Home' Spa and Clinic : SPA Vol-70 Winter 2017 Contents Long before the GFC and its devastating
fallout there was The Great Depression,
whose sur vivors would argue was much
worse in its impact on people's quality of life
in the Western world.
Elderly relatives would tell me stories of
that time; for instance of several families
living in the same small house and existing on
oranges picked from the garden for a week.
Another tale that stuck in my mind was of a
man being knocked down by a car and people
rushing to him, not to offer aid but to ask if he
had a job (ergo, so they could apply for it).
Such was the poverty and desperation of
the Great Depression, that in most countries
that started in 1929 with the stock market
crash in the US on October 29, 1929 (known
as Black Tuesday) and lasted until 1941.
The so-called Lipstick Effect was
identified by financial pundits during the
Great Depression. It's the theory that when
facing an economic crisis consumers will be
more willing to buy less costly luxury goods.
Instead of buying expensive clothes, for
example, people will buy expensive lipstick
(or lipstick, anyway).
Rather than lose the spending habit,
consumers simply trade down to cheaper
items to cheer themselves up.
What's more, this effect has held good in
recessions of the past and in countries with
different cultural traditions.
Economic analyst Dhaval Joshi, from
British-based R AB Capital, reported in 2008
when the GFC first took its grip on the globe,
that sales figures from the world's big cosmetic
companies - L'Oréal, Beiersdorf and Shiseido
- confirmed that the Lipstick Effect returned
almost immediately as the world economy
headed into its first synchronised downturn
since the early 1980s, with consumers
increasing their spending on cosmetics even
while economising on everything else.
So here's the point we are really getting
to -- you are offering wellness and feelgood
ser vices but why are you not generating
more wellness and feelgood product income
We're not just talking lipstick here(!),
or even the skincare, makeup and other
products you use in your treatments for
use at home, but little luxuries that make
clients feel like they're giving themselves an
indulgent treat, without the guilt factor of
overreaching their budget.
Think of a range of merchandise
appropriate to your customer base -- for
instance, scented candles, soaps or bath salts,
nifty little gift packs (great for sampling and
range and convenient for travel), aroma oils
and burners or diffusers, inner beauty tonics
and supplements, "athleisure" wear, cookbooks
for healthy eating ... where do we stop?
A clinic owner once told us that she got
over- excited at a beauty expo and bought
a couple of dozen scented candles because
their scent was so sublime and the wholesale
price too compelling to resist. But in the
unscented light of day she wondered 'What
the hell am I going to do with these?!'.
She decided decided she would starting
burning them at the front desk to create
ambience. Next thing the receptionist was
being besieged by customers paying for
treatments wanting to buy the same candle.
The expo stash sold out within a few days
and now the owner stocks the candles as a
regular retail offering that's become a nice
little earner. Plus the clinic smells divine!
Retailing should account for roughly
half your total income but the average
percentage it makes for salons, spas and
clinics in Australia is as little as 4-6 percent.
If this is what is happening in your
business you are selling yourself -- and your
customers -- short.
After all, if clients are not buying their
home care products from you, they're
getting them somewhere else. Why are you
letting likely sales walk out the door?
Just as importantly, it means you're not
giving them the benefit of your expertise
in recommending the products that will do
the best by their skin. It's a bit like a doctor
diagnosing a patient and sending them
off to buy whatever medication they think
could work at a chemist or online.
"Despite that fact that a strong retail
business makes a salon or spa more profitable
and more predictable, we still see most of them
ignoring this opportunity," says Matt Williams,
managing director at Professional Beauty
Solutions, distributor of Image skincare,
Youngblood mineral makeup and Dermalux
Tri-Wave LED, among other brands.
THE LIPSTICK EFFECT
When times are tight financially for your clients there are little things they
won't do without -- all the more reason to up your retailing ante
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