Now Department Stores Beauty Brands Want a Piece of the Action
Since this past July, when he came on board as Clarins USA’s first-ever National Director of Sales in its Hotel & Spa Division, Barry McCaffrey has barely spent a single night in his Manhattan apartment. Hitting the ground running, he’s been racking up serious frequent-flyer miles on behalf of his new job. His last two-week jaunt, for instance, kicked off with a visit to the storied Miraval Arizona and a good scouring of the Tucson spa scene, followed by a trek to Global Beauty Exchange, a spa trade event at the St. Regis Monarch Beach in Dana Point — the site of AIG’s infamous 2008 post-bailout retreat.
The St. Regis meet-and-greet was the second such powwow McCaffrey has attended recently; he characterized the other big meeting, SpaTec, held at the Langham in Pasadena, as “speed-dating for spa professionals.” Not that he’s complaining about either the traveling or the trade shows, because he’s certainly not. “Those meetings have been great,” he says. “Within a short period of time I’ve gotten really good exposure to top decision-makers.”
With a mandate to lift Clarins’ profile in the $12 billion U.S. spa industry skyward (he won’t say how high), McCaffrey, who has a lengthy track record in the spa-product business with stints at Comfort Zone and Repêchage, said his new role is made easier by both the size of the French beauty behemoth (Clarins SA had an estimated revenue of $1.31 billion in 2009), and its well-deserved reputation for high-quality products. “Everybody I talk to,” he says, “has great respect and admiration for the brand.”
The issue, McCaffrey says, is dealing with the economic fallout of the last few years. “The ‘AIG effect’ sent the resort and hotel business into a tailspin,” he says, referring to the pullback on corporate meetings in luxury locales. “Everyone’s business was down 20 or 30 percent.
Groups weren’t booking, occupancy tanked, and as a result, even if there was a great meeting coming into a hotel, you can be damn sure they weren’t booking facials in the spa. Particularly if they were a large company, because they didn’t want any negative press after what happened at the St. Regis. But it was also at that time that I started having much more contact with general managers of hotels. The GMs were really sitting up and taking notice of every aspect of their properties and saying, ‘Okay, how can we build revenue into everything we’re doing?’”
Enter a major player like Clarins, which has the might, heft and infrastructure to support its spa partners in way that a smaller, mom-and-pop type brand might not. Clearly, in carving out this job for McCaffrey, Clarins is seizing this moment.
Which isn’t to say that in the future, spa retail areas and “back bar” business (which refers to the liquids used on-site in the actual treatments) will be completely dominated by brands like Clarins, which already have massive footprints in department and specialty stores. In the 47 spas attached to the Equinox fitness clubs, for example, guests will find far cultier fare in the form of Skin Ceuticals, Lather and, in a handful of units, Phytomer. According to Nicole Vitale, Senior Director of Spa for Equinox, those three brands hew to her core philosophy about spa skin care: that it not only be effective, but also so simple and easy to wrap your mind around that you’re dying to use it at home, post-treatment, too. In other words, forget the 15-step regimen with the multi-syllabic, rocket-science-y ingredients.
“If it’s easy, you’re going to use it when you leave the spa,” says Vitale. “If it’s too complex, you’re going to buy it, look at it, hate me for making you buy it and never use it. And I’m never going to see you again.”
In her role as President of SpaFinder, industry expert Susie Ellis has looked at the retail piece of this puzzle from every angle. Comparing revenue between services and retail, she says the conventional wisdom is that an 80/20 ratio is healthy. “The industry average hovers between 8 and 12 percent, depending who you ask,” she says. “SpaBooker, which is the cloud-based application that powers 1,600 spa management systems, reports that the average is around 9 percent for day spas.”
Still, there are companies that capture a much bigger slice of this pie. Steiner Leisure Limited, for instance, which owns the spa brands Elemis, Mandara, Bliss and Remede, routinely achieves 40 percent of its revenue in retail sales. As Ellis is quick to point out, however, a big chunk of Steiner’s business is done on the 150 cruise ships on which it operates spas. “It’s a captive audience and the spas are almost fully booked,” she says. “And while a model of 40 percent retail is impressive, there’s often a backlash that comes with it because the techniques and energy spent in the sales effort are, usually, pretty strong. Not every person is happy about spending $100-plus for a facial in which 15 minutes are spent on a sales pitch.”
Given the lackluster economy, it’s hardly surprising that spa aestheticians are under the gun to sell, sell, sell. But presented the right way, it’s actually a golden moment to purvey yummy, aromatic serums and elixirs that let you tap right back into the memory of your relaxing spa visit. “All the studies concur that the number one reason people go to a spa is to de-stress,” says Ellis. “And in a recession, there’s plenty of stress to go around. In some ways, our industry actually benefits as stress increases.”
A beauty journalist for over 20 years, Dana Wood has served as Beauty Director for both W and Cookie magazines and has written for numerous national publications including Glamour, InStyle, Harper’s Bazaar and Self. She also spent several years in the Luxury Products division of L’Oreal as Assistant Vice President, Strategic Development. Her first book, Momover: The New Mom’s Guide to Getting It Back Together, was published in 2010 by Adams Media.