3 tips for optimizing your retail revenue

Retail is often a challenge in spas, but you can make it a significant part of your revenue. Start optimizing your retail strategy with these three tips from TW Squared.


By Tawnya Wych and Tracie Weeden, Co-Founders & Owners of TW Squared Retail Services.




Retail can be a challenge in spas. This doesn’t have to be the case. The spa industry is rich with product and skincare experts who are well equipped to guide guests in making the right purchases for their individual needs. It’s just that sometimes retail takes a back seat to everything else happening in a spa at any given moment. A retail management system and the right support and training can help.

Retail is an integral part of hospitality, spa, and wellness business that can help create an exceptional customer experience. Your retail revenue should be at least 10% of total spa revenue, and with a variety of brands and categories, online retail, secondary or pop-up shops, and events throughout the year, you can even achieve 20% retail revenue, or even more (depending on the size of your retail space)!

That might seem high, but it is absolutely doable.

If you want to increase your spa’s retail revenue, start optimizing your retail strategy with these three tips:

Implement a retail management system

You’re busy. A retail management system can help. These systems are designed to support the running of retail operations, and can handle such tasks as ecommerce activity, flow of inventory, customer relationships, and more.

It’s important to gain a true understanding of your system in order to get the most out of it.

Before choosing a system, determine your needs today and any future needs your business may have, then explore various options to understand the functionality they offer. The size of your business and number of items and categories you sell will determine if an all-in-one system for services and retail is sufficient. Large retail operations may want a more robust back-office inventory system that enables you to track color and size easily and offers more reporting options for buyers and executives. Identify the decision maker and leaders from each department that will use the system and have one point person assemble information from others and coordinate with the system team.

You’ll have to gather your data, so be obsessive about providing the most complete and accurate data you can. Include only active items, as bringing in every item leads to confusion. It’s much easier to add items than to remove them from a system. Do not take shortcuts on data and expect to fix it later, as that rarely happens.

If you spend time upfront, you set yourself up for success.  Virtual training before go-live is important to ensure everyone understands the system and their role. Refresher training and continued support after the install ensure success.

Stay on top of your inventory

Staying on top of your inventory means you’ll never run out of a popular item or overstock one that isn’t selling. It will help drive your sales and allow you to make better business decisions for the future.

Use a retail inventory system to create and generate daily, weekly, and monthly sales reports.  It’s important to check discounts, margin, top sellers, and sell through. Someone should be dedicated to restocking the sales floor daily, to avoid missed sales opportunities.

Identify vendors, categories and items that are best sellers and generate the most revenue. Provide the team with purchase order reports, so they are aware of incoming product and prepared to receive it immediately upon delivery. Review inventory reports, check for items with low on-hand numbers and generate reorders to meet the demands of your sales and maintain optimum stock levels.

Maintain your system to ensure inventory is accurate. Perform regular physical inventories and address any shrink issues such as internal theft, external theft, and data integrity issues. Analyze your sales by shop, vendor, classifications, product age, turn, and cost of goods sold.

A thoughtful and thorough analysis of sales and inventory will take your business to the next level. You should never be out of stock of best sellers when you have a sophisticated system and know how to use it. Maintain actionable and clean data. You must know what you sold, when you sold it, and at what cost, to make better buying decisions for the future.

Get the whole team on board

It’s imperative to teach your team to fully utilize your retail system and make sure they have the time to be on the sales floor and spend time with customers. Hire people who are passionate about retail and turn them into evangelists for your products. Successful retail teams build strong relationships with their vendors. They have product information and can tell the story of the product to customers. Include everyone in vendor training from front desk staff to therapists. The more they know, the better they can sell, and you want your staff to be passionate about the products they sell.

When something isn’t selling, ask vendors to swap it out rather than taking deep markdowns.  Schedule trunk shows and events with current vendors to increase sales and test potential vendors without investing in new inventory. Your retail shop is a work in progress and should evolve with new people and new products.

Listen to you customers and staff about what’s missing from your assortment and look for those items. Your customers know what they want! Exploring new brands and developing custom products will take your retail to the next level.

Pay constant attention to your retail and you will be rewarded with increased revenue.

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