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The Spa Market as a Distribution Channel
By: Ada Polla
Posted: April 28, 2014, from the May 2014 issue of GCI Magazine.
page 2 of 2These products also enable the development of unique treatment protocols, which is another key to success in this channel. Elemis—a popular British spa and skin care brand available in more than 1,200 spas worldwide, according to its website—focuses on developing products first and foremost for spa treatment protocols, such as facials and body treatments. This enables the brand to garner feedback from skin care professionals before finalizing formulations, and it helps ensure optimal results in the treatment room—even in retail products.
Indeed, Kalologie Spa co-founder and president Tracy Brennan comments, “The Kalologie line was created specifically for the spa channel, using years of hands-on experience in our treatment rooms to create a line that is truly results driven. Focusing on spa distribution allows manufacturers to create a true brand experience by combining professional treatments and retail.”
Also, most spa-focused skin care brands distribute to the spa channel directly. This may be because spa product distributors are few and far between. These spa distributor companies, however, can distribute everything from equipment and furniture to cotton balls to skin care product brands (leading spa industry distributors include Universal Companies, SpaEqui, SalonCentric, JaCo Distributors and Ageless Esthetics). It is important to know that a distribution partnership is like a marriage: it is a long-term relationship that should be entered into after careful consideration and nurtured every day.
Another unique spa channel element, as mentioned previously, is that training is absolutely key. For example, spa-focused brand Dermalogica is sometimes referred to “an education company with great products” instead of being “a product company with great education.” Indeed, Dermalogica’s school model is powerful and highly successful. Dermalogica offers esthetics students the possibility to take classes at its 32 International Dermal Institute (IDI) locations, and the company uses this network of schools to teach skin care and treatment techniques and protocols as well as spread the Dermalogica product gospel—turning every student into a passionate, well-trained brand ambassador.
Exclusivity plays a role in this channel too, as it does in some other retail channels. Exclusivity can be interpreted in two ways. Exclusivity within the professional spa and skin care channel (i.e., distribute in my spa and not the competing spa around the corner) versus exclusivity as compared to competing channels (i.e., distribute in the spa channel only and never in the retail or online channel). While there is no right or wrong answer here, a number of brands have also been able to develop their distribution across a number of channels, simultaneously, without alienating their spa partners.
One powerful example of multi-channel distribution is Murad. At about $100 million in revenues, Murad’s distribution is divided as follows:
- 95% in the U.S., 5% international
- Of the 95% U.S. distribution: 40% direct channels (catalog, TV, website); 30% spas and boutiques; and 30% national and retail chains
This data, sourced from WWD, also predates the brand’s launch in Massage Envy Spas, so the percentage represented by spas may have since increased. And indeed, Murad’s partnership with Massage Envy has only strengthened the brand’s overall reach and reputation.
CG Funk, vice president of industry relations for Massage Envy, perhaps sums the key success factors for the professional spa and skin care market most effectively by saying, “When Massage Envy Spa was in the design stage of our skin care services model, we took several months to research various skin care companies and assess not only their products but also other factors of their business. We were looking for a nationally recognized brand that consumers could easily identify with. We wanted to partner with a skin care product company that would offer us an agreed upon exclusive partnership. We assessed the products of each company to ensure they were therapeutically based; in other words, that the products were designed to provide users with healing results both physically and emotionally. And, we rated each company on their national team’s ability to provide each of our locations with support, sales and training on an ongoing and scheduled basis.”
A Channel Built for Skin
So, what do you need to make it in the spa channel? Brand awareness, exclusivity, quality and results-oriented products, ongoing marketing support and training. And really, it can be just as simple as that.
Ada Polla is the co-creator of the Swiss antioxidant skin care line Alchimie Forever, which launched in the U.S. in 2004. Her strategic focus and implementation have yielded double-digit annual revenue growth for the company. She holds an MBA from Georgetown University, majored in art history and political science at Harvard University and graduated magna cum laude with a Bachelor of Arts degree in 1999. She is also a GCI magazine editorial advisor.