Baird’s Takeaways from The Medical Spa Show 2025
Within Baird’s Global Consumer Practice, our Beauty & Wellness team covers traditional beauty categories, including skincare, haircare, fragrance, color cosmetics and beauty services, as well as the entire spectrum of wellness pursuits. Baird’s Beauty & Wellness group focuses on the “Six Dimensions of Beauty & Wellness” below and have established longstanding relationships and deep industry knowledge in each area of focus.
The Key Numbers
Within the “Better Appearance” arena, the medical spa and aesthetics industry continues to be ripe with opportunity and a key vertical for our team. From 2010 to 2023, the industry expanded more than sixfold from about 1,600 locations to more than 10,000 and the average annual revenue per spa more than doubled during that period, reaching almost $1.4 million. Nationwide, med spas were a $15 billion business in 2023 (another statistic offered that it was a $22 bn industry at the end of 2024) and most analyses show the industry continuing to expand by about 15% per year in the future.
Single-location spas make up 80% of the sector, with facials being 35% of why consumers go to a derm or med spa, fillers at 16% and hair removal at 13%. All the numbers point to a massive opportunity to roll up and consolidate the space, with the biggest challenge being scaling operations to maintain standards and quality of service.
Knowing med spas are an area of interest for investors and consumers, members of Baird’s Beauty & Wellness team recently attended The Medical Spa Show by AmSpa in Las Vegas. We connected with medical aesthetic professionals, industry thought-leaders, entrepreneurs and more to discuss the latest trends and innovations.
The Medical Spa Show by AmSpa Key Themes
- Clinical Advancements & Safety - There was an emphasis on cutting-edge clinical education, focused on advanced techniques, safety protocols and complication management, particularly for injectors and laser practitioners.
- Business Optimization & Financial Strategy - Focus on tactics operators can use to enhance profitability, understand key performance indicators and have effective team leadership. There was also discussion on how capital markets and investors view unit-level profitability.
- Consistency of Service Across Locations is Key - Consumers have been historically loyal to a particular aesthetician, not to a brand of med spa. Operators are trying to boost loyalty and drive consistency across locations using a new technology to remove some of the “human element” and leverage human capital and oversight to ensure consistency across locations.
- Creating “Stackable Solutions” To boost Frequency of Customer Visits - Experts shared that the optimal mix of services is key to maintaining customer engagement. Consumers that use Botox 2-3x per year can also visit more frequently for laser treatments, topical treatments, etc. Offering personalized solutions is key to ensuring consumers are pleased with the results of their treatment and view quality as a key differentiator.
- Legal & Risk Management – Throughout the conference there was a lot of discussion around regulatory challenges and best practices for maintaining compliance in an evolving legal landscape.
- Marketing: Creating Strong and Loyal Membership Programs - The medical spa industry is an increasingly competitive market. Many discussions centered on effective marketing tactics, patient engagement, and brand positioning to drive growth and demonstrate the value proposition of a membership.
- Biohacking & Longevity Medicine - These topics are emerging in the industry, especially around treatments like peptides, NAD+ therapy and bio-stimulation. This highlights their integration into aesthetic practices.
- Functional Wellness Integration - More providers should look to incorporate holistic health approaches into aesthetic practices. There is a growing trend towards comprehensive patient care, including weight loss, not only for the injections, but for the after-effects (i.e. loose skin).
Role of Med Spas in Broader Branded Beauty as a Growing Channel
Branded beauty companies are looking at the growing consumer preference for more scientifically backed skin care treatments and in some cases, are reformulating their products or repositioning their brands to appeal to these derm-focused consumers. With overall growth in the U.S. beauty industry expected to be at 4% over the next few years, we note that growth in the skin care segment is expected to be 5% and in the derm-skin care segment is expected to be 6%. Furthermore, a recommendation from their dermatologist remains the #1 reason why a consumer chooses a particular skin care brand. Despite strong growth for the skin care industry in recent years, brand owners in the U.S. still see ample room for growth ahead, as skin care products as a percentage of total dollars spent in the beauty industry is only 35% in the U.S. today, compared to 38% globally, boosted by market such as Korea and China, where skin care represents 55% and 60%, respectively, of total beauty industry spending.
Branded beauty companies are also looking at the med spa channel as an increasingly attractive shopping destination for consumers, as many consumers opt to purchase a product that their service provider recommends right after the service treatment. While this incremental purchase can be lucrative for the med spa (or dermatologist) in that it boosts the overall value of a consumer’s visit, it is also a way to keep customers coming back. Consumers are often prompted to return to the med spa when they need a refill or replenishment of the product purchased on site. To that end, service providers are keen to ensure that the products that they sell on-site are not available elsewhere (either online or at brick-and-mortar retail) to prevent the customer from purchasing the product elsewhere.
To discuss these topics further, contact a member of our Beauty & Wellness team.
