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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8 comments postedMost 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.
If the chairman of Sexy Hair is so concerned about diversion then why is this weeks special at "Ulta"
buy two of any Sexy Hair product and get two FREE!
That would mean the retail customer is getting the product for my wholesale salon cost. So easy for anyone to purchase at this deep discount that Sexy Hair allows and then the customer can resell on Ebay or anywhere on the internet at a slightly higher cost.
Why is it that "Ulta" is now constantly giving away these deals on Sexy Hair, Redken, Chi...etc?
I can tell you why. It's because these companies are giving Ulta a different deal than the individual salons. It's all about the money.
This industry does not have a level playing field.
The better deals are given to these large box salon/stores and the individual salons are not given the same opportunities. OPI makes a color just for ULTA!! Chi has flat irons on deal, just at Ulta. My Chi distributor does not even stock the deals Ulta has. So the manufacturers themselves are "diverting" in my opinion. Doing everything they can to move product and not make it look like they are doing anything wrong.
This problem is only going to get worse, as long as there's money to be made.Think about it- the big companies have figured out how to play both ends- clients don't buy from us because it's cheaper at the drug store. Either way, money is still going to the manufacturer! I have seriously considered ditching product all together in my salon. Drug stores used to get pieces of lines- now they're on palates like everything else! I see it in Marshall's, wherever I go. I believe private label also will become more popular. We're just caught in the middle doing the explaining & losing the sale.I'm going to research private label. Instead of a tea party it will be a shampoo revolt.
Very nice comments but we just found out that diversion has taken a u-turn this month. I work at the Paul Mitchell focus salon and our sales rep gave us the latest salon today magazine. The article is called "Diversion Aversion" and it is ground breaking. The first new real diversion article and how to end it for good. They also have it up on their website http://www.salontoday.com/ArticleLanding/tabid/130/Default.aspx?tid=1&Co...
I love the new finding from Mike Oneill at hair studio 322 on the upc codes and tampering. At first I thought I heard of this before, whats new here. But it turns out this is the same stylist that was fighting diversion on tampering a few years back. Our rep said it's about time we have a chance to end diversion. She said Oneill has been pushing the diversion problems with all the beauty product manufactures very hard these past 3 years. And ended up at the CVS case which now put the law on our side. She told us that the ground work is now in place for all our products to be removed from the stores shelves.
What upsets me is why didn't the manufactures take these steps years ago, it takes a salon owner from pennsylvania to lead the pack. It just goes to show you can't mess with us stylists.
All I can really say is thank you Mike for all your hard work. And we would love to hear what you are doing next!
Lisa
That is the best news story on salon product diversion in years. Sounds like that salon owner is fighting for everyone. Way to go! Cheers to him for making all products safer. We need the manufactures to stand behind him and all of us to end diversion!!
I would like to hear their comments on the news article. And even better what is mike doing next? I want to help finish this dangerous public issue. Get the China copied products out of all the food and drug stores. Great job!
The answer to diversion is now below. Private label is where diversion all begins. Read salon todays article on diversion. This is the real end.
http://www.salontoday.com/ArticleLanding/tabid/130/Default.aspx?tid=1&Co...