Introduction
Global Spa Industry is growing fast and reached the level of $94 billion, which is 58% growth from 2007, while more than 34,000 spas were built since then to achieve the level of 105,000 (McGroarty, 2015). The growth of wellness tourism was even more overwhelming, with a 12.7% growth in 2014 alone and the overall market size of $494 billion (ibid). Others estimate suggest that growing middles class and increasing attention of consumer towards wellness and travel made the industry worth more than $3.4 trillion as for 2014, and emerging markets are growing faster than developed (Reaney, 2014). Brown (2015) suggest there is no the exact definition of what is “spa”, however it usually includes baths, body procedures, massages, and other mental and body treatments that makes people relaxed and makes them feel refreshed. With a growing emphasis on differentiation among the spa services, the debate over the high-tech vs. high touch approaches as the part of the differentiation strategy for spa establishment becomes prominent among industry experts (Ellis, 2014; Fenard, 2016).
This essay will first critically analyse the issue of using high-tech or high-touch approaches, particularly in the resort and spa industry, to provide the background for arguments and suggestions about the topic of using “High-tech vs. high touch” in resort and spa industry of Russia. It is argued that Western services tend to promote the high-tech paradigm, given higher costs of labour and greater emphasis on research and development, while Eastern services use high-touch and low-tech approach because of the cultural traditions and a greater focus on personal communication (Thakur, 1998). Russia has been chosen because of it has the traits of both Western and Eastern society (Chepurina, 2011). For example, while having demographics trends and a major part of cultural norms similar to Western Europeans, Russia has a low level of individualism and high level of power distance similar to Eastern societies (Fey and Denison, 2003).
Findings and Analysis
Concept of high tech vs. high touch
The term of high tech vs. high touch was first developed by John Naisbitt, as he noted that new technologies should be accompanied by “preserving humanness” while good services should reject the implementation of technologies that encroach it (Naisbitt and Philips, 2001). However, there is a permanent debate over what should be emphasised, depending on the culture, market, marketing mix and value the service offers (Lusch and Vargo, 2014). The issue is evident for any type of service, including spa, because it is generally defined as the act of helping or doing the work for someone else, mostly by other people (van‘t Hooft, 2006; Blasingame, 2008). Baker and Hart (2008) notice that finding an optimal balance between the technology and human-related aspects now become the crucial part of the marketing strategy of any service company and one of the most important determinants of overall marketing mix proposition. Meanwhile, Solomon (2012) notices that there is no actually any debate surrounding the high-tech vs. high-touch service industry because improving high-touch with the customer via better implementation of technologies, is the only way to increase customer satisfaction. However, Benckendorff et al. (2005) suggest that in the case of the hospitality industry, there is indeed the high-touch vs. high-tech dichotomy, as different services offer different value proposition. The question is about the demands of the customers, the experience and perception of technology and technology awareness (Benckendorff et al., 2005).
Peculiarities of Russian Market
Hospitality and health services are prone to a number of external environmental influences, affecting both demand and supply for certain services (Lee and Spisto, 2007). It is thus important to review briefly the major influences in the case of Russia. Generally, Russian spa industry can be regarded as underdeveloped and with a high potential despite the major economic problems the country experiences. The industry has benefited from the growth of the number of upscale hotels developed in the 2000s and particularly prior to 2014 Olympics Games in Sochi and upcoming 2018 FIFA World games, in addition to the relaxation of regulation related to spa services (Astey, 2013; Andrews, 2014). Growing number of people are interested in spa services while most of the services promote “western” approach with standardised procedures that are based on the implementation of latest equipment. On the other hand, Russian market has a strong market of spa-related procedures as a part of the market of wellbeing services based on Eastern alternative medicine, that flourished in the country in the 1990s (Euromonitor, 2015). Russian spa services are mostly not related with the hospitality industry and work independently of hotels and tourism attractions though luxury spa procedures are offered to the guests of upscale hotels (ibid). Currently, the ruble depreciation has decreased the value of the wealth of Russian almost twofold, decreasing the consumption of spa and foreign travel related services (Krasota Pro, 2015). On the other hand, this also means the boost of internal tourism, higher demand for relaxation services and inflow of foreign tourists (ibid).
