With the spa sector subject to increased pressure as consumers review expenditure on life’s luxuries, the expansion of spa retail opens up extra revenue streams to augment the bottom line, says Kathi Everden
It was only a snapshot of US trends, but the Smith Travel Research (STR) presentation on spa performance at SpaExec last year revealed that treatment room occupancies were down substantially and revenues had reached a plateau, but that the average retail dollar per treatment had risen from US$19 to $26 in just one year.
STR vice president Jan Freitag says this indicates that consumers might be substituting at-home spa experiences for expensive treatments in spa facilities.
“In the light of declining treatment revenues, hotel and resort spa directors have a renewed focus on retail as a crucial element to their spa’s bottom line,” she says.
Another survey, carried out by ISPA in May, focused on retail sales and the value of incentives and assistance provided by resource partners, and this highlighted the moves made by spas to boost retail, control inventory and the importance of training.
Results showed that while more than half of spas surveyed had reduced the total value of their retail inventory in Q1 compared to the previous year, there was no significant change in retail revenue, emphasising the focus on moving current product inventory before bringing in new lines or additional products — and also the move to smaller, more frequent orders.
Other results indicated that cost and retail potential were vital factors when deciding on new merchandise and that many spas were loathe to bring in new products in the current financial circumstances when potential appeal and return on investment were uncertain — a trend to which resource partners had responded by introducing lower price point products, smaller size options and discounts on discontinued items as well as increased training.
The top five products in spa retail underline this conservative approach to sales with skin care products at number one, followed by bath and body products, sun care, nail products and make-up — although more than 60% of spas surveyed did also include hair products and apparel in their merchandise — while a September survey by Coyle Hospitality Group and WTS International listed the top sellers as face care (72%), face or body lotions (60%), hair care (39%), bath products (33%), aromatherapy (30%, anti-ageing (29%), oils (20%) and massage tools (9%).
But, if there’s a plethora of goods out there designed to appeal to the spa goer, it is also evident that many spas do not observe best practices in their approach to retail — an area therapists possibly think does not lie within their remit — while spa design itself also does not favour the retail environment.
Of course, retail itself is a science with inventory management, ROI, visual displays, marketing, budgets and research among the key elements — a far cry from the cocoon of the treatment room. But, along with the feel-good factor, customers are buying in to a holistic design for living, where an oil, a cream or a lotion can work wonders far beyond the environs of the spa.
Regional trends
With spa becoming a vital element in the Middle East hotel industry, as well as the concurrent boom in stand-alone operations, the need to make an impact is vital for those spas that wish to rise above the crowd and signature spa concepts can help here, also stimulating retail sales, according to Peter Dowling, managing director of the House of Maria Dowling.
The company works with Puri in Thailand to develop and supply spa products, providing tailor-made products that are available in smaller quantities to suit an independent spa operator.
“With more competition around, there is a need in the Middle East for spas to differentiate themselves, rather than take branded products,” says Dowling. “We can blend essential oils to create a signature product for a spa and then can supply as needed so spas do not have to order in bulk.”
Citing a text book case of spa stimulating retail, Dowling pointed to The Palace — The Old Town, Dubai, where the company created a frangipani/ylang ylang formulation which became so popular in the spa, it was also used as a signature scent in the lobby and then developed as retail for sale in the mini bar as well as the spa.
“In addition, we have been asked for products such as oils, bath products, lip balms etc that can be used for turndown service in-room but are essentially marketing for the spa, while another trend has been for seasonal specials — aloe vera products in the summer, chocolate gels or scrubs for Valentine’s Day —all of which we can provide in small quantities,” he said.
But, for those spas that use established products, it’s the sales skills of the therapist that often determines how big a part retail plays in turnover — although perhaps the key element here is to establish retail sales as a vital part of post-treatment care, according to consultant Anni Hood from Red Cashew.
“The reality is that the therapist is the best equipped person in the team to make recommendations to their client on what products are best for their skin and to gain the results they are looking for; it’s not a question of becoming a sales person but fulfilling completely their role as a therapist.”
Formerly charged with setting up Jumeirah Group’s Talise spa, Hood is well versed in the region’s spa practices and claims there is potential for many operations to boost retail revenue.
“All spas are different but speaking generally, there is still a long way to go for spas to optimise their potential of retail sale,” she says.
“It is vital to have a good range of products and pricing to meet everyone’s purse, and to display the merchandise so guests can touch, smell and test the products — the experience of purchasing retail should be every bit as enjoyable as the treatment itself,” says Hood.
