Mr. Henkin

Architecture & Design

Boosting Your Spa Retail Sales – A Golden Opportunity

By Gary Henkin, President & Founder, WTS International

Whether you are just now considering the addition of a spa or if you have an existing facility, an effort should be made to focus on lifting your retail sales to higher levels of service and profitability. A spa can produce revenue and profits in any number of ways, but one of the most important is to have a vibrant product and retail area which consistently supports a positive net operating income. Product and retail sales can contribute as much as 20-40% of total revenue with a high profit margin. Thus, to gloss over this area can be a costly mistake.

There are numerous areas to consider that are crucial to building higher product sales and to maximize profit margins. Several important items for consideration are:

• When offering home care solutions to guests, there is the chance to create an ongoing relationship. Thus, encourage the consumer to continue the spa and wellness experience at home and to return to the spa again and again. Few spas do a good job in maintaining a line of communication with their guests which is a missed revenue enhancement opportunity. Spa bulletins or newsletters are important tools in this regard.

• The spa staff needs to be fully educated regarding the products and services sold. Guests should feel that they have gained valuable knowledge that will enhance or improve their lifestyle, health or well being. They will more likely continue with a homecare program if they had an enjoyable but also educational experience at the spa. The sales process should be “stress free” for the guest and a seamless part of the overall spa experience.

• Typically, in a spa environment, there is more time to educate and sell to guests than there is in more traditional retail venues. Take enough time with each guest to educate and explain the benefits of your products and services. In many instances, spas try to usher guests in an out quickly, which can easily render an impression that the service staff simply don’t care. This approach can produce a negative consumer impression which is difficult to combat for future referrals.

• Bundling of retail services can take a number of forms. For example, putting two products together along with a “Goes Well With” sign encourages the purchase of both products. Find an easy way to gift wrap items and make it convenient for guests to purchase. Using gift with purchase (GWP) promotions are also a good way to bundle retail; work with your product vendors to gain access to free samples or giveaways that they will send to you for use in GWP programs. Rewards are another easy way to package services; as an example, if a guest purchases a gift card for $100, he/she could receive a $25 voucher with a time limit to encourage the guest to return.

• “Bounce backs” are also effective in enticing guests to return to the spa. These promotions can include creating a gift card (e.g. $20) to hand to the guest upon check out from the spa for the next service booked. Another idea is to send out a thank you note to existing clients offering a dollar amount off of their next service with an expiration date to promote a sense of urgency.

• Discounting can also be effective as long as it is used sparingly. This can feature specific items for promotion as a gift or special value. Discounting ideas can include offering $20 toward a product purchase (as opposed to a percentage discount); specific dollar amount discounts are far more effective than the percentage off option. “Shop Til You Drop” Fridays or “Two For Tuesday” promotions are also effective which can offer discounts to your members, guests, etc. You can also target special groups such as nurses, teachers, police officers, teens, garden clubs, wedding planners and local businesses.

• Bumps, down selling and referrals should also be featured from time to time (typically about 45% of your customers will buy into the bump). As an example, adding a manicure at a dollar discount to a guest’s pedicure is usually a successful add-on event. Also, consider creating a special event for your top 50 clients - send them a gift card either for their own use or that they can distribute to a friend or relative. This is a “we appreciate you” gesture which usually pays dividends in additional visits to the spa from new patrons.

Other key points to consider to boost retail and product sales include:

(a) Work on improving your product vendor relations as they can be your best partner in exposing and promoting retail sales. This can involve focused training and educational seminars for the staff and creative staff incentives.

(b) Make sure that your service provider staff really understands what they are selling and that they are selling not just the product(s) but the “benefits” to the guest.

(c) Turn your dead space at the spa into viable retail nooks that complement the sales process.

(d) Add value for the consumer through up-selling techniques while increasing your average ticket price.

(e) Post individual sales goals for the staff and consider offering team incentives and bonuses for meeting goals.

(f) Eliminate dead stock to free up inventory dollars for purchase of new product. All too often, spas keep inventory that isn’t turning over on their shelves for too long. Consistently evaluate what is and isn’t moving and make changes as required. Make sure that your “Top 10” sellers are always in stock. Carry various categories of stock such as skincare, gifts, clothing, homecare etc.

(g) Consistently change displays and check to ensure that they are spotless. Lighting is very important as well. The retail/ front desk staff should be acclimated to customer needs or concerns, and they should be readily available to address guest inquiries.

(h) Staff should be incentivized to move product. That said, it is crucial that they are well trained and extremely knowledgeable regarding treatment options, product content and the benefits associated with those products. Shift meetings can emphasize a “product of the day” discussion.

(i) Try to encourage the staff to sell products outside of their own special disciplines.

(j) Talk about the products during a service and explain why the products are being used. Educate the guest at the conclusion of a service and recommend practices and products accordingly.

(k) Display retail product at checkout so the guest can’t miss it. If you have testers, put these out for the guest to touch and feel.

(l) Tell a story with retail: pick display areas that can showcase a collection of products to show what the guest can bring to the pool or to a great bath experience.

(m) Rotate retail displays periodically.

(n) Don’t put your easy selling items at eye level as your guests will find them anyway. Other less popular items should be placed at eye level to allow guests to “discover” items they may have missed before.

The aforementioned items are but a few considerations necessary to enhance your spa/ retail sales. Most important is to constantly train and re-train your staff including management, service providers and receptionists. Don’t ever make assumptions that they are entirely knowledgeable and motivated unless you see it directly through their actions, guest interaction and productivity. They must be able to follow through on all of your marketing initiatives and promotions in order to boost retail sales and maximize the opportunity for net profits at the spa. Staff buy-in will translate into more revenue, a happier service force and a guest who is well pleased with the overall experience.

President and Founder of WTS International, Gary Henkin has 30 years in the planning, design and management of health clubs, spas and athletic facilities. He has developed feasibility and needs assessment studies for spa and/or health club properties. WTS has become one of the world’s largest and fastest-growing leisure consulting and operating firms. The firm has about 1,000 employees worldwide and provides services to hotels, resorts, luxury residential properties, exclusive golf and country clubs, day spas and real estate developments throughout the United States and overseas. Mr. Henkin can be contacted at 301-622-7800 or ghenkin@wtsinternational.com Extended Bio...

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