Retailing saunas in a tough economy

Saunas 0310For some hot tub retailers, saunas have recently provided a bright spot in an otherwise laggard market. While the complementary relationship between saunas and hot tubs has long given retailers a reason to include the category in their lineup, it's only been within the last few years that the spotlight has shifted to saunas in some showrooms.

Retailers agree that a 50 to 70 percent decrease (depending on who you ask) in hot tub sales is one of the main reasons they have ramped up their sauna presence, redirecting traffic to the warmest parts of the showroom.

On Display

"We made a conscious decision about three years ago to really become the sauna experts in our market," says Bob Stencavage, co-owner of Oasis Hot Tub & Sauna, Nashua, N.H.

"We really put more effort into it. As a result, we brought another eight displays into our showroom (in addition to the 20 spas already on display). So we set it up to show people we are in the sauna business instead of just having this accessory over here in the corner behind the chemical counter."

New England Spas in Massachusetts also expanded the number of floor models in each of its three locations and found that the more they promoted the product, the more customers paid attention.

While each of New England Spas' retail stores has always carried saunas, they've just recently set up more working models to encourage customers to take what owner Norm Coburn calls a "sweat test."

Coburn admits sweat tests aren't the most popular thing with potential customers (after all, who really is comfortable taking off their clothes in a retail store where people can see them wrapped up in nothing but a towel?), but he says that with his new setup, many people at least go inside and sit down, giving them a sense of what it's like to experience a sauna. "If we can get them to come in to see the product and kick the tires, they will see where their money is going."

These proactive showrooms with working saunas were lacking a few years ago, stunting its potential for growth.

"I think a lot of retailers in the industry across the country were really looking for ways to sell more stuff to their existing customers," says Coburn. "For a lot of them, I think saunas either weren't on the floor, were very minor, or they were a background thing they didn't really pay a lot of attention to."

And the lack of attention to saunas was pretty common because there was a time when their sales weren't dependent on them.

"When times are good, you are focusing on what you do the best," says Stencavage. "We were just chugging along at a record pace every year, so you tend to ignore the other aspects of the business that might be your secondary lines, like saunas or sunrooms. We were tending to not put as much emphasis on those areas of our business because it was just gangbusters for so many years.

"But when we started to see the trend going the other way, we thought, 'You know what? We've always had saunas, and we've always done OK, but we haven't given them their due.' We really have focused on them since then."

The slight growth is a much-welcomed break, and retailers continue to do what they can to keep the momentum going, including being realistic about the sauna market.

Moving Product

According to Stencavage, saunas sales require a longer gestation period than hot tubs, and that needs to be recognized in order to better understand the customers retailers are trying to reach.

"Hot tubs have been largely impulse buys in the past. It's a tangible experience that most people have had at a vacation resort or a friend's home. A sauna is more the kind of thing that takes a longer time to mull over about where you would incorporate it in your home. So we kind of plant the seeds when they are here [in the store]."

There are basically two types of saunas customers can choose from - traditional and infrared - and depending on who you ask, there are benefits to both. But again, it all comes down to what the customer wants.

"One of the first questions I ask is, 'What has your experience with saunas been?' and some people will tell me they grew up in Finland or how their grandparents were Finnish and they used to use this sauna and jump in a hole in the ice and then go warm up," says Stencavage.

"You know, they are into the experience, the ritual, the tradition which goes back a couple of millennia. Those people are traditional sauna people and there's no way we're going to talk them into an infrared room."

On the other hand, Stencavage says he encounters the customers who have heard about saunas through Oprah or Dr. Oz, and these are the customers who don't necessarily care about the traditional sauna ritual but who care about health and wellness.

"They want an affordable and efficient way to really get a better healthy response from their efforts."

Location Matters

The customer's financial position plays a large role in the sauna market, as it does with pools and spas. But a great deal depends on the locality of the retailer, as well. Just ask Reuben Chudy, owner of Pacific Spas & Sauna in Los Angeles, a 32-year spa retail veteran who has been selling saunas for the past 15 years.

He once found comparable markets in his high-end and middle-class customers, but since the recession and its major effect on California, half of that base is nearly gone.

"The affluent [Hollywood] community is still buying product, although they've lessoned somewhat. The middle class used to be a big market, and that's what's dropped off," says Chudy, making infrared saunas a hard sell.

"I think the built-in market is the better of the two markets and that's where our specialty lies," notes Chudy. "The interest in [custom saunas] is still fairly big, although it has gotten a little bit more competitive because people are shopping around more. People are trying to negotiate a little more, trying to get more value for their buck."

Chudy now only has two retail stores, down from the five he owned at his peak, a trend he's seeing more and more in the area.

"Many of my competitors that had multi-store chains have been closing their smaller and less productive stores. And the mom-and-pop shops that just had one store? Most of them are out of business now."

Across the country on the East Coast, it's a different climate, and Stencavage says because more hot tub dealers are looking to add another product category, saunas have been getting a lot of exposure in the area.

"I think by just that alone, the consumers are seeing and getting more exposure to the product and the health and wellness benefits of it," says Stencavage. "So if you take the 600-dealership network of Watkins dealers and if only 1/3 take on a sauna line because they've heard from other dealers that this is a great product category, then it's going to help grow the category just by virtue of more exposure in these showrooms.

Back To The Future

The attitude toward future sauna sales, much like that of hot tubs, is a mixed bag. Retailers want to remain positive, and for the most part are, but they still keep things in perspective.

Coburn says his 2009 sauna sales stayed flat, and he only saw a decrease in hot tub sales. "But I'm an optimist," he says, adding that he thinks 2010 will bring an increase in sauna sales.

"I don't think it's going to be huge and I don't think it's going to be really that exciting either because we are coming off a horrible year. I think there's nowhere to go but up, but it's going to be a very slow crawl."

Chudy agrees and is quick to point out that even if hot tub retailers are in need of extra revenue, adding saunas to the product lineup may not be the best move at the moment.

"I think saunas are going to hold and come back," says Chudy, "but I'd say for right now do not get into the [sauna] industry if you are not already. And if you are, just hold fast and give good service and you know, try to hang in there until the economy turns back around. It will.

"This is the third recession I've been through. The first two were nowhere near as bad as this one, but eventually the economy comes back and people start spending again. And if you offer a good product and good service, you are still going to be around to do it then."

Comments or thoughts on this article?Please e-mail [email protected].

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