Brand awareness
What also helps is to have a coveted brand; at the Bliss spa at W Hotel Doha, retail already makes up between 25 and 30% of turnover, with top five products including hand and body creams, face wash and the triple oxygen mask.
Retail is displayed in a dedicated 63m² area, but spa director Liliana Matic says there is demand to increase this.
“I wish we had more space as we carry both Bliss and some third party products — we have a products launch calendar and the displays are changed to reflect new merchandise,” she explains.
Matic says that sales incentives are in place for both receptionists and therapists and there is a mandatory procedure to follow.
“Therapists after each treatment prepare a ‘basket’ of recommended products and notes on how to use these — this is then presented to the guests at reception.”
For CHI at Shangri-La’s Barr Al Jissah Resort in Oman, its signature Element products are a top seller, with best selling items including bath robes, Five Element massage oils, music CDs and oil burners.
According to spa director Vanicha Phaphoom, most retail is directly related to treatments that guests experience in the spa.
“This is based on the Element product used for their treatment, pre-determined by a guest questionnaire,” she says.
“We do a Sense of CHI sampler of the five Element oils to help boost sales as well as CHI hampers with oils, candles and incense.”
At The Address Downtown Burj Dubai, spa manager Michael Monsod says spa is already contributing 12% to spa turnover, with ESPA a key brand and facial products among the top sellers.
“Other top products are 24-hour eye complex, revitalising eye mask and hydrating cleansing milk — therapists advise clients of the proper use of products to achieve the desired results.”
Monsod says retail in the reception area is changed every five weeks to ‘refresh the look and keep clients interested’, and other measures to boost sales include sales incentives for staff.
“ESPA has promotions and incentives year round and we have introduced a scheme that is target-based — we are also looking into promotions that will include specific retail items for different treatments.”
For the Emirates Hotels’ Timeless Spa brand, the opening of three spas at Dubai International Airport has opened up unique retail opportunities, according to senior vice president Tony Williams.
“Retail contributes around 20% to spa turnover across the board, but there is a higher proportion at the airport spas,” he says.
“We see more impulse buys at the airport for Babor, Sodashi and Timeless brands — these are not available for retail except at spa outlets so it becomes a place to buy; Sodashi makes up 55% of sales there,” continues William.
“People are spending more on products generally so we have set up purchasing to order in small quantities, on a weekly or even daily basis, in order that product turnover is regulated,” he adds.
For Williams, training and product knowledge among therapists are vital in boosting retail, with Timeless Spas opting for the ‘soft sell’ approach and letting the product quality speak for itself.
“However, we are trialling staff incentives since we have determined from a survey that most spas in Dubai now offer some sort of incentive,” says Williams.
Incentives work
It’s a view strongly endorsed by Chantelle Mason, spa director at the Beach Rotana Hotel & Towers Abu Dhabi’s Zen Spa.
“We have created a competitive spirit by amending the retail commission system for staff to earn a higher percentage with different targets. We also have ‘products of the month’ to boost slow moving products, giving staff tips on how to sell it and offering a cash prize for the team member that sells the most,” she says.
Mason acknowledges that this focus on retail has helped Zen Spa achieve its targets at a time when revenues are under pressure.
“In the current climate, it has been retail that has boosted our revenues to achieve targets — it has been averaging 14% (of turnover) but in October alone, it reached 28%.”
Financial priorities aside, Mason notes that a retail offering is gradually becoming an essential part of a holistic spa service.
“Coming to a spa now involves more than just a massage — previously the focus was just on treatments but now the focus has changed and training includes retail sales as well as treatments.”
For all the pampering image of spa, she says that best sellers were ones of practical use such as Aromatherapy Associates’ muscle gel and Revive cellulite gel.
“However, we have retail on display in reception, changing this regularly and offering lots of testers, samples and dummy products to give clients the freedom to shop, encouraging them to touch and smell the goods,” she adds.
The final element for Mason is marketing, with a monthly newsletter highlighting a product and treatment of the month.
“We can also link in seasonal promotions such as Christmas or Mothers’ Day gifts or massage oils for Valentine’s Day,” she says.
Key selling tips
- Prioritise retail and make it part of the spa offering.
- Set out your products with a focus on the eye-catching — and use display lighting effectively.
- Think about clear labelling in order that clients can see what is available.
- Encourage clients to touch, try and smell products, rather than locking them away in a cabinet.
- Provide training for therapists so they can educate their clients on the virtues of each product — the soft sell, not the hard sell.
- Institute role playing so that therapists can practice their selling skills and gain confidence.
- Plan, promote and market your wares to consumers.
Top Five Best Sellers
1 Skincare products
2 Bath and body products
3 Sun care
4 Nail products
5 Make-up
