Coldwater Creek to Pamper Customers with Spa

Discussion
Apr 26, 2006
George Anderson

By George Anderson


Coldwater Creek says it is in the business of helping its customers “get away from it all” and a new spa concept the retailer is testing should give them one more avenue to do that.


In an interview with DSN Retailing Today, David Gunter, a spokesperson for Coldwater Creek, said, “Our shoppers’ demographics are very similar to those customers that use spas. It was a natural fit for us to move this direction.”


Coldwater Creek targets women between 35 and 60 with an average income of $75,000 with its line of clothing and accessories.


“We see an opportunity to break into this business because as it is right now, the spa business is fragmented. It’s a lot of freestanding stores,” said Mr. Gunter. “But it’s also a highly profitable business – it’s an $11 billion business today.”


The retailer opened its first Coldwater Creek – The Spa on April 5 near Portland, Oregon. It plans to open five additional test units by July in Simi Valley, Calif., Lakewood, Colo., Naperville, Ill., Santa Rosa, Calif. and Southlake, Texas.


Mr. Gunter said the Spa locations are to be located near existing Coldwater Creek stores (the company currently operates 179 with plans to open up to 65 more this year).


“The idea is to drive traffic from one to the other,” he said. “At point-of-purchase, we can book a customer for an appointment right then if there’s an opening, and she can walk right over to the spa. It’s also a chance for us to spread the word to our customers by face-to-face contact.”


Moderator’s Comment: Assuming it is priced competitively, do you think Coldwater Creek is on to something with its
spa concept? What do you see as the opportunities and challenges facing Coldwater Creek as it looks to move into this consumer market?

George Anderson – Moderator

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14 Comments on "Coldwater Creek to Pamper Customers with Spa"


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Camille P. Schuster, PhD.
Guest
14 years 10 months ago

With the right kind of spa there is certainly opportunity here. Spas are definitely a fragmented market – anywhere from a hair salon offering spa services to hotels adding spa services to exclusive destination spas. If Coldwater Creek identifies the kind of spa services its customers would like and which services they would use and which services they would use on a regular basis, the opportunity for cross-selling would be great.

Bernie Slome
Guest
Bernie Slome
14 years 10 months ago

Spas have increasingly been selling products to their spa clients, so why shouldn’t an upscale ladies retailer delve into the spa world? A world where a woman can be pampered. It allows for cross-selling to a higher income person, the dream of any marketer. This concept enables Coldwater Creek to keep some of their customers for a longer period of time and bring others into their stores/salons when they otherwise wouldn’t. Great Idea!

Mark Lilien
Guest
14 years 10 months ago

As long as the execution is excellent, the spas will make money, since their marketing cost will be leveraged by appealing to Coldwater Creek’s current audience. Certain department store locations (the pre-World War II Macy’s downtowns in Chicago, Minneapolis, and Manhattan, for example) could also have their surplus space turned into spas. Just those 3 locations total over 100,000 square feet of underutilized space.

Don Delzell
Guest
Don Delzell
14 years 10 months ago
This has a strong possibility to be successful. Here are the variables I think must be managed: 1. Consistency of experience: a great deal of marketing is going to be referral and word of mouth. A single negative experience will be sufficient to extinguish interest. This addresses all aspects of operational consistency and efficiency. 2. Trial: the marketing must include some method of trial which is low in cost, low in time investment, and disproportionate in value delivery. 3. Price sensitivity: value. What this industry lacks is a value focus. Not low price, but value. CC must deliver value to succeed on a large stage. In order to deliver value, they have to know what that means to the target market. Or, they have to TELL the target market what value means, and then deliver. 4. Loyalty: the business makes its money off two segments. First are the vacationing seldom-users…will generally pay more and expect a lot of bells and whistles with the service. Second are the repeat customers, the serial users. These are the… Read more »
Eliott Olson
Guest
Eliott Olson
14 years 10 months ago

With the right locations, some will work. Best Buy just closed their first store with a spa because of location while other test stores remain open.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
14 years 10 months ago
Wow, I’m having a difficult time understanding exactly what this “new spa concept” is. Is Coldwater Creek testing something they call a “spa,” but which is really a nearby clothing and accessories boutique? And the big deal is that while shopping in the boutique a customer can whimsically take advantage of “an opening” and “walk right over to the spa?” So, would this be like shopping in an autoparts store and taking advantage of an opening in their next door lube shop? What a concept. Like making the trinket shop in the waiting area of a carwash a primary purchasing destination and, oh by the way, you can also get your car washed if they have an opening. Will Coldwater’s new gewgaw shops be self-sustaining and able to stand on their own? And, if so, what compromises will they have to make in selection, pricing, and communication? Overpriced gift and clothing shops located in spas are nothing new. Pampered ladies with too much disposable income exit the spa, feeling good, and in a pliable spending… Read more »
Mark Burr
Guest
14 years 10 months ago

Being male, I just might not be the right judge here. However, I have shopped the store for gifts both with my wife and without her. Either way, it was a rather lackluster experience at two separate locations. From viewing the shoppers present, the product, the staff, etc., I would find it hardly likely that one could make the hop, skip and a jump from this retailer to a ‘spa.’ I could however, be missing something.

