Retail is an absolutely vital part of a successful spa operation. In many cases it can be the difference between generating a profit or sustaining a loss.
Today, spa retail revenue on average generates 5-25% of total spa revenue but represents 20-25% of total profit. Therefore, it is clear that by increasing retail revenue there can be a huge effect on overall spa profitability. Every spa operation today needs to evaluate their retail operations to ensure that they are fully maximizing their retail revenue/profitability potential.
SHOP COMMUNICATION is something we see will be the new “buzz” word for spa retail management – just becuase this is something that we can improve at drastically and it is not that hard to do.
Most buying decisions takes place in the actual shop. Therefore exposure and communication in the shop have significant impact on sales.
Shop communication purposes
- Communicating the retail range in an attractive manner
- Provide information on product characteristics
- Help the customer to make purchasing decisions on their own
- Controlling the sale of the goods with the highest profitability and turnover
- Inspiring add on buying
- Communicate the retail brand
Exposure affects profitability. Products given more space and clear exposures will sell more. The products that you want to sell most of should have prominent positions at the entrance, near the checkout and the “main shopping street”.
Eye tracking– There have been numerous studies to show how our eye is tracking the retail item in terms of packaging design, placement, preferences and search behaviours. Studies have then shown that the eye perceives the most exclusive products to be on the top shelf, and budget/low cost products on the bottom shelf. Research has also shown that the most effective retail display is the ones that include a face and those products that are repeated in display and in an actual product sells better, as customers like to purchase products the feel familiar with.
Guest round – The way your customer “walks” the shop; studies shows that 80% of the customer walks clockwise and that they are most interested in the beginning in the “round”. Further that the customer best sees an item from knee height up to just above eye height. This gives you hints on how to strategically place retail products to encourage flow and minimize “cold” spaces.
First impression – Eye tracking has also shown the crucial importance of first impression, capturing the customer’s interest to explore the shop further. The goal is to inspire and simplify the first impression.
The McCann Group study “The truth about beauty” (great study BTW – you can download from http://www.globalspaandwellnesssummit.org/index.php/spa-industry-resource) showed that consumers desired in-store experience should include
- That they can touch & feel the products
- That products are easy to find
- Beautifully displayed
So get going with making your spa shops shine!
Ps. The above is part of our Retail chapter from our on-line spa management course. Ds.