In many day spas, inventory management is the least-coveted task. Indeed, it takes a detail-oriented staff member to properly track and manage a spa’s arsenal of retail items. Here are some strategies to keep you on course to reap higher retail sales—with less overstock.
1. Choose an “inventory captain.” There are plenty of software programs designed to help track inventory, but a human being is still essential to monitoring what goes in and out of your spa—and into treatment rooms. You may want to assign this task to a front desk person, since these employees physically see what’s moving, or delegate the job to a spa manager. “We task our general manager with handling incoming inventory and go to great lengths to reduce shrinkage via password-controlled access to track sheets,” says EsSpa’s Eva Kerschbaumer. “However, our most difficult issue still lies in monitoring and tracking inventory, because therapists sometimes grab items off the retail shelves to use in treatment rooms without proper communication.”
This is where an old-fashioned hand count comes in, according to Schoenberg. While he also suggests using an inventory software program (see below), he says it’s a must for someone to regularly count products to keep shrinkage to a minimum.
West-Harrison suggests an inventory protocol that includes daily walkthroughs with staff. “Take stock of what’s there and help employees identify alternatives if something they need is out of stock,” he says. “Too often inventory gets forgotten about and pushed to the end of the to-do list.”
2. Use an inventory software program. There are several options available. Look for one that allows you to centralize your lists in a single file, easily access stored historical purchases and notes, keep track of vendors’ pricing and track past buying/restocking activity.
3. Order based on existing sales results. “Many spa owners and managers think that good inventory management means having plenty of stock on hand at all times, but what it really means is having the appropriate amount—enough to satisfy potential demand, but not so much that capital is tied up unnecessarily,” says Starr. “The products you carry year-round have a history that you can easily access through your software. Looking at what has sold in the past, and at what frequency, will help you to forecast future sales and make purchases accordingly.”
To simplify this task, Starr suggests making a list of your 10 top-selling and bottom-selling products. “If you have five SKUs that have not moved in the past six weeks, put those products on sale, clear out your stock, and put the money you would have spent on replenishing them into your top sellers.”
4. Befriend vendors. No one wants to be left with boxes of leftover product that won’t sell, so always inquire about minimums when testing a new product. “Go slow when you bring in new retail,” cautions Schoenberg. “Negotiate with vendors and order minimums; don’t get excited and order too many. Overstock on shelves is money. Ask vendors about product turnaround time, and forecast to have three to six items in the back bar.”
Build a good relationship with your vendors so you can quickly obtain more product when you need it. “Ask them about their best-selling items, return policies and restocking minimums, and get the answers in writing,” Schoenberg says.
5. Stock products that sell. This may seem impossible to gauge, but try to carry a mix of products that appeal to all budgets, yet cater to your unique clientele. After all, the spa that only carries $150 moisturizers will not move as much product as the one that offers the same creams alongside $35 lotions and $20 candles. Some of the easiest items to retail, according to Schoenberg, are hand creams and candles—anything you might consider an “impulse buy.”
Another way to figure out what will sell? BeauteeSmarts’ Carol Phillips suggests surveying shoppers or checking into the buying patterns of your top 20 clients for instant insight.
6. Consider product benefits. Deserving Thyme Lifespa’s Mark Deans advises stocking products that offer both diversity in protocols and multiple client uses, such as scrubs for body and feet, lotion for face and hands, etc. “With versatile products you can carry eight SKUs instead of 16 and get a faster return on your investment,” he explains. Deans adds that too many choices and scents can be overwhelming for consumers and hinder sales. “Take a look at your most popular treatments and products and then pare down,” he advises. “Focus on benefits and value instead of multiple scents.”
7. Move inventory via treatments. While therapists should already be in the habit of recommending products after performing treatments, consider making this easier for them by creating programs such as Lifespa’s Service + Saving Promotion. Deans explains, “A client receives 15% off the retail price of any skincare product when purchased on the same day as their facial.”
8. Consider shelf-life. While last-minute ordering may not be the right practice for everyone, Eva Kerschbaumer reports that it works well for EsSpa, given the relatively short shelf-life of its organic, natural offerings. Not only does this allow the spa to reduce returns due to expired product, but Kerschbaumer says it helps her better meet the immediate needs of her clientele “without having to worry about large inventories of product in storage.”
9. Curb returns. “I always offer 10% off any retail product if a client will sample it before buying it,” says Stacy Cox, owner of Pampered People in Los Angeles. “I get the samples from the vendors, and it often saves a return. If a client calls after sampling and says she loves the product, and the sale is worth more than $200, I’ll personally deliver it.”
10. Out with the old. Always keep your inventory looking fresh. Phillips says to take any item that doesn’t sell and discount it for 30 to 45 days before donating the remainder to a shelter, writing it off or dumping it. “Don’t have it hanging around the store forever because it saps other sales,” she says. “Highlight this season’s displays to get everyone focused on new products. If you’re working with a four- to six-week display cycle campaign—definitely shoot for four weeks if your clientele visits monthly—all stock, posters, emails and displays must be changed out, too.”
While you should already be on a monthly ordering schedule, InSPAration Management’s Dori Soukup says owners should aim to turn inventory over completely three to four times per year. This task, of course, is made easier through proper staff training. “Educate your team on retailing and make sure there are rewards or consequences when they do or do not reach targets.”
“Remember, products are money, and you don’t want to have your money sitting around on shelves collecting dust,” concludes Starr. “If products are not selling or are regularly turning, they are not working for you.” —Liz Barrett