From my view, a ‘spa’ suggests something a little extraordinary. My impression of the retailer, from both in-store and catalog, is that they are something far less – a very average retailer. I am not sure that the client base that I perceive transfers to ‘spa’ users.

Bernice Hurst
Guest
14 years 10 months ago

Doc’s witticisms and Scanner’s scepticism not withstanding, this is a concept that I believe could tempt hard hearts like me. I generally find shopping for clothes exhausting and stressful, far from the retail therapy that much younger women seem to enjoy. If there was a nearby and convenient opportunity to be treated and pampered, and to relax before facing the drive home, I might well stagger down the road. I would be far less tempted to go to the spa first and the store afterwards. Sort of defeats the object of getting myself all nice relaxed I reckon. Coldwater Creek is now on my list of Must Visits for my next trip to the US.

Carol Spieckerman
Guest
14 years 10 months ago

Remember this thread this time next year… by then, multiple retailers will have introduced new concepts designed to appeal to aging baby boomer women…all will offer never-before-seen product combinations augmented with spa and wellness services either under the same roof or as adjacent spin-offs. Will Best Buy’s recently pared down Eqlife and Coldwater Creek’s spa concept still be around? The trend will carry on with or without them. May the best female-focused, shopping-as-experience, wellness, product/service/etailer/retailer win!

Jeff Weitzman
Guest
Jeff Weitzman
14 years 10 months ago

I agree with Mark that the shared marketing costs are an advantage, but if the “spas” are not inside the stores, I’m not sure they have a major advantage. The idea of a “chain spa” doesn’t evoke the glamour of a day at Georgette Klinger or a weekend at Canyon Ranch. If Coldwater Creek has the right demographic, any spa might do as well by locating as close as possible to their stores and cultivating the right reputation.

Why let the customer leave the store? I think the cross-marketing would flow the other way — make a spa appointment and show up an hour early; do your shopping and don’t worry about being all mussed up from trying clothes on, etc. Leave feeling and looking great, maybe wearing that new outfit you just bought. Let customers check in at the spa, give them a beeper like at a restaurant so there is no waiting at the spa. Make sure the spa has a bag check to hold all their purchases while they are pampered.

Michael Tesler
Guest
Michael Tesler
14 years 10 months ago

No. The clothing shopper is time scarce and on a mission and not necessarily looking to be slowed down and relaxed. So what they are is a brand that people semi-know; there are good spas everywhere with local connections and community ties. They would be wise to stick to trying to be the best in their niche before extending their time and resources into other areas.

Bernice Hurst
Guest
14 years 10 months ago

I’ve just conducted an experiment. As I said earlier, I don’t know this store, although I would like to see it for myself next time I’m on their turf. I did look at the website today though. Several of the items were listed as “imported” so I clicked on customer service and read the usual blurb about how they pride themselves on their excellent service which I took with the usual pinch of salt. I then emailed to ask where several items were imported from and within an hour had an extremely polite and relevant response – NOT from an automated call centre – giving me a preliminary answer and offering more details for any specific item I cared to ask about. If this is an example of their attitude towards customers then I think there is every chance they could get a spoiling spa type of affair to work.

Odonna Mathews
Guest
Odonna Mathews
14 years 10 months ago

I think the concept is an interesting one with a good chance of success. Coldwater Creek has a following which is growing, it seems to me. Having more “experiences” related to its goods and services would appeal to women customers. Making an appointment online and then going to the store to pick up a few items before or after seems convenient to me. There are many locations nationally. In addition, they seem to provide value to customers in service and price, so having a reasonably priced spa with a choice of services would seem to be in line with Coldwater’s presentation as a retailer. Customers at the first store will be a good judge, for sure.

Stephanie Johnson
Guest
Stephanie Johnson
14 years 10 months ago

Although the idea of combining retail with the spa element is justified, Coldwater Creek runs the risk of not appealing to their target market. Now that they are opening stores in shopping malls, their target market median income “shopper” will change. Presently, they are opening a retail location in Danbury, CT. Although this mall houses such stores as Gap, Lord & Taylor, Abercrombie, and Coach, its location is not one that would benefit from an attached spa. The spa has to be the destination and the retail line a continuation of that experience. A mall is not going to generate a true “spa” experience. If Coldwater Creek intends on making these locations work, they should consider locations that make “it” the whole destination. The distracting smell of a food court does not scream “spa”.

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