December 2011

Steve Sleeper

Beauty Insider| by Steve Sleeper

 

Don't Let Profits Walk Out the Door

by Guest Writer Max Wexler,PBA Chair | President Beauty Craft

Have you honestly looked at your retail assortment lately?

Is that pretty display case in your salon making the profits it should be? Do you know how to train your employees to properly promote and sell products that your clientele already wants to buy?

These are tough questions, but if they can help boost your revenue by $10,000 to $50,000, shouldn't you take notice? As a long-time distributor who deals with selling day-in and day-out, I am often amazed by the salons that continue to let profits walk out the door.

To help debunk the myths many salons, spas, and licensed professionals have about selling, the Professional Beauty Association (PBA) has an amazing resource to help. The Business of Beauty: Maximize Your Profitability - Defining the Future of Beauty Retailing report is a strategic blueprint to help take your retail efforts to the next level.

The overall retail beauty category in the U.S. is expected to grow to $56 billion in 2012. However, the salon industry only has about seven percent of the current market.

Furthermore, the Business of Beauty report found consumers want their complete beauty needs met, and their number one trusted source of information on hair products in particular is their stylist. Consumers would actually like to hear more from their stylist in recommending the products they need during their appointment.

With that knowledge, if the average salon with $1 million in overall revenue increased retail sales from seven percent to ten percent, that would translate into an additional $30,000 in revenue and $15,000 in incremental profits. Even more impressive, with consistent application of the best practices found in the report, retail can often exceed 20 percent of a salon's overall business.

The threat: Beauty retailers such as drugstores and mass merchandisers understand the growing beauty market and they are very aggressively trying to capture those sales. From remodeling stores to training associates on how to identify consumers' needs, the competition is fierce.

Nonetheless, consumers still trust the relationship and knowledge of the professionals in their salon and spa. As a distributor myself, I know first-hand that we can also deliver the service and products that will actually help our clients better than anyone else. However, if we are not offering clients the beauty products they want and doing it an appealing manner, they will continue to go elsewhere. Unfortunately, 71 percent of salon clients in 2009 were not offered a retail recommendation while in the salon. Why let that mass retailer down the street get those beauty dollars when all you and your team need to do is suggest a hairspray, shampoo, or beauty tool?

What you can do: The Business of Beauty strategic blueprint provides an eight-step process to retail success, along with real-life examples of salons that have mastered the retail and customer experience. Rest assured, the process does not involve a multi-manual book that will only collect dust, but rather an easy-to-follow guide with easy-to-implement strategies to get you started quickly.

As an example, step five focuses on offering strategic selections. Salons should carefully select the products that go in to the salon to be consistent with the brand and the target customer: Making sure to offer clear trade-ups and limit the inventory so employees can be well educated on key benefits. It is important not to overwhelm the stylist or the customer.

Aligning incentives, (step seven) is also critical so that every employee is working toward a common goal. Integrate retail and services along with setting realistic, yet challenging goals.

Having been in the beauty distribution business for many years, I try to help my clients with all of these steps. Salons that proactively work to make their retail component an integrated part of the business, rather than an afterthought, truly do better in the end. Not only are revenues generally much higher, but clients are more satisfied.

The beauty industry continues to evolve. Those that take the time to stay current, both on the latest trends in hair and spa techniques along with the latest trends in retail, will be the ones that outpace the competition and not only survive, but thrive.

Max Wexler is the Chair of the Professional Beauty Association (PBA). A forty-year veteran of the professional beauty industry, Wexler is actively engaged in sales, marketing, government affairs and strategic planning for PBA and the industry as a whole. The Professional Beauty Association | National Cosmetology Association (PBA | NCA), is a non-profit membership organization made up of beauty professionals, salons and spas, distributors, and manufacturers dedicated to improving their careers, individual businesses and the industry as a whole. For information, visit www.probeauty.org or call 1-800-468-2274.