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Retail: Show Me the Money

By Carol and Rob Trow
Posted: March 26, 2008, from the April 2008 issue of Skin Inc. magazine.

Editor's note: This article is the first part of a two-part series regarding the importance of retail in a spa operation. Part two will appear in the May issue of Skin Inc. magazine.

Numbers don’t lie. Do you want more clients, increased profits and a happier team? Two of the not-so-secret keys to operating a successful spa are retail sales and service upgrades. It can be difficult, however, to learn about realistic, measurable, tangible programs that will accomplish these goals. Simply put, this two-part series will result in increased profits, reduced losses, and a more coherent team reward and recognition program if you follow the suggestions provided. This is not rocket science, but rather a course of action coupled with discipline and persistence.

Numbers speak for themselves
       Spa-ing is the fourth largest leisure industry in North America. Revenues were $13.4 billion in 2006, an increase from $8 billion in 2003, yielding an annual growth rate of more than 18%. Cosmetic surgery adds another $15 billion to the mix. The number of spa visits surpasses theme park attendance.1
       Spa locations are growing at 16% annually, comprising 160 million individual visits.1 It seems that for every spa or medical spa that opens, one will close. The competition is fierce. Many who enter the business have little or no experience in the field and even those who open franchised spas are finding the business to be much more difficult than they imagined.

Common Retail Mistakes and Obstacles

According to Retail Management for Spas from The International SPA Association (ISPA), some of the most common mistakes spa owners and directors make include:

  • The spa is like an assembly line with barely enough time to turn the room.
  • There is no person or team specifically charged to drive retail sales.
  • There is little or no follow-up after clients leave the spa.
  • There is little or no product training.
  • There is little or no sales training.

 Obstacles that must be overcome include: