Most Popular in:

Skin Care

Email This Item! Print This Item!

The Spa Market as a Distribution Channel

By: Ada Polla
Posted: April 28, 2014, from the May 2014 issue of GCI Magazine.
  • In the spa channel, dedicated skin care professionals and estheticians help brands to create great products and also promote said products to their clients through treatments and recommendations.
  • Training is a significant factor in retailing through the spa channel, as products are often created in conjunction with specific treatment protocols.
  • Spa exclusivity is a decision that skin care brands distributing in spa channels will have to make, with opportunities on both sides.

If, when you were young, you dreamed of becoming a skin care entrepreneur, it is likely that you dreamed of a launch at Barney’s, with an expansion of your distribution at Saks or Neiman Marcus. More recently, perhaps you dreamed of an exclusive launch on QVC or HSN, with a retail expansion to Sephora.

It is less likely that you dreamed of creating a line exclusively for the professional skin care channel, perhaps because, on the face of it, the salon and spa channel lacks glamour. This channel, however, offers significant advantages for beauty and skin care brands, including providing consumers with experiential introductions to products, a healthy bottom line when comparing benefits versus costs, and the ability to transform estheticians into brand ambassadors.

The Spa Industry

Recent research data from the International Spa Association (ISPA) suggests this channel continues to be robust and growing. In 2012, just under 20,000 spas in the U.S. generated upwards of $14 billion in revenues through 167 million visits. Anyway you look at it, the impact and consumer reach of the spa industry cannot be denied.

But what are the success factors when looking at the spa channel for distribution? Advantages and disadvantages? And what can we learn from those who have been successful in this beauty channel?

Pros

There are several points in the pro column for distributing a skin care brand via the spa channel, and while this article isn’t exhaustive, it does highlight some of the top pluses for this distribution model.

First, this channel is very relationship-oriented, which encourages loyalty and longevity. There are few spas that look at quarterly sales numbers to inform their decisions regarding skin care lines. While some may describe this as a key challenge for the spa industry, I see the longer-term view that spas take comforting.

Another pro is that estheticians become powerful product brand ambassadors and, indeed, a brand’s sales force.

Spa treatments additionally offer consumers an experiential introduction to new skin care lines. Discovering a new product line in the intimacy of a spa treatment room, in the hands of a qualified skin care professional, is both more powerful and more controlled than discovering a new line through samples or a department store counter demonstration. It offers the chance for questions and the interaction of actually experiencing the products at the same time.

And while training costs are significant in this channel, which I will discuss more further on, the spa channel does not require paying for someone to work at a counter or to provide in-store support. Furthermore, gifts-with-purchase, seasonal gift sets and promotional items, while important, can also be less frequent in the spa channel than in traditional retail.

Cons

Like any channel, there also are some drawbacks to distribution via the spa channel. It remains a highly fragmented industry (excluding spas at chains such as Massage Envy and Lifetime Fitness), and this means it takes a significant amount of time and effort to penetrate it.

Another drawback, turnover in the spa industry is high, which lend to high training needs and costs. Furthermore, the training involved goes beyond product knowledge, and typically includes hands-on sessions to ensure estheticians understand a brand’s specific treatment protocols. And, of course, the flip side of the coin of “estheticians as brand ambassadors” is estheticians must be wooed and convinced to try new lines, much as retail consumers must be in store aisles. Without estheticians’ approval and support, no matter the input of the spa owner or manager, a line will be hard-pressed to truly be successful in a spa setting.

Spa Focused

One key to success in the professional skin care and spa market is the ability to offer estheticians products they exclusively use in their treatment rooms to drive results and treatment revenues. These products are known as backbar or professional-only products, and they are typically stronger and more prescriptive than anything that a consumer can use at home, and often available in larger sizes.