooking efforts on shortening the time between services (e.g., bringing a client back 2-3 weeks earlier).
2. Increase Service Value: Invoice all add-on services (like bonders and hair treatments) and introduce new, fast, and profitable services (like scalp treatments or treatment haircuts).
3. Boost Retail Sales: Ensure every client receives a proper "hair care regimen" consultation before leaving. Follow up by sending a Product Recommendation that leads to your Online Store.
4. Intentional Pricing: Review and increase prices as needed to stay ahead of cost inflation. Revisit services that saw a drop in demand after price increases, as they may have hit a "maximum acceptability" level.

The Immediate Solution to Increase Revenue

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The fastest way to stop losing retail sales to mass retailers is SalonInteractive’s eCom solution for salons. 

• Free and Zero Inventory: Create a free Online Store featuring over 600 brands from 17 beauty suppliers. You never have to carry inventory.
• Managed Fulfillment: Our beauty suppliers handle the ordering, inventory, payment processing, shipping, and returns—at no cost to you.
• 25% Commission: You earn a straight 25% commission on every sale— direct income you would have otherwise lost.
• Client Retention: Stylists can send Product Recommendations directly to clients, directing their online purchases back to your store. The goal is "Yes and"—maximize your in-salon sales and capture the digital sales that are walking out the door.
• Marketing Done For You: Automated brand marketing sends retail and service promotions to your clients on your behalf. These growth tools help you book more services, increase revenue, and build loyal clients—automatically.

‍The potential is clear: implementing these strategies will allow your business to grow intentionally and rebuild a healthy, profitable foundation for 2026.