It's a well-known fact that hair and beauty salons are notoriously bad when it comes to selling retail products. So, idResults decided to investigate to work out why and provide solutions.

'Would you like fries with that?'

For a salon, this could be a conditioner or a cosmeceutical treatment cream; products that help maintain or continue to improve skin/hair condition between salon visits.

According to research published by Mordor Intelligence Pty Ltd in November 2016 - the Australian cosmetics market was worth $ 4.98 billion in 2015 and is projected to grow to $ 7.76 billion by the end of 2020. Now, that is a lot of products that promote the maintenance or improvement of hair/skin condition. So, if consumers are not buying these products from a salon, they must be shopping elsewhere – the answer is from supermarkets, department stores, from pharmacy and on-line.

So, before we consider how to change this , we first need to determine if selling retail products will make a positive contribution to the financial position of a salon. If so, would it be significant enough to make it worthwhile. Well, you don’t need to be a rocket scientist to answer this question – with projected sales of $7.76 billion by 2020, the answer has to be yes!

Here are some of the other benefits, and there’s a lot more than additional sales to be gained:

  1. Retail Products provide the opportunity to generate incremental sales and profit for the business and represents one of the few ways a salon can increase the $ return per/client or $ return per/hour.

  2. Selling retail products allows a salon to extend the salon experience to the clients’ home.

  3. Retail products create an additional reason for clients to visit/return and provide the means for promotions and client rewards.

  4. The way retail products are merchandise and displayed can make a powerful visual impression. This makes a salon more visible, enhances its appeal and can attract passing traffic and new clients (walk-ins).

Are consumers more likely to purchase their hair and beauty products from a salon than from the traditional places where they buy? Putting aside the fact that the time between salon visits is typically 4 to 8 weeks which corresponds to quantity/usage rate of most retail products - the answer is yes.

In our work as a management consulting firm, we've found that salons have a unique advantage over other outlets. That advantage is ‘trustand it's something consumers rate ahead of any other factor when it comes to purchase decisions.

When asked why they continue to return to the same salon rather than venture somewhere else, the number one response was trust. Allowing another person into your personal space and to touch you requires considerable trust and it’s this trust that sustains the relationship between client and practitioner. Clients believe the advice they receive and follow the recommendation made by their beauty therapist/hairdresser/or stylist and do so because they trust them.

Now, that we’ve established the benefits to be gained and the advantages salons have over other outlets, we can turn our attention to what needs to change for this to happen. But before that, I want to draw attention to the phrase ‘Would you like fries with that?’.

Would you like fries with that?' is a sales technique credited to McDonald's Restaurants. It emerged at a time when their customers were purchasing burgers but little else. Wanting to increase the turnover and profitability of their restaurants, research suggested it could be achieved simply by increasing the number of items purchased by existing customers. The same research indicated this solution would cost less and require less effort than what was needed to attract more customers. So, staff were instructed to ask those who only ordered a burger - ‘Would you like fries with that?’ and overnight the sales of fries, soft drinks and sundaes went through the roof.

Since then, this sales technique has been adopted by retailers across the world. So, if you were to purchase a pair of polished leather shoes from a store, you can expect to be asked if you would like shoe polish or spare laces with your purchase. Even online retailers have adopted this principle by using auto pop-ups to suggest related merchandise to what customers are purchasing before they checkout.

Insight into consumer buying behaviour can help explain why this technique is so successful:

  • The main purchase decision generates the most objections. Once this decision is made, additional related items are much easier to sell.

  • Consumers forget to purchase related items or may not be aware of them unless prompted.

..... Continued with Part 2


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