THE ISPA 2004 consumer Trends Report — EXECUTIVE SUMMARY

n a context where American consumers are looking for ways to slow down, simplify and feel connected, the spa experience is increasingly becoming a more sought after and relevant lifestyle experience. During the months of April through July 2004, The Hartman Group conducted ethnographic and qualitative research among spa-going consumers in Los Angeles, Houston, Atlanta, Chicago, Minneapolis, Boston and Seattle. Some of the key themes that you’ll find within this report include consumer perceptions of initiation into the spa experience, relevance of spas as a way of living, indigenous offerings, simplicity, customization, messaging and communications. These consumer findings and emerging trends were derived from U.S. based consumer research. However, we believe these attitudes, behaviors and trends have broader cultural implications and are intimately intertwined with developments in the spa industry internationally. Finally, each emerging trend does not exist in a vacuum but is interlocked and ultimately effects consumers’ perceptions of the overall spa experience.

While many American consumers aren’t quite ready to absorb and implement a view of spa-going as a long-term form of healing or therapy, we do find a segment of “Core” spa goers who typically believe that spas are an integral part of health and wellness (physical, mental, emotional and spiritual). They have become fluent in the ritual, language and behaviors of the Spa World and have incorporated these philosophies into a way of living. However, these consumers represent a very small percentage of the total population. Instead, most spa goers are still infrequent day spa users interested in Indulgence, an Escape, and perhaps specific benefits associated with Work (i.e., relieve a headache, soften tight shoulders, de-stress, etc.). They are thinking about the near term benefits of spa services. These benefits are usually defined on their terms, which means that they are most likely to approach spas with a ‘get-in, get-my-pampering, get-out’ perspective as opposed to a long-term, holistic approach to overall health and well-being.

While there are still those who view spa experiences as unnecessary indulgence, others quickly interpret it as much needed relief from a stressful and time famined life, assistance in the pursuit of balance and emotional stability. As spa use continues to become more “mainstream” (in terms of prices as well as cultural acceptability) it is likely that consumers’ ideals about spas will develop a life of their own and become interpreted as potential lifestyle activities that have less to do with strictly hedonistic pursuits of pampering and more with long-term approaches to healing and therapy.

The following key findings from this study are taken from the body of the report:

• The U.S. spa industry appears over-developed towards the Core of the Spa World, especially in terms of the range of high-end services and treatments available. This is especially true in terms of advanced hydrotherapy (e.g. hydrotherapy tubs and Vichy Showers)., Ayurvedic and other advanced treatments based on foreign, folk healing traditions (i.e. passed on through familial and/or cultural traditions).
• Consumers generally want “bread and butter” services (facials, pedicures/manicures, and basic massage) at Day Spas.
• Consumers experiment more when at spas on vacation and expect a broader array of “authentic,” indigenous as well as health and wellness oriented services.
• The Industry’s best long-term growth opportunity lies in moving more consumers from the Periphery to the Mid-Level of the Spa World through innovative marketing tactics.
• Most spa consumers appreciate highly refined entrance and transition experiences in spas, regardless of their level of experience or position within the Spa World. Interior design and ritual are the key to driving loyalty among all spa-goers.
• Periphery spa-goers are generally price-sensitive when considering services beyond the basics. Price is also a barrier for them in receiving bread and butter services once per month or more.
• Consumer visits to spas incorporate one or more of the following drivers:

1.

1. Indulgence (i.e. pleasurable, fun, appealing to the senses)
2. Escape (i.e. relief from pressures of social life)
3. Work (i.e. individual work (largely related to self-improvement) on some aspect of their body, their emotional state or their long-term spiritual and personal dispositions) Note: this is not related to one’s occupation.

• Consumers are primarily motivated by an interest in Indulgence and/or interest in accomplishing some cosmetic Work to the “on-stage regions” of their bodies (face, hair, nails).
• Overall, we feel that the spa industry, as a whole, has relatively few “threats” in the minds of consumers. However, based on this research, we have identified several areas that we believe should be acknowledged and monitored as the industry continues to grow:
  • Core consumers tend to be most catered to in terms of communications, menu designs and available spa treatments, but they represent the smallest percentage of the overall spa population.
  • There is an explosion of personal care/spa products that are capturing the attention of consumers everywhere, yet not capturing the attention of consumers while in the spa environment.
  • The spa experience is largely perceived by men as a form of Indulgence and Escape, however, the primary driver for men to enter the spa experience tends to be driven by notions of “Work.”
  • Introductions to spa experiences are primarily evangelized through consumers’ informal social networks (i.e. family, friends, co-workers). Yet, most spa advertising and promotion does not utilize these networks.
  • As the spa industry continues to grow and expand to mainstream consumers and their health and wellness regimes, therapists’ credentials as well as the overall effectiveness of the spa experience (menus, pricing, environment, “extras,” etc.) will come under greater scrutiny by all segments of consumers.
  • The desire for human interaction, personalization and customization will become important factors in consumers’ decision trees. These factors often run counter to rapid industry growth (i.e. internal expansion, centralization, nationalization, etc.).
  • Identifying the experience level of spa going consumers (i.e. Core, Mid-Level or Periphery) is critical in delivering the most appropriate and relevant information, interaction and services. However, it appears that most spas do not have a “system” for gauging experience levels and expectations from an attitudinal and behavioral context.
  • Many consumers have a difficult time “justifying” treatments that they may self-administer in the home (e.g. pedicure, manicure, facial). As personal care products continue to proliferate the market and consumers’ homes, differentiating these gateway experiences to the spa may increasingly become more difficult.

Consumer Trends in Spa-Going

These are primarily aspects of the spa experience which we believe consumers respond well to based on current social and cultural factors. At this point, we don’t see that consumers are actually driving trends, in the sense of communicating collective demands to which the U.S. spa industry actively responds. This is largely due to the fact that the activity of spa going is relatively new to most American consumers (as opposed to other health and wellness regimes such as visiting a doctor annually, taking a multivitamin, etc.). Therefore, much of this trend is being driven less by personal reflections on needs and desires, and more from a broader social and cultural level. The trends here are those driven by consumer reaction to various spa experiences:

• Higher Expectations Among First-Timers
• Men are Warming Up to Manicures and Facials
• Children Introducing Parents to the Spa Experience
• Teen-Agers Are Entering the Spa World for Cosmetic Spa Services
• Consumers Want Series Pricing
• Treatment before the Treatment
• Gender-Neutral Interior Designs
• Keeping it Simple
• Consumers Experiment with Treatments featuring Local and Indigenous Elements
• Hydrotherapy as Alternative Touch
• Core Experimentation with Ancient Massage
• Chair Massage as Gateway to Spa Interest
• Back to the Basics at the Day Spa

Broader Cultural Trends in Spa-Going

These are broad, cultural trends that intersect with the Spa World and which spas need to pay attention to as they evolve and as they market themselves to the broader public. Each of these will be explained in detail in various portions of the report:

• The Re-Awakening of Male Grooming
• Mother-Daughter Bonding
• Gender-Neutral Interior Design
• Consuming the Local and the Indigenous in Food, Furniture, Design, etc.
• Minimizing Retail Product Choice, Maximizing User Experience
• Food at Spas as a Bridge Between the Inside and Out
• Customization