March 2009

Retail Matters

Retail Matters | by Gordon Miller


Clients Like Retail – They Really Do!

Last year, American consumers spent over $62.5 billion on hair and beauty products. Clearly, Americans love their beauty and are not afraid to invest in it.

The question therefore isn’t whether or not some clients will buy take home products from their favorite salon but rather are you prepared to get in on the action – and reap the many rewards associated with making retail really matter as a part of your salon’s strategy for success.

Whether you consider retail a natural extension of services or simply an add-on sale at the front desk, with the right mix of retail products, process and promotion, you can add significantly to your salon’s bottom line.

Getting started: Buying right

From value options to pure luxury and every price point in between, salons have literally hundreds of brand options to choose from among the many professional products available to salons and spas. Building a success retail business in the salon starts with making the right buying choices for your salon, staff and clients.

The front desk driven approach that depends on the receptionist and waiting area to drive sales while discounting the impact of stylists on the sales process (an often common way of thinking in booth rental salons).

Other considerations in your brand selection process relate to client demographics, spending habits and perceived price point limitations (as a function of service price levels).

Also of great importance is taking into consideration the size of your retail area, amount of walk in traffic vs. appointments, type of display, salon image and overall service focus as it relates to the needs of the specific brands being considered.

Taking Control

Once you’ve settled on an appropriate retail strategy and brand mix, you’re ready to consider your investment – and the appropriate processes to protect it – otherwise known as “inventory control.”

Retail experts seem to agree that salons new to retailing should start low on minimum orders and add inventory incrementally until you have some history under your belt and can find the right balance between product on the shelf and cash in the bank. Experts seem to agree that most salons have a tendency to have too much product tied up in inventory – especially in slow moving items.

In today’s computerized world, no retailer worth their salt would be without a software program to assist in determining product minimums, automating inventory counts and alerting you to how much is needed and when to make your next order. Such programs should provide you with management tools such as turnover ratios, gross and net gross margins and more. Pay particular attention to data regarding “inventory turns” as these are key profit indicators. An item whose inventory is sold (turns over) once a year has higher holding cost than one that turns over twice, or three times, or more in that time. Some of the best retailers in the industry will tell you that “four” is the minimum number of turns to accept for inventory -and six turns insures a very healthy bottom line.

Another important tool can be a strong distributor sales consultant (DSC). He or she should be your partner in building your retail business. You want the best retailing consultant for some one-on-one consultation. If you don’t feel you’re getting the attention you need or deserve, consider a new distributor.

When it comes to inventory management, It all boils down to knowing what you have, what it costs to have it on the shelf, how much you sell and how often, who buys it, when they buy it, and how much is costs to keep on your shelf.

Know the answers to these questions and you’re on the road to unlocking secrets of successful inventory control – and setting yourself squarely on the road to retailing success.

Gordon Miller is the Executive Director for the National Cosmetology Association, the largest organization of salon professionals in the world. Its mission, since its inception in 1921, has been and continues to be to ensure that working salon professionals have the tools and resources available to create career success with integrity. For more information on the NCA, visit or call 312-527-6765.

Don’t miss NCA’s “Retail Matters!” seminar at IBS New York (April 26-28). Programs include: Salon/Spa Retailing: Don’t Sell It — Systemize It, How to Build Huge Cash Flow! Salon Cash Flow; The Untold Retail Story; Ten Steps to Successful Retailing and more. Modertated by NCA’s Gordon Miller. For information on these and other NCA programs, go to