The Science of Retailing

 

We hear it all the time, “Spas have to retail!” But even when we understand the imperatives behind the statement, which include margin opportunity, increased sales per square foot, and higher ticket prices, many spas don’t always know how to retail. Just putting up a few shelves with products on it, as is the case in 90 percent of spas, doesn’t necessarily count as retailing. Retailing professionals have developed a laser focus on the science behind moving products out of the store, because without appointments and services to market, that is their sole source of revenue.

According to the International Spa Association’s 2011 U.S. Spa Industry Survey, 93 percent of all spas participate in retailing products, and of those, skincare is the predominant commodity, offered by 57 percent of the retailing spas. Retail comprised 11 percent of revenue for most spas, with slightly lower numbers in resort spas, bringing the estimated total value of spa retail for 2010 to $1.467 billion, or an average of $43 per guest. While $1.467 billion sounds like a lot, from a retailing standpoint, it represents annual sales of just one company, the 400-store chain ULTA. The U.S. spa market size, however, is estimated to be in the neighborhood of 20,000 units. So, it looks like we have some room to grow.

If you’re a spa owner or director, you probably spend a lot of time and effort evaluating what to sell, but not as much focus on how to sell it. Consider adopting the practices of other successful retailers and discover some helpful ideas.

 

Stores to Emulate

Clients respond to familiar visual cues that trigger the “shopping” reaction. Sephora, which boasts more than 750 stores in 17 countries and carries more than 250 brands, is a prime example of a place that triggers such a reaction and is a great place to visit for ideas. Does the exterior of your spa communicate what is available inside? If you have windows, do you use them to showcase products? Can someone on foot approach your spa at any time of day, from any direction, and receive clues about what products are available inside? Once inside the spa, the amount of space devoted to retailing will vary widely, from a small corner to 1,000 square feet or more of purpose-built retail space, but the same rules apply either way. How the lighting, shelves, and merchandise they hold is configured is referred to as “visual merchandising.”

Consider the movement of clients in the space. Beauty products come in a variety of shapes and sizes, and yet for most spas, they need to sell themselves. Women, in particular, are interested in reading the ingredients of products they buy. Paco Underhill, CEO of the behavioral research company Envirosell, shares in his must-read book Why We Buy: The Science of Shopping (Simon & Schuster, 2000) that women spend an average of 13 seconds reading a facial cleanser label and 16 seconds reading a moisturizer label. 

Underhill also shares that most people, upon entering a store, will exercise their right-hand bias by drifting to the right, making that an ideal spot for a large eye-catching retail display. This display can also function as a sort of “traffic bump,” slowing clients down so they can start to take in what is around them. Canadian retailing consultant Barbara Crowhurst suggests three-foot minimums in aisles to create better traffic flow, and to keep in mind that product selection is made from an area that stretches from the knees to six feet above the floor. Any products placed above or below that space are not going to move. Lighting both highlights the products and creates mood through the use of varying intensities. Natural daylight is best, especially for beauty products, but not always available, so a combination of daylight-balanced fluorescent for a wash of light and track-mounted halogens for spotlighting is ideal.

 

Visual Merchandising Concepts

Most spas merchandise products by brand, rather than by function or category, and that generally provides consistency in appearance as products from the same brand are likely to have similar packaging, coloring, and graphics. But there are additional principles of display to consider. Balance involves the size of the objects and their symmetry. Marla Malcolm Beck, CEO and founder of the fast-growing beauty retailer Bluemercury, cautions, “You don’t want your display shelving to look like a museum, or clients will feel like they can’t touch the product. Once someone touches a product, they are mentally invested in looking at it and thinking about it.” Proportion is important, because disparate sizes placed next to each other are difficult for the eye to process. A .5-ounce bottle next to a 16-ounce bottle is not pleasing to the eye. Emphasis means that each display needs a focal point. This should be a product rather than a prop. Emphasis can be created with size, color, and even texture. Regular spacing of products diminishes emphasis, while repetition of products can increase their importance. Rhythm creates patterns through the use of light and dark or size to lead eyes easily through the display. This concept also takes into account the fact that English-speakers read from left to right, so displays should be oriented this way. Color is a great way to catch the eye. Warm colors are more stimulating, and cool colors create a sense of relaxation.

 

General Display Guidelines

Utilizing the above guidelines in beauty retail settings, we turn to some experts for advice. Beck has found that displaying high quantities of product, and a lot of a certain brand, draws in clients. “If you look at clothing retail, no one ever wants to buy the last shirt, they want to shop where there are many shirts, and the stores are full of merchandise,” she says. Therefore, the lone product highlighted on a shelf is not likely to draw any buyers. Crowhurst likes to use uneven numbers of merchandise in tight groupings and to ensure that you are showcasing products that are relevant—seasonal products should be on the shelves six weeks before the season begins. Carol Phillips, founder of beauty retail consulting firm BeauteeSmarts, says, “You’ve got to change your displays regularly. If clients see the same products arranged in the same way time after time, after two visits, they stop looking, and stop buying.”

When it comes to promotions, retailing expert Charles Compton, CEO of Mars Solutions, advises to “start with the story you are trying to tell, perhaps around an event or holiday.” Compton also suggests a less-is-more approach when taking the story-telling approach. “In terms of size and quantity, larger items and smaller quantities make it easier to tell your story quickly to the client,” he says. “Make sure you create different heights in your lifestyle displays by using risers, and make containers for beauty products more reminiscent of home by using trays, bowls, and baskets.”

If your spa puts on special events, using a specific color can be an effective marketing tool. Beck reports that, “During an event, we like to designate a special color and create a space in the store using that color, perhaps with a tablecloth, refreshments, and product display, all within the chosen theme.”

Of course, basic retailing guidelines must also be observed. The right number of products on the shelves is crucial. Too much makes you look like a discounter, and too little won’t drive sales. Ensure that your shelving makes the best use of the space, and keep back-stock out of sight. All products should have pricing information readily available. Underhill advises that baskets or bags placed throughout encourage shoppers to fill up. Remember, you’re trying to create an environment, not just an area. At the recent GlobalShop national retailing conference, Dan Flint, Ph.D., professor of marketing at Proffitt’s Inc. and director of the marketing Ph.D. program and the Shopper Marketing Forum in The Department of Marketing and Logistics at University of Tennessee, says, “The most successful retailers today are those who are staging experiences, rather than merely delivering goods and services.”

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