Analyzing Top Performing Deals Categories: 4 of 7 in a series
To be successful, your deals program needs to provide your audience with a healthy deals mix that represents all seven categories (restaurants, retail, travel, recreation, events, beauty and service) as well as run deals from a variety of advertisers, at different price points and from a mix of locations in your market. By acquiring deals from all the main categories your site will appeal to a broad audience and will ultimately generate more revenue. To give you a better understanding of where you need to focus your efforts we’re writing a series of articles breaking down and analyzing each category including: restaurants, retail, travel, recreation, service and events. Now let’s shift to beauty now.
Beauty Category Mix
The beauty category breaks down into seven subcategories (fitness, hair, hair removal, nails, teeth, tanning/ skin and spa/massage). From the category mix chart below, you can tell that spa & massage is the top performer banking 51% of the total revenue for the beauty category. Take note that hair removal deals only make up 5% of the total revenue pie for the category. The beauty category as a whole has been a big revenue driver in the deals space for some time. The fact that many of these businesses operate on high margins makes them especially ripe for deal sites as they have the flexibility to discount.
Average Revenue per Beauty Deal
The spa & massage category stays strong when it comes to average revenue per deal as it ranks second. But what is most interesting is when we look at how much hair removal is bringing in. Remember, hair removal only brought in 5% of all beauty deals’ revenue, but it tops the chart when it comes to the average revenue per deal. Part of that success is tied to the price point. Laser hair removal deals tend to be more than $100 with the average coming in at $143. The fact that these deals require ongoing maintenance means that there is a built in audience for this deal. Those who start the treatments are much more likely to want to continue to buy them.
Medical spas aren’t a category in and of themselves, but they are well represented within beauty and are a great target due to their wide variety of services including spa/massage, skincare treatments and laser hair removal to name a few. Fitness and gym deals on the other hand comes in second in deal mix yet is a low performing deal on average. They are best reserved for early part of the year when consumers are focused on New Year’s resolutions and looking to shed holiday weight gain.
Deals for nail salons round out our top performers, and they do so at the modest average price point of $25. Like hair removal, folks who buy nail deals rarely buy them once and quit. Representing only 9% of the revenue pie means there’s definitely an continued opportunity for this category. In contrast, hair and salon deals, also representing 9%, are priced higher on average yet perform far less effectively.
With beauty deals, we have seen great success with merchants that require ongoing maintenance – like laser hair removal. The merchant gets new customers by offering outstanding deals for a certain number of treatments and performs a quality service that hooks the customer.