Spa and high tech vs. high touch
Mandel (2009) argues that spa services are now regarded as the part of the holistic medicine, which “promotes overall body wellness”, as the term “wellness” now becomes a crucial part of the lifestyle for western societies. Meanwhile, if considering the high-tech/high-touch dichotomy in medicine, most of the researchers argue that opposing “modernity against romanticism or machines against hands and heart” is an obsolete approach, as implementation of high-tech help to improve overall level of service and save people’s lives (Timmermans, 1996; Rozzini et al., 2004). On the other hand, spa services are not about saving a life but about improving wellbeing and state of mind of clients, here, the warm approach is welcomed (Solomon, 2012). Here, an important fact is that Russian customers are often frustrated by the service quality of wellbeing services, and warm and personalized approach are regarded as the major determinant, even if there is a lack of equipment or promotion of certain service or the prices are high (Rynarzewska, 2015). For example, Rutherford and O'Fallon (2007) argue that the importance of technologies in spa-related activities should be downplayed, because the focus on not only the body improvement but on the overall “well-being and healthy mind and body maintenance”, requiring solely high-touch approach.
Penaloza (2011) notice that modern spa culture is a “compelling fusion of ancient traditions and modern mechanical wonders” and the issue of is not about what is better in case of luxury spa service, high-touch or high-tech, but is about the positioning of spa establishment that resonate to the requirements of certain customer segments. This conclusion resonates with the reports of Euromonitor (2015) on the preferences of Russian customers. Smith and Puczko (2009) notice that health and wellness tourism now has a spectrum of sectors, starting with holistic and finishing with medical surgical approaches, as the following Figure 1 shows. This is particularly important in the view of the recent relaxation of Russians laws that finally admitted that spa services as not medicine, but wellbeing services.
Figure 1. Spectrum of well-being/health tourism, according to Smith and Puczko (2009).
According to this division, the holistic services require high-touch approach, often at the cost of technological innovations, as the part of the overall proposition; while medical approach needs an intensive implementation of technologies though people are also crucial there (Smith and Puczko, 2009). Spas, being the part of the wellness services, require both human approach and implementation of latest technologies to provide the highest customers satisfaction, according to Smith and Puczko (2009). Because of this, there is growing evidence that wellness tourism and services will not merge with medicine and biomedicine in particular because of a significant depersonalization and loss of high-touch with clients, crucial for wellness services (Botterill et al., 2013). In the view of this, Ordanini and Parasuraman (2010) note that the issue is not in the decision over the ‘high-touch’ vs. ‘high-tech’, it is the decision over the marketing mix and positioning, as luxury and upscale hotels and services offer both best ‘high-touch’ (via higher level of personalized services) and best ‘high-tech’ (to improve customer satisfaction via latest technologies), while mid-range services focus on creativity and innovation to offer great service for lower prices.
Meanwhile, Cohen and Bodeker (2008) suggest that instead of growing differences between Western and Eastern approaches to healing, Eastern traditions together with skilled therapists are migrating to The West, merging the Eastern high-touch and Western high-tech traditions. The similar process of commercialization and globalisation has already occurred in the case of yoga traditions in recent decades used as the part of differentiation strategy for Western wellbeing service companies (Cohen and Bodeker, 2008). Differentiation already become the key for Western spa markets since the 2000s, as the range of the services offered in the West became wider than ever, starting with detoxication or weight loss and finishing with sexual or fertility issues or ethnic traditions, such as Korean scrubs or Philippine Hilot (Cohen and Bodeker, 2008). Within a concept of the division of “Western high-tech” approach based on the implementation of equipment and techniques and “Eastern high touch” approach, there is an evident defect, as stems from the suggestions of Camillo (2015). It states that Eastern high touch approach leads to higher personalization and thus better customer experience, however, rituals does not always eliminate the lack of consistency, which may actually lead to decreased customer satisfaction despite the very personalized approach. The individual human approach in personnel management also means greater demand for high-quality specialists often “imported” from abroad, however, this might be challenging as Russian salaries became very uncompetitive because of the recent ruble depreciation. Another challenge is the lack of consistency between the spa service agents in different parts of the world, as even the consistent services that are based on well-developed frameworks does not always reflect the differences between cultures when it comes to etiquette and rituals occurred inside the spa establishment (Camillo, 2015). This might become another source of service failure. It is evident that within the comprehensive non-ethnic-specific spa procedures, equipment and techniques are a crucial part of the overall service mix, hence, modern spa establishment cannot rely solely on high-touch approach (Johnson, 2015).
