Online sales of professional products has hurt salons in a huge way. I will offer a 5 point solution to reconnect professional product companies with salons and their teams.
I have been a salon owner since 1996. I still love my business more today than I did when I first started in 1996.
Starting a salon in 1996 was very different than it is now. Back then salons felt like they were on the same team as the product companies they chose to align themselves with.
We were taught to believe that professional recommendations to our clients were an extension of the services we performed. The product companies showed us the importance of strong retail numbers and that selling a minimum of twenty percent retail to service was a reasonable and attainable goal.
For years this has been a major part of a salon’s strong P&L statement.
Retail is never out sick, Retail is what makes our work shine after our work is done. Retail has always been part of our salon’s success and growth.
I attended a business conference a few years ago when the president of one of our product companies announced the “EXCITING NEWS” that they would now begin offering online sales to customers. As in a discount for professional salon products when purchased via their online website. Fast forward to today 2024, next week one of the professional product companies is offering a 25% off sale when the products are purchased through them directly online. The company encourages salons to offer the same discount. If you do the math correctly the salon will make a 13% profit off the products when taking out expenses such as stocking the product, paying the service provider commission & points redemption. This is not taking into account restocking the products on the shelves. The MATH doesn’t work. Even when getting the retail items at a discount from the product manufacturers.
Many if not all professional salon companies are now online, directly competing with their own salons. This has created a wide disconnection between us. Rather than feeling like we are on the same team like we did when we first started working together, we are now scratching our heads to try to compete and stay afloat.
It is impossible for us to battle the steep discounts that the product companies are offering our clients. I have seen numerous fiery conversations in private Facebook groups with business owners at a loss in how to gain back the retail sales they have lost and are continuing to lose.
The conundrum is that many salons are now ordering less product, and this just fuels the need for the product companies to go direct. It is not healthy for our businesses to have less product turnover. We know we need products on the shelves to sell, but when sales are declining because clients are purchasing their products online, the cycle continues.
Along with our retail percentages decreasing, the salon industry’s team morale has also declined in relation to selling professional products. As they have been taught that their recommendations matter only to learn that their clients have purchased the product directly from the product companies. They understand the free shipping, and large discounts are hard to pass up on for customers.
This has become a problem in salons of all sizes. Retail has often been the extra bread and butter that keeps our businesses profitable.
The purpose of this blog is to bring to light what so many are feeling and to offer a 5 POINT solution to create a way for retail companies to go back to being on the same page and team for salons & spas.
My wish is to reconnect salons & spas with the companies we have loved and been in partnerships with for so many years.
FIVE SIMPLE SOLUTIONS
1. STOP ALL ONLINE DISCOUNTING OF PROFESSIONAL PRODUCTS.
Professional product companies should Never Ever Ever do a sale. It’s harming our in-store sales of products.
2. PRICING ONLINE should be 15-20% HIGHER than in salon or store purchases.
This is an immediate solution to address competing with salons
This will allow salons and spas to encourage clients to shop directly with them in the salon/spa.
3. STRONG LANGUAGE ONLINE TO PROMOTE A NARRATIVE THAT CREATES PARTNERSHIPS.
“Shop local, we support our partners who sell our products. You will receive reduced pricing when shopping locally with our partners. Click here to find a store near you” (Dropdown of salons/spas when entering your zip code.)
4. CREATE A WAY FOR CUSTOMERS TO CLICK ON LOCAL SALONS TO PURCHASE ONLINE WHEN BUYING IN-STORE IS NOT POSSIBLE.
Make easy drop down buttons for customers if they do shop online. A dropdown of salons pops up when you put in your shipping zip code. Once a salon is chosen a drop down of service providers appears so the business owners can assign credit where it’s needed. If the prices are 15-20% higher online it will be easy to give the salon a 15-20% commission of the sale!
5. COMPLIMENTARY PRODUCTS FOR THE STAFF.
I believe teams will promote and sell products if they have access to experience them and connect with their sales reps while learning about the products on a deeper level. Retail companies should be offering salon owners ways to reward their team with their retail purchases.
KNOW THE MATH WHEN OFFERING A SALE or to match a online sale.
25% off products.
$200 Sale of products.
Discount is $50
$150
Subtract cost of products. $100
Subtract cost of offering points $15
Subtract cost of Credit card fees 2% ($150) $3
Subtract Commission paid to service provider $15
Total Profit: $17
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
Charles Darwin