We are thrilled to announce our recent investment in Heyday. Founded by Adam Ross and Michael Pollak in 2015, Heyday is a skincare services platform that provides customers personalized facial treatments, curated product recommendations, and expert advice. Heyday delivers a new model: an omnichannel solution, made up of physical locations for in-person facial services as well as digital touchpoints that are tied together seamlessly by personalized data on their customer.
How We Found Heyday
The skincare category is incredibly crowded. Our machine learning platform, Helio, tracks 10,205 different skincare brands headquartered throughout the U.S.
Headquarter Locations of US Skincare Companies
In the sea of skincare brands, Helio identified Heyday as an outlier. We originally found the company by using Helio’s brand model to surface the strongest companies across a number of different metrics that we have determined are important in predicting a brand’s future growth potential. Heyday ranked as a 10 in our brand model, meaning it was in the top 10% of skincare companies with high follower growth. More specifically, after learning more about Heyday, we used Helio to help us drill into the skincare services landscape so we could develop our own thesis on innovative service models. Our work highlighted that Heyday’s vision to develop an accessible omnichannel skincare solution using data was incredibly differentiated.
A Category Ripe for Innovation
The skincare treatment and services market is $6.2 billion and growing at low single digits annually (IBISWorld, 2017). Although the market is massive, it is also highly fragmented and is dominated by a long tail of independent, single unit boutiques. Additionally, there has been minimal innovation in the category despite the fact that consumer preferences have evolved. Millennial consumers want to engage with skincare brands and services in a more personalized way. Whereas prior generations invested in skincare products as a reaction to signs of aging or sought out a spa service as an infrequent indulgence, the millennial and Gen Z generations approach skincare more proactively. They recognize that skincare is part of their health and wellness routine which requires consistent maintenance.
Additionally, the traditional spa experience does not resonate with this younger demographic. Experiential retail must be connected, intuitive, authentic and digital first. Step into Heyday and you will quickly notice how immersive the experience is. From the highly curated product portfolio of trusted 3rd party brands, to the modern design aesthetic throughout the experience, Heyday transports you into a world of skincare to escape from the daily grind. Post-treatment, Heyday integrates digital touchpoints throughout the journey including a synopsis of your visit, recommendations of products to purchase in the future, or integration of your profile to easily replenish your favorites. The whole experience feels refreshingly effortless.
Delivering A Strong Value Proposition
Heyday is perfectly positioned to capitalize on the shift in consumer preferences and aims to bring new consumers into the in-person treatment market who want access to skincare expertise that is tailored to their specific needs, but ultimately delivered at an attainable price point. Heyday’s signature 30-minute facial starts at $65, a stronger value proposition for an entry price point than traditional spas. 90% of consumers who come to Heyday have never or only occasionally had a facial in the past, underscoring Heyday’s opportunity to grow the category with new customers. Additionally, those new customers share their experience with more new customers creating an organic, highly viral flywheel effect leading to 60% of new customers coming in to Heyday through existing customer referrals.
Furthermore, Heyday becomes an educational expert-driven resource, available through both in-person visits and digital touchpoints. The team of over 100 well-trained skin therapists helps to build powerful and personalized relationships with customers. When we performed analytics across Heyday’s consumer reviews, we found that almost 75% of consumers mentioned their skincare therapist by name in their review. To us, that is a signal of the strength of the relationship they developed which becomes core to the Heyday experience. The brand has managed to maintain this level of personalization and overall engagement while scaling. Since launching the first unit in the Nomad neighborhood in 2015, Heyday has opened 5 additional locations in both New York and Los Angeles.
We look forward to partnering with Heyday as the brand continues to grow, connecting with more consumers to deliver personalized skincare solutions to help them achieve results. We are fortunate to co-invest alongside Fifth Wall Ventures, whose real estate knowledge and expertise will be critical as Heyday scales into new markets. We believe that Helio can add unique value as we think about ways that we can help identify best-in-class 3rd-party brands that can be incorporated into relevant parts of the Heyday customer journey. We ultimately believe that Heyday represents the future of skincare, sitting at a unique intersection of trusted expert resources, data-driven personalization and experiential retail to deliver a one-stop skincare solution. We are excited to be a part of this journey and look forward to working with Heyday to reinvent the skincare experience.