The Conundrum of Skincare Products

Hotels in search of a USP have long turned to spas to provide it. But these days, far from being a unique feature, spas have all but become a commodity in hotels – as I discussed in my piece Commoditisation of Spas. Yet hotels still expect their spa to provide a regular stream of new stuff – products, treatments, services, anything really, just give me something new! The challenge of course is with so many spas out there it’s much harder for one spa to differentiate themselves from other spas. So where does an existing spa turn when they need their own USP? Where? Skincare Products, that’s where!

Trying to build in new features and facilities to an existing spa, is often a complex and costly thing to do. Similarly, to buy some specialist equipment to offer something new on the treatment front can also be an expensive option. And the problem with both these alternatives is that the latest and trendiest and most attention-grabbing feature or equipment today, is unlikely to be the same next year, so it’s a never-ending cycle. Obsolescence is the scourge the spa industry. Alternatively, creating a great new treatment from scratch, for most, will involve hiring an expert spa consultant or dedicating your own resources to developing it in-house. Either way, this can become expensive, both in monetary terms and R&D time.

Fortunately for spas, there is an abundance of skincare companies ready, willing and able to provide you with something new and exciting – and multiple times throughout the year. I have previously written about whether this product innovation is really based on discovery and need or just attention in – Attention Led Innovation in the Spa Industry. Regardless of the motivation, these companies are still bringing you something new. They have already done the R&D, they have a team of trainers ready to come and train your staff on the new protocols and they have even created a range of unique products for you to offer your guests. And it all comes to you for FREE! Yes, free! Just like that free plastic toy you get at McDonalds when you buy a Happy Meal or that free meal you get on a full-service airline. In other words, not free at all! Rather, it comes at no additional cost. The cost, of course, is already built into the price of the products which you must buy to get the new treatment, training and support.

So far it seems like a perfect match. Spas need ongoing innovation to stay fresh in a highly competitive market. Skincare companies have that innovation and are happy to provide it at no additional cost if it sells more product. On the surface, this seems like a WIN-WIN-WIN for the spa, the product house and the hotel. Infact, you could probably throw in another WIN for the consumers too.

However, there are some challenges with this strategy and it’s useful to understand them a little better before you dive into a new product agreement. Here’s a few of the problems that contribute to the overall conundrum of products…

 

Problem 1 – Spas want a USP while the product house wants sales

One problem is that the spas want something different to their competitors. Remember, it’s a USP they’re looking for. And this is where skincare companies and spas arrive at a crossed purpose. The aim of the spas is to sell something their competitors don’t have. Having something new on the menu is great, but if that new item is also available at your three closest competitors, it’s hardly a competitive advantage anymore. Meanwhile, the aim of the skincare company is to sell as much product as they can, which means they want their product in as many outlets as possible, without cannibalising the market. Fair enough too. After all, they’ve incurred all the expenses of R&D, product licensing and registration, marketing, training, support, etc. If they’re not going to charge you directly for that, then it’s only fair to expect them to want to sell as much product as they possibly can.

 

Problem 2 – Distributors carry multiple brands

Another challenging element of the Spa – Product relationship is that the prevailing distribution model for most products requires a distributor to carry more than just one skincare line. They simply can’t generate enough profits to justify all the associated expenses to license, import, store, ship, train, market and support just one product line. This is particularly true for brands that sell into spas, maybe less so for brands that go the mass-market, department store distribution route. Much as they will deny it, the support you get from your distributor is almost always going to be proportional to how much of his product you can move. And that’s not always in terms of total unit volume. If he has another product in his portfolio with a higher margin for him and you don’t carry it, you might find yourself struggling for his attention. The other side of this equation is that most hotel spas prefer to have 2-3 product lines and most likely these will be supplied by different distributors. So now, as the spa, you’re juggling two or more distributors to co-ordinate training time, marketing and promotional initiatives, etc. What seemed a first to be a perfectly symbiotic relationship has now become a bit more complicated.

 

Problem 3 – Some effort and investment required

It’s important to remember that whilst leveraging a skincare company to bring you innovation is certainly more efficient than trying to do it yourself, it’s not quite as simple as Plug and Play. You will still need to have your therapists trained on the product knowledge and treatment protocols. Your receptionist will also need the product knowledge and some retail training on how best to sell the new products, which SKUs sell well together, etc. You might not be paying for the training (at least not directly) but you will need to take your people out of operations to be trained. Depending on your business and staffing levels, that may well mean turning away some paying customers while you do so. You’re also going to need to invest in some inventory, both professional and retail. This obviously means a financial investment. And don’t forget about your remaining stock of the previous product? You still need to find a way to move that product. Now that your team will be focused on the shiny new thing, that will become a harder task too.

Problem 4 – So unique, nobody’s heard of it

Perhaps the greatest conundrum of this product-led drive for uniqueness is that the more unique it is, the harder it is to sell. Remember, when a guest buys your skincare products, you’re asking them to trust the product enough to put on their skin – which of course ultimately means to ingest it into their bodies. To do that with a well-known, internationally reputed brand is relatively easy. There’s some comfort that the big boys wouldn’t risk selling us something that’s dangerous to our health, right? (insert dubious/sarcastic/soulless corporate giants don’t care tone as required). But to ask our guests to take a chance on brand so unique they’ve hardly heard of it, is a much more difficult proposition. Skincare is a product your guests need to try before they buy and before they buy they need to trust it and before they trust it, they much first know a bit about it. Tricky, huh?

 

So, all in all, turning to a skincare company as your defacto innovation partner, can be a great solution. But as we’ve seen, even the most apparently synergistic of relationships are not devoid of conflicts. Therein lies the conundrum.

 

PS: My good buddy, Lisa Star recently wrote a great post about how to get the most from your skincare product supplier/distributor – READ NOW

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