My first conference session was a case study on how a company called CPI, which operates in-store photography studios under different brand names, acquired and reinvigorated a digital photo business between 2007 and 2009. This particular business was located within Walmart stores. Annually, 140 million people walk by a Walmart check-out wall, and 80 million of them walk by 4 x monthly! Amazing to hear that even with those numbers, businesses need specific marketing strategies. The digital photo business has, much like the spa business, taken a hit in the last couple of years as shoppers scaled back purchases. One of their challenges was the fact that “everyone is a photographer today, we take 50 pictures to get 1 good one!” according to Ken Nisch. Over the last 4 years, the 6.8 billion dollar portrait industry has declined 25%. CPI updated their brand-promise, improved store appearance, better integrated marketing with the Walmart message, and instituted a number of other ideas such as loyalty programs and free samples, resulting in increases in average ticket, and customer satisfaction and loyalty program scores. Ken Barnett of MARS advertising said that the basic business proposition was to make the portrait process “an experience, not a transaction.” Sound familiar? It was interesting to see how many of the aspects of the portrait business were similar to a spa. Only difference was, they were able to grow sales 10% from 2009 over 2008. Must be all of those Walmart shoppers.
Joanna Felder and Bess Anderson of Chute Gerdeman gave an exciting presentation called “Retail Visual Merchandising, The Return of Storytelling.” As much as I love my job, these ladies have it made; they travel the world, go shopping, and take pictures of stores. Yes, it’s possible to do some amazing things with store design and merchandising when you’re a big brand with lots of cash, but they also showed creative ways to evoke feelings and ambience with the use of color, and evocative props. It was a wonderful presentation about standing back and really looking at your retail space; is it inviting? Does it tell a story? Does it connect your brand and your customer in meaningful ways? Is there a “tone of voice?” My takeaway was, do more shopping! Seriously, spas can learn a lot of lessons in retail stores, where selling things is their only business. Spa retail can be pretty uninspired; my prescription is when you travel or even just when you go to the mall, visit spas, salons and stores (and not just beauty product stores) and make notes about what catches your eye. Be creative, think outside the box, and just try it! If it doesn’t work, you’re going to change it soon anyway.
My last session of the day was entitled “Destination + Impulse, How to Influence and Guide Shopper Behavior,” presented by Patrick Rodmell of Watt International. Rodmell reported that 60% of brand selection occurs within the store. Of the 40% of the decision that’s made outside the store, 70% of that is long-standing brand preference, and 34% is “product benefits on the package.” Makes sense, especially in retail environments that don’t have licensed professionals to advise the clients. Many large retailers are also focused on increasing margins through private label brands, and emphasizing emotional connections to make shopping an “experience” for the consumer, not so transactional. Maybe they’re learning from spas!
Rodmell shared many great insights, which I’ve simplified here:
- Retailers need to remain relevant with mobile applications (SpaFinder will blaze a trail for us with this one)
- Sensory engagement is key (Whole Foods, Trader Joes, Apple)
- Across America, 30% of retail space in banks is redundant (sounds like an opportunity for someone)
- We have to be focused on the need behind the need – the emotional connection (this I think spas do pretty well)
- Authenticity is a core value of this generation
- Customers don’t want more choices, they want the right choices
Lastly, pay attention to your brand. Rodmell asked the audience of 500 if they’d buy a Nike sports drink (most said yes) or a Gatorade running shoe (most said no). This perfectly illustrates the power of a brand; we think of Gatorade as a liquid, Nike is more of a brand. In the spa industry, we need to continue to emphasize broader concepts like wellness and lifestyle management, engaging our clients on a deeper level, and steer away from the transactional feeling.
More on Day 2 to follow.