When the Two Blondes were out on the road last week, we ran into a couple of salons that were doing an exceptional job with their retail department, so of course, we wanted to know what was driving the sales. We ended up having a lively discussion. Our retail sector has changed drastically over the last ten years, but that doesn’t mean that we have to succumb to those changes. Instead, let’s look at the changes and find our way around them.
Over the last few weeks we’ve been talking about the increasing challenges facing our industry and how to counteract them. The retail portion of our business continues to frustrate us. It is one of the most important revenue sources in the salon or spa, and yet we continually ignore what is going on right under our noses. So, let’s have a look at this segment from a couple of different perspectives.
1. The Manufacturer
The manufacturer of professional products needs YOU, the salon or spa, and your service providers to make the recommendations to the end consumer. You are the tool that is driving the professional brands popularity. In return for your recommendations, the manufacturer supplies you with education, training and new trends. Sounds like a fair trade, right? And in some ways it is. Unfortunately, so many of our professional brands have been bought up by the giant retailers and they want mass market penetration. They make discount deals with the big chains who undercut and sell over the counter to anyone who wants it. (Keep in mind that if a product is popular it is because YOU have made it so!) Our in-house recommendations are often blocked by the client telling us they will buy it cheaper at _______ or going online!
2. The Product Developers
All the manufacturers begin with someone with a great idea! Think about Irvine Rusk, Horst Rechelbacher, Michael Gordon, Arnie Miller, Paula Kent and Jheri Redding to name just a few of the greats! They have inspired, motivated, and educated us all with their passions. Sometimes, though, the promise of big money from a major manufacturer is just too big to turn down! Our industry keeps their legacy alive, but some of them may be appalled at what has happened to their products.
3. The Distributor
The distributor is also at the mercy of the manufacturer. It costs a great deal of money to have a team of sales reps in the field showing and presenting products to the beauty industry. They decide to represent a new line of professional products, present it to their team, and the team presents it to you. The distributor earns revenues on the products they ship out of their warehouses. The distributor is also responsible for bringing you educations, training, etc. The team works hard to build the new line to consumer awareness and the product line grows. When a manufacturer goes direct with a chain of salons or spas, they bypass the distributor. Those revenues are no longer available to the distributor or their team of sales reps. The education and training brought to you by the distributor starts to dry up. They can’t afford it!
4. The Educator
The educator is one of the most valuable tools the manufacturer has. The “lure” of being an educator is also a sales strategy. If a sales rep can get a new line into a salon or spa by creating an educator position, then bingo! They just got a new account! The Two Blondes have seen and met some amazing educators over the years and this situation has worked out well for all parties. But we have also seen manufacturers make the trainee pay their own way to training classes, often at great expense to the trainee. Sometimes the promise of education is just a foot in the door for a sales person.
5. The Service Provider
As noted, without your recommendations the retail products would still be in the warehouse! The industry average for retail to service revenues is an abysmal 9%. The biggest disconnect is not realizing that the importance of retail to the service provider is not about money, but about retention! The only conclusion to reach is that we are not giving our clients the COMPLETE service they deserve. Sigh!
6. The Business Owner
Only a small percentage of owners recognize the importance of retail. We will assume from the dut on your shelves and the lack of merchandising that you would prefer to ignore the extra work it takes to build this revenue stream. (To those owners who make the time and effort, GOOD ON YA!)
Again, history in a nutshell! (Cliff Notes for the salon industry!) You can see that every segment has its challenges. If you are a salon or spa owner who recognizes that retail is a significant way to increase revenues during an era of decreasing service returns; and if you are a salon or spa owner who is tired of competing with the big chains and the retail giants, here’s our advice:
- Find a line of products that is just starting out, or an existing one that has made a commitment not to go direct.
- Find a manufacturer who will support and educate you.
- Work with sales reps and distributors you trust!
- Find a line of products that is not in every single salon you walk by! Why sell something that your client can buy at every salon they pass. Stop following the leader and create your own niche!
- Check out the possibility of private label. With your own logo on the bottle, your product is not available at any other location.
- Think outside the box and bring in retail items that aren’t hair/skin related.
Retail can be so much fun! Let’s make it a priority in our businesses and generate some excitement with our clients!
Header photo by Igor Ovsyannykov on Unsplash