OPINION
In the past, spas have taken a somewhat generic approach to service delivery, with brand distinction originating from the pro- fessional skincare lines, host hotel brand or geography. As the industry continues to evolve, a spectrum of brands with distinc- tive offerings and unique positioning will be required to capture the full potential of consumer spending. As with other serv- ice-based industries, the spa industry needs to tailor its offering to various consumer segments in the market. The resulting stratification of brands reflecting unique service delivery will allow the spa industry to grow by attracting different demograph- ics, psychographics, spending trends and consumer profiles. There is a market for spa services that
range from intensive week-long retreats at luxury resorts to express nail salons in urban locations. Ideally, spas will even- tually encompass services ranging from beauty and pampering to preventive health and wellness. Unique brands can support each of these segments, in addition to variations within the categories. There has been a tendency in the spa
Securing funding will require relevant statistics
on spa performance and the power of branded solutions to expand market share
industry to qualify what should be consid- ered ‘a spa’ and what falls outside of the industry into other verticals. In the past, some industries have attempted to qualify what is included in their nomenclature; how- ever, most have never been successful. Consumers will dictate whatever business qualifies as a spa regardless of what the industry would prefer. Therefore, it is essential that branding is leveraged to provide the necessary differentiators rather than the industry qualifying what should be considered a spa. Some believe that many markets are already saturated with
spas. It may be worth considering that in most of these markets the spas are undifferentiated by brand or offering. While many local consumers typically follow service providers they trust, most spas compete on price or the proximity to a specific neigh- bourhood. Even in the most saturated markets, spas can compete with a refined menu of services, quality design and a service plat- form that reflects the brand positioning.
112 spa business handbook 2012
Location and distribution channels
In addition to service sector diversity, loca- tion provides another growth channel for spas. Geographic distribution may be evi- dent in the US, Europe and south-east Asia; however, there is ample opportunity in the emerging markets of Latin Amer- ica, eastern Europe, south Asia and Africa. These regions have attractive lower labour costs, new emerging consumer markets and abundant natural resources. Luxury hotels or resorts may not provide the opti- mum hosted environment for spas in these regions due to their limited distribution. However, there are consumers in these markets with an appetite for spa services. Companies with the industry expertise, cultural sensitivity and access to capital could experience considerable growth opportunities in these regions. Multiple channel distribution will also
be a critical component of growth for the spa industry. Currently, spas maintain relationships with their customer prima- rily through a physical location. Successful service-based businesses have strengthened their relationships with their customer
through electronic channels and retail extensions. Once brands become established, continuing a relationship with the customer can be maintained by building a community and delivering value- added services and content via the internet. International retail brands, such as Apple, Vuitton and Virgin have taken this approach successfully by extending their distribution channels and creating content that supports the lifestyle positioning of the brand.
Significant potential Should the industry supply the proper research to the investment community, there would be considerable interest in capitalising growth. Companies will need to demonstrate their ability to attract and retain customers through branded platforms and portfolios of solutions that migrate customers between brands. Retail extensions of service offerings allow brands to maintain their relationship
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