Retail focus: Selling out?
Diminishing retail sales is a hot industry topic. With the UK economy still struggling along what the Bank of England has described as a “zigzag” path to recovery from the economic crisis which started in 2008, many beauty and spa establishments have felt the crunch.
Yet Lisa Knowles, director of spa consultancy The Spa Set, believes that missed retail opportunity has been a longstanding industry problem. “There is a general industry aim that 20 to 25% of turnover should be from retail sales,” she says. “Realistically, the figure is closer to 7-12% in most spas. There is certainly an element of people not spending due to the economic climate but I do think the economic downturn has only escalated a problem that has been a major issue in the industry for years.”
So economic climate aside, what factors should we consider when selecting brands to retail and why aren’t we achieving better sales figures? Kirsty Jewson, head of beauty at salon franchise group Saks, which has over 100 salons, explains how the company successfully selects its brands: “We assess Mintel reports, looking specifically at trends in the industry and identifying growth areas. We check that products have been peer-group reviewed and look for prize-winning technology and scientific backing. A major consideration is also what kind of education and training the product houses offer.”
Knowles says she usually advises her clients that two is the ideal number of brands for a new spa, perhaps adding a third as the spa develops. “Any more than that and it tends to dilute the offer,” she says.
Knowles suggests that after a year, a new spa or salon should start to analyse the success of its products by looking not only at sales figures but also at feedback and requests from clients.
Once brands are established, regular sales monitoring is essential. Many businesses do record buyer behaviour yet fail to use this information to their advantage. “Once a brand is in place, spas and salons should have a clear system implemented to monitor what clients have bought so that they can encourage more sales,” says Catherine Whittle, director of consultancy Spa Partners, who has advised many spas and salons on how to reach their retail sales potential.
“So if a person has bought a moisturiser, their system should alert staff that in, for instance, three months, that client will need another one and can be reminded via email, a telephone call or during their next visit,” she says.
Businesses sometimes make a costly mistake by swapping brands too early if they identify poor retail sales. If less than 20% of turnover is derived from retailing it doesn’t necessarily mean you have selected the wrong brand. “A brand should be dropped only if it really does not fit the needs and interests of your clientele,” says Catherine. “Otherwise there is plenty that can be done to boost sales.”
The design, structure, and location of your retail area, staff training and incentives should all be monitored first to see if there is room for improvement before a line is dropped. Retail spaces should include areas where clients can actually sample the products, which can automatically lead to a conversation about their benefits and push the process naturally towards a sale. Testers, combined with special offers, and a staff incentive to sell, create an environment where both the employees and the clients are open to sales.
Whittle also believes that providing a receptionist with effective training in retail can lead to a remarkable increase in sales. “The receptionist is around when the customer is waiting for their treatment and when they are paying at the end,” she says. “This means they could have a significant influence on retail sales. One of my spa clients tried this approach and trained their receptionists to sell. In three months retail sales were up by 50%,” she says.
However, despite a strong focus on retail, particularly over Christmas, salon owners across the country have told Professional Beauty that retail sales in the Christmas and New Year period were tougher than the same period the year before, with increased treatment sales often making up the shortfall.
So it's hardly surprising that many spas and salons are looking at increasing their retail offer to tempt clients with additional impulse buys such as jewellery or homewares to bump up sales.
In the bag
The concept has been used successfully for years in large spas such as Ragdale Hall and Champneys, which stock spa-related products such as swimwear and robes, as well as more diverse pieces such as photo frames and jewellery, often popular with residential guests looking to pick up a last minute gift before returning home.
At Ambience Nail and Beauty Salon, in Morecombe, Lancashire, manager Vicky Kelly has been successfully selling mid-range jewellery, handbags, and scarves for eight years. “I wanted something to make my shop window more attractive so I decided to try these and they were so successful that I’ve continued to sell them. About 20% of my retail sales comes from non-beauty items and they are great for increasing impulse purchases,” she says. “Many people come in just to buy the gift items and I then advertise treatment at the same time. They do extremely well at Christmas.”
Meanwhile, salon owner Maria Mason uses her unique location to successfully retail non-beauty gift items alongside beauty lines in her Bristol-based salon Beauty Time. “I think we were one of the first to do it,” she said. “We set up in an old village post office and because of our out of town location we are the only business in the area selling anything so we decided to take advantage of this.”
Mason carried out a client survey asking what items they would buy if the salon were to open a gift shop. As a result of this research she introduced bath bombs, bespoke jewellery – with the option for clients to have unique pieces made – handbags, scarves, candles, photo frames and a holistic items including gemstones, cards and books with affirmations.
“We do gift boxes and have become legendary for our gift wrapping service. We have people coming in just for gifts now and while they are in buying gifts, we can often entice them to book a treatment.”
However, Mason believes it is important to segregate the beauty and skincare products from the other items. The beauty retail area is by the entrance and the “gift shop” is upstairs, away from reception. Stock is moved every three weeks to keep it eye catching.
Lesley Caster, owner of the two City Retreat salons in the North East of England introduced designer handbags and bespoke jewellery alongside her more conventional beauty and spa products after being approached by a local designer. “I decided to give it a go and it was sold on a commission basis. Following the success of this I then decided to introduce two ranges of jewellery, a bespoke range Pranella, and a costume jewellery range called Park Lane.” Carter then added quirky handbag line Helen Rochfort to the offer. During peak shopping seasons, most obviously around Christmas, she adds extra lines such as scarves and other gifts.
The bags and jewellery are displayed in the reception area, arranged among the salon’s beauty items. Implementing these non-beauty lines hasn’t involved any additional staff training, but therapists are strongly incentivised to sell, with the same levels of commission that they would get for selling beauty products. Caster sometimes even runs joint promotions such as 10% off jewellery if you book a certain treatment.
Whittle encourages spas to diversify in this way, so long as the products fit the target market. A high street beauty salon probably won’t succeed selling swimwear whereas a spa with pool facilities could be successful. She advises testing non-beauty products with an incentive to see if it will work for you. “One of my clients organised a very generous staff incentive to sell a £150 bikini. This resulted in masses of the seemingly expensive product being sold,” she says.
The movement toward less traditional retail products does have its critics within the industry, however. Jewson comments, “While I understand that the beauty industry has to consider impulse purchases to increase their retail sales, they should generally concentrate on their main areas of expertise. It’s difficult enough for some therapists to sell at all.” She says Saks already has two categories for inspiring impulse buys – lipsticks and nail polish. “These are top selling items that are appropriate for the target market. The sector doesn’t need to diversify into fashion and gifts.”
However, Mason says the non-beauty lines never detract from homecare retail at Beauty Time. She does a lot of retail training with her staff, including role play, and involves them in the buying process. “My staff range in age from 17 to 60 and are all very different so asking their opinion on what to sell helps cover the whole target audience. They seem to enjoy selling non-beauty items. I think it’s a really good thing for beauty salons or spas to sell these gift items as well as beauty products but you do have to divide the two and the emphasis has to remain on skincare.”
Knowles isn’t a strong advocate of spas and salons selling fashion items but reiterates that key to any retail success is understanding your market. “I wouldn't say a blanket ‘no’ to selling handbags and jewellery. If you understand your clients and it works with your market then it could be successful but it’s not a band aid for fixing failing beauty retail sales.”
Caster says that her non-beauty items only account for 2% of retail sales. “People still mainly buy the beauty products but view the jewellery and handbags as an extra treat. It’s another stream for revenue. I know of at least four other salons doing it in the local area and here it seems like the trend will increase in the future.”