Indoor Tanning Industry

Looking Fit magazine has compiled a state of the industry report through a number of surveys conducted through Looking Fit's Tanning Tours, the top 250 Salon issues, annual trade expos and the magazine itself, as well as conducting interviews with industry manufacturers. When it comes to service-based businesses such as indoor tanning, one of the main criteria to a growing industry is how the economy is faring overall. At no time in memory have Americans felt more optimistic about the future--and with good reason. We can look back on one of the brightest decades in memory and look forward to a future that appears to be even more luminous.

According to economists, the real sign of health in an industry is when it begins to grow from within just as the indoor tanning industry has done. The maturity of the indoor tanning industry is not only evident in the bottom line, but also in the public's acceptance of indoor tanning as a viable trade. Consumers continue to flock to indoor tanning salons. Overall, the number of tanners has increased from more than 27 million in 2000 to an estimate 28.6 million in 2002. In addition to seeking that golden tan, they also are demanding more from their salons in the way of skincare products and education. The industry veterans also have seen a change in the attitude of salon owners who are entering the market. They are noticing a more professional entrepreneur who is looking for long-term growth.Interestingly, many of these businesses start with an addition of tanning to their existing operations. As they experience the success and acceptance of tanning by their customers, some are opting to open free-standing tanning salons as well. And while some tanning salons view this as competition, it only emphasizes that fact that tanning is a viable industry worthy of the respect of other markets.

Since the beginning of 2001, the market has fluctuated significantly. The stock market is dancing up and down, the federal government is tackling interest rates, and the United States appears to be staring straight at a recession. While unemployment has begun to grow, America is still spending money on the little luxuries. People still want to look good and feel good about themselves, and indoor tanning provides this outlet. While people may not be spending money on large-ticket items, they will spend a few dollars for a tanning session.

What does this mean for the indoor tanning industry? Over the past 10 years the tanning industry has more than doubled. More than 60 percent of the growth in the indoor tanning industry is coming from within the industry itself. In other words, 60 percent of the new salons are current salon owners either expanding or opening another location.

Now, more than ever, tanning is becoming more recognized as a true lifestyle activity. With this increased recognition comes more interest from mainstream businesses that are studying the tanning salon market and venturing into this lucrative arena. This only creates a heightened awareness of the business of indoor tanning. From health clubs to video stores, tanning is emerging all over the business world.

Corporations are also investing tremendous amounts of money in promotions aimed at distributors and salons designed to increase their market share in the lucrative indoor tanning industry. Professionalism can be seen in the more frequent and sophisticated marketing efforts salon owners are using. For example, the gamut of recent marketing programs offered by salons include customer promotions, targeted database and direct-mail programs, and advertisements including creative signage as well as imaginative print, radio and cable television ads--many of which support some type of promotion such as a free trial or bed visit.

According to salon owners, the most widely used type of advertisements are tanning coupons (78 percent), Yellow Pages (74 percent), and local newspaper advertisements (72 percent). In addition to the increasing sophistication of marketing activities, there has been a tremendous growth in the use of technology to support business objectives.

The Demographics of the average indoor tanner has remained fairly constant over the industry's more than 30-year history. The majority of those who tan continue to be in the 18-49 age group, 70 percent of which are women and 53 percent of which are women age 20-39. However, in talking with salon owners, one of the fastest-growing segments of the indoor tanning industry is with older tanners over the age of 55. According to surveys, more than 2.5 percent of indoor tanning demographic consists of tanners over the age of 55.

What is most significant about the indoor tanning industry's demographic of tanners, is that it contains one of the highest service-based spending groups--a combination of the older baby boomer generation, as well as the maturing generation X demographic.

According to American Demographics magazine, as baby boomers move into a new stage of life, it signals a fundamental change that goes far beyond the demand for products and services that appeal to the middle-aged. The projections suggest that as baby boomers leave youth behind, many markets are likely to be substantially affected--including the indoor tanning market.

In general, baby boomers are highly focused on preserving their appearance and spend 38.3 percent of their income trying to stay looking young. One of the ways that they go about trying to stay young is by spending money on fitness and recreation, of which the indoor tanning industry is a part.

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