The Art of Merchandising
By Dori Soukup

Is your boutique peaking your guest’s interest and generating a profit? If you answered no, it’s time to assess your boutique’s effectiveness. Calculate your profit per square foot and your volume per guest.

A profitable boutique takes planning, managing and tracking. The following 7-steps will help you create an attractive and a profitable boutique!

1. Inventory Management

• Check your merchandizing mix performance.
• Run reports to identify your product mix performance. This report should be generated by product, by brand and by type to identify your best, medium and low sellers. Then, identify the most and least popular price point to determine how much your guests are willing to spend on products and merchandise.
• Who within your spa is responsible for inventory management and boutique performance? Identify that person and outline their responsibilities.

2. Selecting Your Merchandising Mix

Your merchandising mix should include items other than skincare, hair, and nail products. Your mix should include items to continue the spa experience at home and other fun and unique items that guests don’t find in a typical retail outlet. Product Mix Suggestion: If you use it during the experience, you should sell it –

• Relaxation Lounge
  Many spas offer some type of food and beverage within the relaxation area. Items such as tea, dried fruits, energy bars etc. It’s wise to sell the items you offer. When people like things they try, they will buy them. Use shelf talkers to explain the benefits of each item you offer your guest. Sell the tea they drink, sell the energy bar, and mixed nuts or dried fruits. Try www.whiteliontea.com Order and receive free shipping!
• Pedicure
  When a guest receives a pedicure, instead of placing the flimsy flip flops on their feet, sell them the beautiful flexflop instead. www.flexflop.com
• Rituals
  When you use essential oil as a ritual in the treatment room, sell the oils in the boutique.
• Mood Enhancements
  When you burn candles, sell the candles. www.exoticrecovery.com
• Changing Lounge
  If you have showers in the changing lounge, use the shampoo, conditioner, shower gel, moisturizer that you sell within the facilities. Many spas make the mistake to use inexpensive products in the showers and then sell a different product in the boutique. That is a big disconnect. It might cost you a little more, but in the long run, you will sell a lot more products.
  

3. The Art of Merchandising

• When you display products, attempt to tell a story. Show the professional treatment and the home care that goes with it. Do the same for body products.
• Use props such as bowls, cups, trays, frames, accessories, etc. to ad interest to the shelf.
• Identify products’ natural ingredients & purchase them at local grocery stores, florists, etc. Incorporating these natural ingredients/elements will add unique ambiance and great character to your display area. Items such as leaves, botanicals, apples, pears, oranges, chamomile, lavender, herbs etc. This will add interest to the merchandize.
• Reserve one shelf for your promotion or monthly special.
• Don’t overcrowd shelves. Practice “less is more”.
• Rotating your merchandise is essential. It gives the impression that you have new items even when you don’t.
• Testers are essential to selling products. Most people like to touch, smell, and feel products. Make sure you give them the opportunity. Department stores generate substantial amount of sales with the sampling model; you can too!

4. Point of Purchase Items
Place irresistible items near the check out area so guests can grab and ad to their ticket. POP items need to be $20 or less.

5. Discovery Station
Placing a discovery station in either the relaxation lounge or in you boutique area provides you with opportunity to introduce particular items to your guests. Allow them to discover and learn about a particular product and treatment. Change it biweekly or monthly.

6. Revenue Generation
How much revenue are you generating from your boutique?

Retail Revenue Calculation:
a. By Square Foot

Total Retail Revenue / Total Boutique Square Footage = Retail Revenue per Square Foot

b. By Volume per Guest

Total Retail Revenue / Total Number of Guests to the Spa = Retail Volume per Guest (RVPG)

7. Setting Your Boutique Goals
Decide how much volume you would like to generate form your spa boutique and expand upon the above 6 steps.

Mistakes to Avoid:

• Products behind locked doors
• No spa boutique or limited retail area
• No product display or visuals in treatment rooms
• No pre-packaged items, POP or to-go promotions
• Unorganized, too much clutter or not enough products
• Not managing your inventory properly
  

Should you need additional information or assistance in improving your merchandising within your spa, contact InSPAration Management at info@InSPArationManagement.com

Training and Growth – Yelo NYC
By Dori Soukup

“After only one month, our team achieved the following during the month of January 2009:
• Increased retail sales by 48%
• Increased service upgrades by 45%
• Increased revenue per ticket by 36%
Yes we are in tough economic times but investing in innovation and training paid off!”
-Nick Ronco, President Yelo NYC

I first met Nick Ronco at the Spa Exec event in New York City; he was telling me about his spa, Yelo! I was so intrigued by his unique concept because Yelo is not your typical spa… it’s a napping and reflexology spa in the heart of NYC. The one concern Nick proceeded to tell me was that they are doing well delivering and selling services but the one area they needed improvement was retail sales and merchandising. Sound familiar?

Due to the uniqueness of his place I decided to visit Yelo and see it for myself. I loved what I saw; the sleek and modern look of the cabs, the specialty zero gravity napping beds, the colors… it was very nice!
We continued talking over the phone then Nick decided to hire InSPAration Management to assist him in creating a retail concept and to improve his merchandising appearance in order to increase retail sales.

We created Yelo a recipe concept, redesigned their merchandising and trained the team on how to promote their new retail concept.

Before	After

But we can’t take all the credit. After the team training, the Yelo team really stepped up and performed. They implemented the new strategies they learned and perfected their skills. The team is united and committed to addressing their guests concerns by making recommendations via treatments and retail.

We implemented a new guest intake form that allows the guests to express their concerns. The team uses this information to connect with the guests, first by offering treatment upgrades and then by using the recipe concept to recommend home care experiences for the guests to enjoy between their Yelo visits.

