Hold onto that hand cream. While the start of a new year is often associated with post-holiday markdowns and sales promotions to make room for new merchandise, spa retailers are now coveting their existing inventory and reserving products that are in short supply, thanks to the ongoing shipping crisis.
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Hold onto that hand cream. While the start of a new year is often associated with post-holiday markdowns and sales promotions to make room for new merchandise, spa retailers are now coveting their existing inventory and reserving products that are in short supply, thanks to the ongoing shipping crisis.
Experts reveal that this problem has crept into other areas of business, as well. “Many spa and wellness businesses are experiencing shortages of products for both retail and professional use, as suppliers are unable to receive packaging, components and raw materials,” says spa consultant Lisa Starr of Wynne Business. “The disruption begins at sea with shipping, but even once goods are offloaded, the delays mount with the challenges in rail and trucking logistics as well.”
Because these delays are expected to persist well into this year, spas must have a plan in place to minimize the impact on operations. Navigating these challenges together means taking a closer look at the effects of the shipping crisis and finding possible strategies for working through such limitations.
Fallout Frenzy
Maintaining ample quantities of merchandise continues to negatively impact spas, both at the retail and vendor levels. Bruce Schoenberg, owner of Oasis Day Spas in New York, relies upon a variety of skin care lines manufactured overseas and has been forced to rethink the total consumption of goods at his brick-and-mortar and pop-up shops. “Short term, we have had to reconfigure how much product can be used in certain services,” he says. “Conservation was always a priority, but it’s even more important now.” Longer term, Schoenberg plans to reevaluate which lines may be substituted with ones that are more easily attainable.
Kim Collier is feeling the effects of the shipping crisis on two different fronts, as the proprietor of JAMUspa in Whitefish, Montana, and the manufacturer of JAMU Asian Spa Rituals, comprised of body oils, scrubs, face masks and bath salts. “It has been challenging to keep supplies in stock, but we have managed,” she says of her product line. “The key was ordering twice the quantities early in 2020, which has carried us through.” Although JAMUspa has not been terribly impacted at the retail store level, Collier knows other spa operators who have been dealing with the repercussions. “‘Your backorder is backordered’ seems to be a common reply from vendors,” she notes.
Even when spas can restock their supplies, they must contend with rising costs in shipping, raw materials and packaging. Absorbing these fees is not always feasible and often requires businesses to pass them on to the consumer, increasing product and treatment prices at the register. This conundrum may put business owners in an awkward predicament, but experts believe that the majority of spa-goers have come to expect this rate hike. “Guests who have any awareness of the news are not surprised to see prices adjusting northward,” says Starr. “They’re more understanding, at least for the moment.”
At Oasis Day Spas, Schoenberg makes a point of explaining the reason behind these increases to their customers. “Our clientele is sophisticated enough to understand,” he says. “It is critical to educate guests about any price increase as soon as possible on your website, in an email blast, on social media and when they are scheduling their appointment.” Being completely transparent about hidden costs up front ensures a stronger client/business relationship in the long run.
Plan of Action
In the meantime, maintaining a spa’s existing inventory requires a savvy eye for knowing how to parcel out product effectively. Schoenberg believes in taking a closer look at past sell-throughs to determine how long those items will last, and then focusing on the needs of core guests. “New clients should be steered toward alternative options, and you can hold the SKUs you’re most concerned about for those regulars who reliably purchase,” he explains.
Focusing on deeper inventory of fewer SKUs is an approach that works not only for retailers, but for suppliers. “I recently moderated a panel on supply chain challenges for industry vendors and manufacturers at a We Work Well event, and they all shared that this is a strategy they are looking at going forward,” says Starr. “Consolidation of their offerings will enable them to more consistently project availability and deliver products in a timely fashion.”
At the spa retail level, Starr stresses the importance of turning to tried-and-true sellers when gauging product usage. “Now is the time to utilize your retail reports to determine top sellers—and fill your retail shelves with the highest movers that you can reliably procure,” she advises. “Don’t worry about restocking the SKUs that are among your bottom 20% of movers.”
Another smart strategy is the implementation of drop shipping, which enables spas to place orders on behalf of consumers and handle shipments in house. A concept that grew out of necessity during the pandemic, this type of business transaction also allows spas to earn a commission. “The results are not as immediate, but it can be done fairly quickly. Once spa-goers get used to the system, it can be quite easy for them,” explains Starr. However, she cautions, this is not meant to replace in-person sales, particularly for first-time clients; it should be used to supplement income in the short term.
Collier also sees value in drop shipping and offers it to her own spa clients. “This way, the spa doesn’t have to invest in large retail inventory; they only need a tester bar and professional product to match it,” she explains.
Closer to Home
With so much dependence on overseas shipment prohibiting spas from receiving products, they may benefit from enhancing their inventory with homegrown brands. Collier predicts that many will take this direction in the months ahead, and vendors will also be exploring sales closer to their locations.
Starr agrees that looking for locally sourced partners will be advantageous for spas. “Whether sundry items for retail or locally crafted ingredients and concoctions that can be used in treatments, a local supplier can be a good option and positions the spa as a positive force in the community,” she says.
As the shipping crisis continues to play out, spas will need to remain flexible and open themselves up to new ways of managing their retail operations. Although it’s admittedly easier said than done, experienced purveyors like Schoenberg can attest to the fact that rolling with the punches is something that’s just part of being—and staying—in business. “We have had popular lines suddenly go out of business, change their formulas and decide to start selling in Walmart,” he says. “I recommend establishing as many relationships as possible, with as wide a variety of lines as possible, so you have options when you need them.”
Indeed, an ongoing willingness to pivot may just be the the new normal for the spa and wellness industry.
Pamela Brill is a writer based in Northport, New York.
