READY to RETAIL

Having a retail offering in your salon business can increase revenue, boost client loyalty and help you to become more resilient in challenging economic times

In an increasingly competitive market, it’s more important than ever for salons to have a number of different sources of revenue, including a good retail offering.

“The most profitable salons operating today seek to develop multiple streams so that they can optimise the amount of revenue they can earn from each client, and build a more resilient business,” says Lisa Kelly, owner of Salon Solutions, which specialises in branding and marketing for salon businesses. “It is generally suggested that retail product sales should represent 20% of your overall turnover, but this can be up to as much as 70%, so you can’t afford to ignore retail opportunities.”

“Having a retail offering is crucial for a salon as it’s another revenue stream that contributes towards its financial stability and profitability, without being too time-consuming,” says salon and spa business consultant Eileen Fleming, who also owns The Buff Day Spa in Dublin.

“Furthermore, using retail products enables clients to extend the benefits of the treatments they receive in the salon to the comfort of their own homes. This continuity in their skincare routines not only enhances the client's experience, but also ensures long-lasting results, which can strengthen client loyalty and satisfaction. Therefore, retail not only contributes to the salon's bottom line, it also promotes an ongoing relationship with clients, helping to build trust and encourage repeat business.”

“At a certain point your column will be full; you will not be able to fit any more clients in as you have reached your full capacity in terms of treatments and services,” says salon business expert Liz McKeon. “Providing you have the stock, retails sales can generate a limitless source of income for your salon. There is no end to the number of retail products your clients can purchase, and recommending their correct homecare regime helps to position you as an expert in their mind, giving you a advantage over your competition.”

Appealing display

Creating an appealing retail space is essential for attracting and engaging clients, and selling your products. “Before setting up your retail area, do your research,” advises McKeon. “Learn about the importance of effective merchandising and display, and find out about correct stock levels and stock management. To have the right items for sale, work with your supplier and get their advice.”

“The space needs to be clean and tidy, and be free of dust and clutter,” says Fleming. “Simplify the display by avoiding excessive posters and signs, focusing on the products themselves instead. Place bestsellers and new arrivals at eye level to catch clients' attention immediately. Group products by category or use, making it easy for clients to find what they're looking for. It is best to have a maximum of three units per product so that your shelves don’t look too crowded. Introduce seasonal themes or special promotions to keep the retail space fresh and engaging. This attracts attention, and encourages clients to return to see what's new.”

“The visual impact product placement can have, and the buying impulse it can generate, cannot be understated and is crucial to maximising your in-salon retail sales,” stresses Kelly. “Invest in high-quality shelving, and ensure that it fits your image and style. Remember, the investment required to ramp up your retail sales is very modest in comparison to the return. Locate the retail space in client waiting areas, preferably to the right of the entrance. You should change the shelf presentation regularly to maintain interest, and highlight a specific product on a rotating basis. Ensure the display, where possible, reflects the season.”

Online offering

While it’s important to have a retail offering in the salon, don’t forget the value of selling online also. “Many salon owners take the view that they can make all their retail sales during client visits, but unfortunately those who do are missing out on the most profitable and incremental income they can earn,” warns Kelly. “Having an online shop will enable you to leverage the investment you have already made in stock. And it can provide a 24/7 virtual display when you do not have sufficient space or the budget for proper merchandising in the salon. It requires a very modest investment to set up an online shop, particularly if you use a purpose-built e-commerce platform. In most cases, your investment will provide a payback and positive cash return within a few months.”

“Since the pandemic, there has been a huge shift in client spending, as during the various lockdowns they had no choice but to purchase their retail products online,” says Fleming. “This digital shift has seen the role of retail become more critical than ever to businesses. It's important that salons continue to adapt to the changing landscape by boosting their online presence, offering a convenient shopping experience for clients.”

Team players

Your salon team plays a major part in your retail sales strategy, so it’s crucial that everyone is both confident and comfortable in this role. “Each team member is in a unique position to leverage an existing client bond or create a new one and generate incremental value for your clients and your business,” says Kelly. “In the end, people buy products from the people they like. But selling is not for everyone, and it can make some staff uncomfortable, especially if they believe it's not part of their job.

“The trick is to enable the entire team to make professional and tactful recommendations in a non-aggressive way, which does not impact negatively the client's experience during an appointment. To do this, all staff should have a deep understanding of the salon's products and their ingredients, how to use them, and which ones complement one another. During a treatment, the client should be told what products are being used and why. When a recommendation is being made, it should be clear to the client why using this product at home will enhance their treatment.”

‘There is a client expectation that your business offers a fully comprehensive set of services and offerings, including aftercare and product support’

“Emphasise to your staff that recommending products is about educating clients, and providing them with solutions,” suggests Fleming. “Encourage them to use the products themselves so they can personally vouch for their effectiveness – this will add credibility to their recommendations. Encourage them also to share success stories from other clients who've benefited from using the recommended products, as sharing real-life experiences can be both compelling and relatable. Have training sessions where the team can practise recommending products through role-playing exercises. This helps build confidence and refine their approach.

Missed opportunity

So what is the advice for those salons that don’t yet have a retail offering?

“Calculate how much extra income your business would have generated if every client who came to the salon last week purchased one item,” says McKeon. “By checking the numbers, you will see how much money you are missing out on making.”

“If you are performing treatments with a brand that doesn't have an at-home product for the client to purchase, you are losing an opportunity to help your client achieve incredible results and for your business to make revenue,” notes Fleming. “And if that is a brand that you do not truly believe in, start researching and find a brand that you do believe in, and that does have retail options, and stock it. Clients are buying products anyway, so why would they not buy them from you? It’s a win-win for everyone involved.”

“There is a client expectation that your business offers a fully comprehensive set of services and offerings, including aftercare and product support,” says Kelly. “If no attention is given to this part of your business, then clients will buy directly from the brand website itself, or even move to another salon. Without a retail offering, you will never grow to your full potential. Given that the margins you can earn on retail sales far exceed those you can earn from delivering services, retail sales can be the difference between a salon just surviving or thriving.”