Over the weekend, Acara Partners’ Founder and CEO, Francis X. Acunzo, was a speaker at the virtual Aesthetic Next Conference. The Aesthetic Next Conference, put on by Aesthetic Record, was a weekend of education covering the clinical, technology and business aspects of an aesthetic medical practice.
Fran’s “State of the Industry” webinar, attended by well over 300 people, discussed conducting business in the age of COVID-19. He covered the recent shutdown due to COVID-19, what the industry’s new normal looks like, demand theories, government support and what the future holds.
The Recent Shutdown
As COVID-19 became widespread in the U.S., aesthetic practices across the country began shutting down in mid to late March. Most practices were closed from late March to June 1.
While practices were closed, the continuation of communication was crucial. They shifted their messages from marketing promotions to ones of empathy, support and education. It was critical to communicate via social media, email and through their practices’ websites to continue to talk to their clients just as if they were with them in the practice.
Telemedicine was an important utilization, too. When things shut down, practices turned to telemedicine to conduct consults virtually. It was a great tool that allowed them to acquire new clients despite the circumstances.
The New Normal: What Does it Look Like?
An extensive use of PPE. Staff wear gloves, masks and face shields, and shields are set up at the reception area. Even patients are required to wear masks when appropriate during procedures. New disinfection protocols have been implemented to clean the rooms between each procedure.
Patients can no longer wait for their appointment in the waiting area. Rooming patients has changed to having patients wait in their cars until a staff member goes out to them to complete the check-in process and run through various COVID-19 safety precautions such as temperature checks, consent forms and notification of any possible exposures.
As they try to limit the number of people in their space, some practices have opted for continued use of telemedicine. Consultations for most procedures can be done virtually before the actual service.
Pent up demand. This was seen once practices reopened their doors. People who had services booked during the shutdown period had to rebook, and wanted to be seen as soon as possible.
The Zoom Theory. The Zoom Theory accounts for the unprecedented amount of time people have spent staring at themselves during their virtual meetings since the pandemic began. Whether they noticed red spots, brown spots, new wrinkles or sagging skin, people thought to themselves “I need to do something to fix this.” It led to the creation of new clients and encouraged existing clients to book appointments with their providers.
Discretionary dollars were redirected. As people no longer had their daily coffee trips or lunch outings and had to cancel their big summer holidays, all of a sudden they had more money in their pockets. With potentially thousands of extra dollars, we’ve seen many people choose to spend their discretionary dollars on aesthetic medicine.
Market expansion. As a result of newfound free time during the shelter-in-place orders, people began looking into the aesthetic medical industry. People who weren’t already familiar with the industry or treatments began to learn more. Their research led them to their local medspa, plastic surgeon or dermatologist’s office. This increase in new clients led to a market expansion of the aesthetic medical industry.
Market knowledge was finally able to catch up with industry information. For the past year and a half, people have been flooded with industry information. The latest procedures, services, technology and products were thrown at them, becoming too much information for the market to absorb all at once. The shelter-in-place orders created this newfound downtime which allowed people already a part of the market to learn about new procedures. In a way, people had a “self-consultation” with all of the industry information they were finding online.
The government was quick to offer economic support to businesses affected by the pandemic. Our industry was no exception.
The Payroll Protection Program (PPP) allows practices to get 2.5 times the monthly amount of payroll for whatever test period chosen. The extension from eight weeks to 24 weeks will allow everyone to get forgiveness, which is fantastic.
The Economic Injury Disaster Loan (EIDL) was a great opportunity to give practices a firm ground in a time of uncertainty. Many practices received $150,000. It allows borrowers to repay over 30 years with a low interest rate of 3.75%.
Local government funding was available from cities, counties and states, too. They were mostly short term loans with little to no interest rates.
What Does the Future Hold?
In partnership with PatientNOW, Acara Partners looked at the sales of 450 practices across the nation. We compared year over year sales for a specific set of procedures (injectables, non-invasive body contouring, surgery, clinical skin care, laser skin rejuvenation and retail products) from August 2019 to August 2020 for both core and non-core practices.
We found that core practices dropped 7.4% in August. This comes after having a very strong June and July. Conversely, non-core practices had a slight 1.6% increase in August. This is a drop from being up a stunning 30% in June, however, they are still up from August of last year.
This data tells us that the growth since reopening post-COVID-19 shutdowns has slowed. Overall, though, Acara still feels strongly about the continued growth and success of the aesthetic medical industry. Practices had a very strong June, a good July and a decent August. Despite the 7.4% dip in core, we feel these numbers still indicate a strong future for the industry.
Additional Considerations: Why Has the Growth Slowed?
The following external forces could be contributing to the industry’s flattening:
Continued COVID-19 uncertainty. As the prevalence of COVID-19 continues, people remain uncertain. We’re also seeing a resurgence in cases as students return to school and universities.
Civil unrest. As civil unrest continues across the country, it wears on people in more ways than one.
The recession. Six months into the COVID-19 pandemic, it still has a great impact on the economy. As the recession continues, unemployment is still at an all-time high.
The election. Elections always impact the mindset of the consumer.
What Will Impact the Industry in the Future?
As new therapies for COVID-19 become available, people find a renewed sense of hope that an end to the pandemic is in sight. New therapies could lead to fewer hospitalizations, shorter hospital stays and fewer deaths.
Additional shutdowns, most likely at the state, city or county levels, will definitely impact the industry. They most likely wouldn’t affect the industry as a whole, but would certainly affect practices in areas of shutdown.
A vaccine. Having a vaccine would affect our industry in a very positive way. Acara believes that an effective vaccine with the capability for mass distribution will most likely be available in early 2021. Of course, this would be overwhelmingly positive for all businesses and the economy.