Part 1: Make the Switch
“What are we going to do with all of this?” is a question that’s been asked by many in the aesthetics industry as they stand in front of a full shelf of product, or as they unbox their most recent delivery.
Product sales are one of the best sources of extra revenue for your business. It’s also one of the biggest revenue sources that is underestimated and overlooked, so it typically underperforms. It’s a vicious cycle: You meet a product rep, attend a trade show or hear about a product that promises high sales, marketing support and makes you feel like this is the break you’ve been waiting for. You’re excited, and so is your team. You place an opening order, it arrives, you fill your shelves and then… you wait. You might experience some sales at first and then, crickets. The product lingers, sales are low and interest from your staff and clients gets stale. What happened? This experience can leave even the most seasoned owners and managers feeling disillusioned or discouraged about investing in products.
Imagine a different scenario: In addition to your menu of services as a source of revenue, what if you added products that enhanced your clients’ experience of your spa or brand even after they leave your establishment? This is exactly what a carefully selected range of products can do, along with creating a new, continuous source of revenue.
In my travels and work with spas, salons and clinics across Canada, I’ve gathered some best practices that businesses of any size and style can start implementing today.
1. Adopt a retail mindset
Make the switch: Instead of thinking about products, think about retail. Treating products with a retail mindset versus a product mindset is everything. Here’s why: When you think “products,” your focus is going into inventory, categories, ingredients, staff training, client education and asking questions like, “What would sell best?” These are all important to consider and have a place in your business, but most professionals are already great at knowing their product lines and memorizing ingredients. Now, watch what happens when you think about retail: Your focus shifts to goal setting, displays and visual appeal, merchandising, how clients buy, why they buy and the overall client experience.
You may be asking, “Do you want me to turn my spa into a store?” My answer is: Your clients already see your spa as a “store.” It’s a place they chose to buy/shop by investing their time and money into their wellness, appearance, relaxation and overall well-being. So, it would make sense to have a full range of ways to meet these needs and retain your clients’ time and money, rather than allowing them to seek and purchase products elsewhere.
2. Follow the rules of retail
When it comes to being profitable with product sales, here are two of my favourite rules of retail that top spas, salons and clinics follow:
Eye level is buy level. This is a basic principle that you, as a consumer, experience every day. Display your products at eye level or risk having them blend in and get completely missed. Being mindful of your client’s experience, most of their time at your business is spent sitting, waiting or relaxing in a service. Use lower shelving in reception areas or try creating a cluster of products on a mirrored tray to display testers (which need daily maintenance to be kept immaculately clean at all times!). Avoid the “wall of product,” including taking all or most of the inventory and lining them up or stacking them in any way. Seeing too much product on a shelf sends a message to the client that “there is plenty” and they don’t need to buy now. Instead, consider using existing shelf space for signage that clearly states the product category and/or what solutions it may provide. For example, use category headings such as: hydrate, moisturize, peel, relax, energize.
Try it to buy it. Mystery shoppers report being 82 percent more likely to purchase a product after reading a label. Product packaging does so much of the explaining and educating for us – so let the label do its job. Consider having a large-print version of the label for your five top-selling products and watch what happens. Note: If your client samples the product via a tester, the likelihood of purchase climbs to 90+ percent.* Consider having a small, designated area as a tester bar. Feature products by rotating them weekly or monthly, or feature a single product with the sign “Best Seller” and be ready with inventory to sell. A client recently implemented this practice to the tune of increasing product sales from an average of $800/week to $2,600/week and has maintained those results for 18 months.
3. Being picky earns you more
Most spas and salons carry too many product lines. It’s confusing for your team and especially for your clients. Strategically selecting your inventory and being thoughtful about your retail offerings results in a better client experience and higher sales. It seems counterintuitive to shrink your product selection, and yet expecting to sell more strictly by carrying more products has long been proven untrue. Take, for example, SmartSpa:** In 2006, this 12-employee spa carried 12 product lines with sales of $156,000. In 2011, they curated their product lines to only six and increased sales to $323,000; in 2015, they reduced to three product lines and their sales were $547,000.
4. Integrate products into your consultations
I’ve saved the best for last! Too often, product suggestions end up being an afterthought in the client experience. You perform a great treatment and somewhere at the end of the encounter, you say, “And by the way, we have this great product you may want to try.” By far the most effective way to increase your revenue through retail sales is to incorporate the product recommendations directly into your client flow, meaning somewhere in the treatment. While this consultation process can be done in a more formal assessment appointment, it can also happen in a five- to 10-minute pretreatment assessment of what their major areas of concern are and inquiring as to what products they are currently using and their level of satisfaction with these products.
Professionals sell solutions, not products or services. Consider this success story: A busy salon/spa had average product sales, meaning they hovered within the same two- to five-percent increase year over year. They changed their scheduling slightly to allow for a five- to 10-minute consultation process to ask a few well-crafted questions that helped each service provider learn vital information about their client’s concerns and goals. Their product sales jumped an average of 24 percent year over year from 2015 to 2018.
When it comes to incorporating retail products in their appointments, service providers too often expect a client’s “no.” Remember, clients want products that will prolong or enhance the service or treatment they’ve just had. Having a strong retail plan in your business not only sets you apart from your competition, it will increase staff engagement. Imagine having extra cash flow to continually replenish your stock, or what it would be like to use product revenue towards your payroll costs or travel and education for you or your staff. It’s possible.
TO DO: Start clean. Take all products off the shelf and clean the shelves. Remove everything that has expired and vow to never let it happen again. Pull what’s going to expire in the next three months and focus on selling those using the tips above. Make room for new items!
Stay tuned: In the next issue of Spa Inc., we’ll focus on more strategies to boost your retail sales.