Beauty Launchpad
Stop, Thief!
Diversion is raining down on the beauty industry like the mother of all storms.
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By Jeryl E. Spear
Putting an end to diversion is about as likely as plugging a leaky dike with your baby finger; it ain’t gonna happen. This gray-market industry has grown from just bits and pieces of product lines appearing on drugstore shelves to a robust, billion-dollar business with whole store aisles now being devoted to complete lines of professional beauty products. Once blamed on sinister salon owners and distributors who delivered pro beauty goods to stores in the cloak of darkness, “some business circles are now quietly referring to diversion simply as ‘multichannel distribution,’” says Stefany Reed, senior vice president of marketing and salon development for Profound Beauty. But whether diversion is given a nefarious spin or referred to by its more respectable moniker, Reed relates, “for many salons, it’s a business disaster that has changed their retail landscapes…probably forever.”
“How bad is diversion hurting the salon business? Nobody knows for sure,” says Eric Fisher, whose Eric Fisher Salons and Academy in the Kansas City area produce a collective $1 million in annual retail sales, with a big emphasis on Aquage, a company that fights diversion tooth and nail. “Our clients go to the grocery store where they can buy many professional brands. Why would they make a special trip to a salon when the products—which have probably already been recommended by their hairstylists—are right there? It’s a much more convenient setup for them: one-stop shopping.”
“We’ve introduced new invisible double-coding and confidential tracking technologies on all of our products. And if diversion occurs, our policy is to immediately terminate the offending distributors or salons.” Ofer Tal, founder of Moroccanoil
“Diversion corrupts our synergy and diminishes our capacity to earn. I, as a stylist, salon owner and manufacturer, am incensed from all perspectives.” Michael O’Rourke, founder and chairman of Sexy Hair
Photo: Courtesy of Josh Band
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Comments
Most of the diversion seems to be coming from the brands that are no longer in-touch with the salons who gave them their precious notoriety. The best way to get their attention is to STOP PUTTING THEIR PRODUCTS IN YOUR SALON! It's an easy decision really... support brands that will support you and everyone wins!
How To Stop Diversion Dead In Its Tracks ! Its simple start your own exclusive salon product line. Create it with your own formulas and packaging like I've done 30 years ago when I saw this coming down the track. It’s a bit more costly but well worth the time and expense. That's one way to stop diversion, is to order "Private Label" products with your name. Many private label products are every bit as good as large well known brands and some items in the mix are even better. . For specialty styling products it’s more affordable to go through a private label company. They will use your logo and package design or help you create one. There are many private label company for example Aware and Liquid Tec here in California. And best of all no one will ever see your "exclusive salon brand" in any retail outlet or salon around the corner from you ever at any price! Large Brand companies can not stop diversion; they can only slow it down at best. And think about it, why the hell should you pay for and stock brands that are sold in ever other beauty salon unless your running a Beauty Supply Store posing as a salon with two chairs tucked away in the back. We all know it’s simply their way to buy salon only brands and sell them at a deep discount__ which hurts your retail sales ;-( If you must stock popular and highly advertise brands then be very selective, don't carry their entire line. Cherry pick them__ only stock the best sellers and offer them at a discount encourage sells. And price your exclusive salon products at a higher price point. That's an option and smart retailing. Stopping diversion is that easy. George Caroll Founder / Hair Research X Science of Healthy Hair Studio Style Salon Toulca Lake Ca.