Archive for September 9th, 2010
Neiman Marcus has just launched it’s first-ever NM Beauty Awards, an online customer-choice event where participants can vote for their favorite products. When visitors log on to www.neimanmarcus.com/beautyawards, they are invited to vote for their favorite beauty products in 14 categories, including treatment products, eye and lip care, cleansers, makeup, and more. By voting and filling out the entry form, participants will be entered for a chance to win the most popular product from all 14 categories. Customers who purchase $100 or more in cosmetics or fragrance will receive a tote filled with this season’s hot new beauty essentials. Voting is currently taking place in conjunction with the Neiman Marcus Fall Beauty event , which began Sept. 7 and runs through the 19th, so log on now!
As part of a $6 billion brand revitalization effort, Sheraton Hotels & Resorts will be adopting a new signature spa concept called Shine for Sheraton. Shine for Sheraton will debut in new properties across the globe and as a new spa solution for existing hotels and resorts and will be featured in 17 hotels by 2011. As part of the concept, Sheraton has selected Germaine de Capuccini as the preferred product partner for Shine spas. The concept was created to offer both business and leisure guests an upscale, approachable spa experience, and part of this experience will include five signature treatments from Germaine de Capuccini, including a massage, a facial, a body treatment, a manicure/pedicure, and a treatment for two.
Designed to evoke a welcoming and relaxing arrival, Shine for Sheraton spas will utilize colors and materials that convey a playful yet upscale environment. Rich, lustrous materials in warm creams, browns and burnished gold will be highlighted with vivid cobalt blue, tourmaline and coral accents. Throughout the spa, materials with innate shine such as, marble and onyx, high gloss mahogany, polished metal, and glass will be incorporated in homage to the spa name.
The brand’s signature new spa offering is currently available at select hotels in China, Vietnam, the Maldives, and the Slovak Republic. The global roll out of Shine for Sheraton will continue with l2 openings scheduled over the next 15 months including the Sheraton Shanghai Hong Kou, the Sheraton Beijing Dongcheng, and the Sheraton Yantai Golden Beach Resort followed by further expansion in North and Latin America.
In our September issue, I wrote a piece on the subject of Groupons. In addition to benefiting myself from the power of collective purchasing, I also found several spa owners singing the praises of this new phenomenon. However, in the last month or so, I’ve also come across several spa owners firm in their beliefs that such discounting ultimately undermines their businesses, or at the very least, doesn’t appear to deliver the boost in business that it promises. Earlier this week, I received the following email detailing such a scenario:
I was just reading your article under the heading “Let’s Make a Deal” in the September issue of American Spa magazine. Although I think that this column is eloquently written, I think some issues about Groupon should be explored in regards to profitability. Just as an example, if we offer a 60-minute Swedish massage regularly priced at $70 for 50 percent off at $35, and we pay commission on this amount at possibly 45 percent, which amounts to $15.75, that leaves a gross profit of $19.25. Now let’s not forget that we have to give Groupon 50 percent of the service selling price of $35.00, which is $17.50, which leaves $1.75 as net. If one does not mind this small profit margin, we need to think about how much are the cost of products (massage oil, etc) to perform this service. Also, we need to allocate a portion of our general overhead expenses (electricity, rent, reception, payroll taxes, etc). An additional concern should be that our experienced massage practitioners will not be too happy with a gross commission of $15.75 before income taxes. Also, take into consideration that assuming we sell 300 Groupons, which from our experience with gift certificates, 60 percent will be redeemed in the first 60 days, taking full-paying client spa capacity away, you have a logistical, a financial, and a staff dissatisfaction problem on your hands. Client retention from Groupons is also iffy, as this offer can be found and repeated at other spas, making it unlikely that repeat business at full price will occur. Don’t forget that the customer who purchases a Groupon is a savvy consumer and could also be one of your previous full-paying repeat clients.
We’d love to hear your thoughts about Groupons as well as any experiences you’ve had with the discount website. And feel free to also give us your take on discounting in general. Have you found ways to do it that aren’t at the expense of your bottom line?