Koncul (2011) notices the gradual but huge change in the perception of health, with the rise of the concept of wellness, as spa and health treatments, occupational health therapy, and, massages are demanded as the crucial services required for maintaining health, especially during vacations. This process started in the 1980s, as resort operators found out spas as the way to increase their attractiveness and revenues (Monteson and Singer, 2004). At that moment, most of the spas were located in the luxury hotels and upscale resort, however, spa has later been democratized both due to appeal of luxury consumption among middle class and decreased costs associated with this establishment, thanks to higher economies of scales globally and new technologies (Madanoglu and Brezina, 2008). This process is mirrored in Russia, however, with a delay of about a decade (Euromonitor, 2015). The high-tech emphasis at the cost of high-touch is inevitable for democratized services, often offered at hotels and resorts as the way to drive sales (Madanoglu and Brezina, 2008). Halstead and Richards (2014) suggest that in the case of democratized services, improved self-service technologies can actually enhance the customer experience while customers would not lose the feel of special treatment. On the other hand, Foster and Mandelbaum (2005) argue that despite growing democratization of the services thanks to improved technologies and business process in spa services, the core of the spa treatments is the demand of the customers in a more personalized, human-attention approach during their stay at resort or hotel, therefore spa procedures became crucial for hospitality industry because of the requirement to move from “high tech” to “high touch”. Jeanes et al. (2012) notice that spa services, among such services with hairdressing or sex-related services, will always be notably high-touch, despite the growth of the importance of high tech.
However, spa and resort services, despite being high-touch services, do benefit from greater analysis of customer data and its usage in finding the customers’ needs and desires (Piccoli, 2008). Despite the possible debates, the sales and internal sides of the services do benefits from the higher emphasis of high-tech, increasing the number of customers want to book services using apps or online and not using telephone or face-to-face interaction (Ahearne et al., 2008). The spa industry has benefited from the rise of the Internet thanks to increased awareness of customers about this service, growing opportunities to promote the services via online ads and well-developed websites, in addition to improved booking procedures (Madanoglu and Brezina, 2008). This is particularly important given the high technical savviness of Russian spa consumers. However, employee skills are crucial in the transformation of high-tech booking and enterprise system support services into warm and human oriented approach (Ramasubbu et al., 2008). Baker and Hart (2008) suggest an interesting trend when service companies implemented the technology-based Customer Relationship Management and often received mixed resulted because of the lack of understanding of necessary high-tech/high-touch balance in their particular industry. Meanwhile, Camillo (2015) suggest that currently spa and hospitality service providers change their marketing strategies because of the rising importance of Internet and social media as the method to promote themselves. Online reviews help customers to choose spa services when travelling or searching for the service nearby. With the growing emphasis in wearable gadgets in wellness industry, apps and online access for travelers and services users, emerging technologies are increasingly influencing spa/wellness business; Plessier (2014) suggest this is “not a paradoxit’s the future.”
Conclusion
Personally, I believe that high-touch approach is the essence of spa services and should be emphasized specifically, though equipment and techniques should support the human oriented and warm approach to serving people. The essay has clearly demonstrated that spa customers, and Russian customers in particular value the personalised approach, while the service itself is based on the service excellence that is conveyed via people who make massage, body procedures, manicure and help clients to take bath procedures. Unless these people would be changed by robots without losing the quality of services and “warm” approach (which, in my opinion is impossible in upcoming decades) spa services should definitely emphasize high-touch approach.
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