“Success takes positive efforts! Don’t allow all the negativity around you to take the wind out of your sail. When you reach out for help you can tap into hidden opportunities and maximize your success!
Thank you InSPAration Management!” - Nick Ronco
www.yelonnyc.com

Shifting the Retail Philosophy from Selling, to Recommending!
By Dori Soukup

Therapists: You want me to do what??

The number one battle facing your business is the lack of retail sales and upgrade opportunities. As a manager or owner, you know how significant retail sales and upgrades are to your profit line. Unfortunately, your team may not share that same understanding. What can you do to improve revenue generation especially during these difficult economic times?

Hold a team meeting and explain the following to your team:

Fact 1: The Difference between Selling and Recommending.
Selling is convincing someone to buy something whether they need it or not. Recommending is providing a solution to a specific problem or a concern.

Fact 2: Studies Indicate Consumers go to Spas to:
1. Relax and de-stress
2. Look and feel better- looking for results
3. Become educated on how to live the spa lifestyle
4. Learn about new treatments/products

Fact 3: An Average Person Uses 12 Different Products per Day.
Guests use products too. So if everybody buys products, which products should they purchase? Department stores products, drug stores products or professional products found in spas? (Does your team believe their spa products are better than department store products? Do they use their own products?)

Fact 4: Guests are Seeking:
• Result-driven treatments
• Knowledgeable and skilled therapists
• Living the Spa lifestyle by taking the spa experience home
• To receive professional advice

Fact 5: Guests Who Purchase Products from the Spa, Visit the Spa More Often. The product provides a link back to the therapist and the spa.

Fact 6: Our Professional Obligation is to fulfill our Guests’ Needs and Offer a Complete Experience.
Is your team doing that?
What is a complete spa experience? A complete guest experience contains two steps:
1. Perform a result-driven treatment in the spa
2. Educate your guests and offer recommendations on how to maintain a spa lifestyle at home

Shift the philosophy within your spa: It’s not about selling products, it’s about recommending solutions to concerns your guests have. Many therapists tell us they chose a career in the spa industry to HELP people. Are they really helping your guests by letting them go and figure out on their own what products they should use between treatments?

Fact 7: Remind your Team they are Licensed Professionals.
They earned the right and own the responsibility to make professional recommendations to their guests. It’s their professional obligation!

What can you do as a manager?
Discuss all the facts above with your team and help shift the philosophy on how they view retail within your spa. It’s about recommending and not selling! To boost retail sales, you will need to provide your team with a recommending system.

Tell them “Don’t Sell, Recommend!”. Sign-up your team to participate in the Don’t Sell, Recommend! webinar, so your therapist can learn how to recommend home care products and upgrade treatments professionally and ethically. This webinars teaches therapists the P.R.I.D.E. system making it easy for them to recommend.
Spas who have implemented the P.R.I.D.E. system have experienced an increase in:
• Guest satisfaction
• Retention and referral rate
• Self satisfaction and PRIDE
• Financial growth, for both the spa and the team.

If you work on shifting the philosophy on how your team views retail, you will improve your guest experience and increase revenue. For more information on the Don’t Sell, Recommend! webinar visit: www.insparationmanagement.com

Mention this article and receive 10% off.

What type of added value should we expect from our suppliers?
By Carol Leavitt, MBA

One of the most important questions we can ask ourselves about each of our spa suppliers is: Are they a “true partner?” Certainly our vendors provide us with the skin, hair, and nail brands and accessories that keep us treating and selling – that’s to be expected. We assume their products are of sound quality, perhaps hope that their ordering process is simple, and wish for a flexible return policy. We can also take advantage of their brand recognition and the goodwill and reputation that we may enjoy through our use of their products. When these few parameters are in place, we can consider the supplier as professional and reliable. However, vendors should also possess another key attribute – they should be “giving.” It not only demonstrates a generosity of spirit toward those that keep them in business, but strengthens their customer relationships by distinguishing them from other vendors and getting clients “hooked” on the exemplary service and perks. So, as we face challenging economic times and tight margins, what can we expect from them that represents added value?

Educational support is a given. Suppliers naturally want to train therapists about their products – the efficacy of ingredients and treatment protocols for their use. Vendor training should also include techniques for selling their retail products, when applicable. When therapists see “best selling practices” demonstrated, and hear the language that can assuage most arguments against purchasing, they become more confident and capable of increasing their own productivity, while contributing to the success of the spa (and vendor).

Suppliers who are true partners also assist with special promotions and events. They provide the spa with materials and tools for marketing support, which include invitations, brochures, flyers, mailers, comment cards, appointment cards, stationery, spa images, media kits, and more. They assist with merchandising, helping the spa to display products and accessories in the most compelling and effective ways – and also provide tent cards and shelf-talkers to complement those displays. They offer free demo and tester products, as well as mini-sized products for give-aways. What’s best is that they will often sponsor your special event, helping from the beginning with the extensive planning and arrangements. They provide financial assistance, supply food and beverage, contribute to the advertising campaign, and sometimes donate staffing support for the event itself.

Suppliers who are true partners and want to collaborate with your spa for the long-term are offering additional ongoing support in important ways. They provide various types of discounts based on your ordering patterns and needs, to make it as easy as possible for you to maintain their products. They stock and re-stock sampling systems for demonstration purposes in your spa, to boost the potential for retail sales. They link their website to yours and invite you to link to theirs, to amplify web-based traffic and improve positioning in the search engines for both parties. And, they supply current statistical reports and business intelligence that can aide in your business decision-making and planning.

So, as you evaluate the relationships you have with your vendors, you may find that those who truly add extra value to your spa are rare. That’s okay! Deepen your connection with those who are committed to a win-win relationship – those who are not only professional and reliable, but also giving. That’s what a true partnership is all about.

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