Yulia Fransisca, Research Analyst with Euromonitor Singapore, shared “Uncovering the Gems: Research on New Customers and Trends for the Spa Industry.”  Euromonitor is an independent market research firm that focuses on beauty, personal care, wellness, and travel.  Some of the key points:

Asia Pacific, including China, India and Indonesia are the growth spots in the new global economy.  India has seen increases of 21% in spa retail, China 12%.

• Blackberry’s fastest growing market in the world is Indonesia.
• By 2013 urban dwellers in China will outnumber rural population for the first time; this means an increased exposure to the modern lifestyle.

Youth and wellbeing is growing in the US from $1.3b in 2006 to $2.8b in 2010, including a surging demand for beauty-enhancing drinks and strong performance of vitamins & supplements.

Premium brands are leading cosmetics sales growth, but consumers looking for value are fueling masstige sales as well. Euromonitor delivered a great deal more data, which I’ll cover in depth in some future blogs.

We next were challenged with  a selection of breakout presentations, quick roundups below.

Social Media – Josh McCarter, Liz Terry, Kat Ancketill, Marc Smith. Smith says that social media is no longer about the “how,” it’s the device.  Mobile is the future, our device is with us at all times.  In the future, we won’t have to ask clients how they feel when they get to the spa, we’ll already know!  Social networks support peer-driven behaviors, which can be good for spas if clients are trying to lose weight, live healthier lives by making better choices.  Policy makers in government only have GDP data to go on for now; hopefully soon they’ll have wellbeing data to make planning more effective.  Ancketill shared a new innovation from Best Buy that spas can definitely use; gift card recipients can sit in front of the computer and type in a unique code from the card to hear a pre-recorded message from the gift giver.

Consumer Trends – Anna Bjurstam and Jacqueline Clarke. Beauty is a popular but fragmented sector, and multiple units still represent less than 15% of the total (except for China) but are growing fast.  Industry consists of a) hair salons and b) beauty salons.  Hair salons represent 75% of personal beauty budgets.  Beauty salons solve visible problems and clients have that expectation.  Facials, hair removal and body care make up 70% of beauty salon sales.  It is important to offer services that cannot be easily reproduced by others or at home.  Facial services drive higher revenue through average ticket and added retail.  It is essential to offer beauty services as they keep customers coming back.

Branding – Susan Harmsworth, Catherine Feliciano-Chon, Dave McCaughan, Vajravorn Tasukon.  Brands are “feelings” surrounding an experience.

Just because a brand is “liked” (Facebook) doesn’t mean it is the strongest brand or has the best following.  Spas fail 90% of the time to meet the expectations of the consumer, and this is likely because we ourselves have created unrealistic expectations through our marketing messages.  Spas need to be meaningful, but not necessarily cutting edge or innovative.  The number of spas in the room engaging consumers in service and product development was less than 10%; not good!  Days of “build it and they will come” are long over; we need to ask clients what they want and then give it to them.  We need to focus on knowing our customers, and don’t forget we are “touch” businesses.

Innovation – Charlene Florian, Ian Lyons, Dietmar Moeller-Elmau, Nic Ronco, sha..  As one might imagine, these innovators are unique individuals and not necessarily able to advise others on an innovation process.  Most created their businesses based on their own observations.  For example, Moeller-Elmau created a spa because he could not find a spa that made him happy; he does not like to go to a spa where everyone walks around in the same bathrobe, and no one is smiling.  So he created a spa that has all of the features he was looking for (Schloss Elmau Luxury Spa, Germany) and in fact, has two in his hotel; one for families and one for individuals.  Ronco reports that innovation does not come from asking customers what they want; they don’t know.  He says innovation is a process of subtraction, not addition.  We need to figure out their unexpressed needs.  This session Q&A was a spirited one, and ended with a group discussion of whether detoxification was “bull&#*” or not.  The group decision was that detox procedures should not always center around the bowel, and it’s important to ask “what” a customer wants to detox from before using that term.

Lunchtime offered an opportunity for more discussion; 35 different table topics running the gamut of subjects.  After lunch was over, we returned to a keynote presentation by Dave McCaughan, EVP of McCann Worldwide for Asia-Pacific.  Cathy Chon introduced McCaughan, and to assuage our fears on hearing about Asian consumers from a white guy, she described him to the audience as an “egg,” (white on the outside, and yellow on the inside), whilst characterizing herself as a banana (yellow on the outside)!  McCaughan’s presentation was entitled, “What Every Business must Know Today About Asian PEOPLE, Not Consumers.”  He said that Asia is about breaking ground, moving forward, getting everything you can.  Asians are always looking for the latest style or trend, but they can’t be called consumers til they actually consume something.

McCaughan told us that for every country in Asia, the fastest growing segment is the aging population, and yet Japan’s fastest selling product was an electric guitar; point being we have to consider the mental age and desires of our audience.  He also shared the results of a humorous survey where Asian women were asked to photograph the thing in their home they would miss the most if it was destroyed; the most often-photographed item was a western-style toilet!  The a-ha moment was that anyone in a hut can have electricity, but a toilet represents access to middle class infrastructure, and makes the difference between a house and a home.

McCaughan gave us 8 themes to consider:

1)      Open to Change – mobile lifestyles, access to technologies

2)      Success re-defined – 5 c’s of success : cash, car, condo, club, credit card

3)      The family expects – evolving into the middle class because that outcome is assumed

4)      Mobility of the home – technologies to enhance life

5)      Recreating of ourselves as/for tourists – Chinese people now booking 522k airline tickets    every day, new education hubs

6)      Power in the Hand – we can’t swtich off when life is just waiting at our fingertips

7)      Functionality of Easy Wellness – such as a toilet that analyzes your urine or doctors that prescribe a WiiFit for sedentary patients

8)      Real value of brands – brands are under constant reassessment by consumers, we have to give them new reasons to consume.  Don’t tell me that I’m going to be your consumer, reach me as a person.

 

In closing, McCaughan said the continued popularity of spas would be based on rising affluence, information exposure (understanding the need to relax and reduce stress), competitiveness, and increased stress levels.  He also shared a few important considerations:

• Chinese consumers have grown up in a one-child world, and have never learned to share.  The pressure to care for aging parents is thus causing social disruption, they’ve been self-focused their whole lives.
• India has at minimum 9 different languages; no such thing as a nationwide campaign.  Launches in India have to happen by region.
• Fortune 100 companies are all using spa images to communicate relaxation and stress relief; the risk is that this pervasiveness standardizes spas; we’ll have to take care to stand out.