As boutique fitness and beauty services face long roads to economic recovery, ClassPass announced on Wednesday new partnerships with on-demand beauty companies Priv in the U.S. and Blow LTD in the U.K.
Starting in Austin, Tex. and New York City, Priv’s on-demand manicures, pedicures, haircuts and blowouts will be available to ClassPass’s 1 million members. Blow LTD’s same services will be available in the Greater London area. Six-year-old Priv, which merged with BeGlammed in June 2019, has over 500,000 customers and over 30,000 beauty professionals on its platform. ClassPass has offered beauty and wellness services, such as blowouts, through independent salons since 2018. Currently, beauty and wellness service bookings are rebounding faster than fitness, according to Kinsey Livingston, ClassPass vp of partnerships. She added that fitness bookings globally are back to 50-70% of pre-coronavirus levels, while wellness and beauty services are back to 60-80% of pre-coronavirus levels.
“As you can imagine, people feel safer with a one-to-one service versus being in a group fitness class. Ultimately, we want people to be able to spend their credits, and many people had saved up their credits before the pandemic,” said Livingston. “Especially during Covid-19, we’ve seen an increased interest in services like meditation; we are looking toward a more holistic wellness experience.”
ClassPass members can select the services through the app, and within 24-hours, ClassPass will match them with a stylist or technician based on their hair and location preferences. ClassPass members are able to book with credits, the value of which differs between Austin and New York City. There are already over 5,000 wellness, beauty and spa partners on the platform, but Priv and Blow LTD are the first at-home services. ClassPass typically offers three or four tiers of memberships, which also differ in price between markets; Austin’s tiers range from $39 per month for 21 credits to $99 per month for 60 credits New York City’s tiers range from $49 per month for 27 credits to $159 for 100 credits. The new beauty services range from 24-50 credits each, in all markets.
ClassPass forewent any revenue commission from fitness partners between April and August for its livestream platform which launched in April, and approximately 60% of its customers have tried the virtual workouts. At the onset of Covid-19, ClassPass’s revenue dropped by 95% in 10 days. ClassPass implemented a new rollover policy in March, so all unused credits would not expire, and members could also cancel at any time.
Priv and Blow LTD pre-negotiated a revenue share agreement with ClassPass prior to the partnership launches, with ClassPass taking a “small commission” off of each reservation, said Livingston, though she declined to state specifics. ClassPass has been criticized in the past for its payout model to fitness studios, with a story in February from Vice stating that some studios described the discounted price they’re required to accept from ClassPass as financially untenable. At the time, Vice reported that ClassPass’s commission in 2019 was “typically around 5%.” Seven-year-old ClassPass raised an additional $285 million in January, pushing its valuation to $1 billion. In April, the company furloughed or laid off approximately 50% of its staff.
The profitability of this partnership is paramount for Priv and Blow LTD. Though on-demand services may be better poised than other in-salon services due to lower overhead and one-on-one offerings , they are not out of the woods. On-demand services began to resume in New York City in late June, with some companies like Glamsquad only offering nail services in Los Angeles and Florida at the time. Glamsquad suspended services in March and debuted its products on QVC in May, adding haircutting services at that time. Scott Dennis, Priv assistant marketing manager, said Priv did not furlough any of its full-time staff and is was on track to achieve pre-coronavirus levels of revenue by the end of the year.
“We’re seeing a lot more haircuts and manicures being booked, even though these services were traditionally performed in a salon,” said Dennis. “These are becoming our focus, as opposed to blowouts [in pre-coronavirus times] for people who were going to an event.”