First of all, I wanted to say thank you to all that have taken to time to write comments to my blog posts. I believe in the importance of listening to our salon professionals and clients and strongly believe that with your feedback we can make L'Oreal a better company.
I want to welcome any ideas that you may have regarding initiatives that you would like to see L'Oreal explore for 2009. Whether it's about how to fight & spread the word about Diversion, new products that you would like to see in the market, or other opportunities you would like L'Oreal to participate on, please click on the Comments link below.
Cheers!
David
Friday, July 18, 2008
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14 comments:
Hi,
I am a salon owner in the suburbs of Philadelphia for over 30 years and have always done what I can to fight diversion. I seriously have about given up and I have serious doubts as to what can really be done.
My question to you concerned the online sales of your products. In my area, sites such as cosmeticmall.com, aveyou.com and folica.com all in New Jersey sell most of your items below retail.
Their phone numbers and addresses are on the site, they do nothing to hide their identity, so why is there nothing you can do? Can't products they sell be tracked back to the distributor? I find it difficult to believe that any salon or salons are supplying these large sellers, as well as just about every Eckerd and Rite Aid Pharmacy in this area. What's the deal? I don't see much Aveda diverted, maybe you need to talk to them.
Joe
As a previous owner of a Distribution company that sold to Target, Wal-Mart and other mass-retailers I think back to the Vendor Routing Guides and the requirements of placing product in the retailers. There were Facing Slotting Fees, Costs in the thousands to be placed in the Sunday newspaper and store flyers along with the RF or EDI Requirements that a large distribution company would need to do in order to just do business with a retailer like Target. When I see various MATRIX products in a SUNDAY FLYER from Target, I just laugh at the crap diversion letter your company sent to me and the material in my shipments. Either your company, another affiliated company or one of your canada dist are shipping to TARGET and COSTCO. The amount of costs related to just placing product in these retailers along with the 100% return policy that these retailers require would be very damaging to any two bit distributor. Again, I sold my video distribution company that dealt directly with these retailers. I know what the costs are. So I think it's time, just come clean, repackage some of the higher end product for our salons and let's all move forward. The mass marketplace is a very inviting environment for quick cash especially in the current economic situation the professional salon industry is going thru. Gross profits are going to go down unless you just step up and say - YES - we put the Biolage Conditioning Balm in Target... and we're sorry.
Gee Jim,
In my Sunday papers this week, I saw very little diverted merchandise and none from L'Oreal.
In the Target flyer, I saw American Crew, Tigi Catwalk and BioSilk. No Biolage or Matrix. No Redken or Pureology. In my KMart flyer no professional products of any kind. Ditto CVS and Walgreen.
Let's move forward on those facts! It's easy to be cynical and angry. But maybe, just maybe, things are getting better.
Carrie
Thank you for your response Joe, I appreciate your long-term commitment. Online diversion is a serious battle that we continue to address. One of the principal purposes of this blog is to be a resource for clients to learn about diversion so that they can make educated decisions and not purchase from these online unauthorized retailers. Taking one of the examples of the websites you listed – Folica.com the products that they have available show the same characteristics of the diverted products from other unauthorized retailers. For Matrix Biolage, for example, the selection includes old packaging and discontinued items.
Consumers deserve to take advantage of our Quality Guarantee Policy which is only available for purchases from salons, spas and L’Oreal Professional Salon Product Websites which at this time only includes http://www.kerastase-usa.com/
We do have policies in place to purchase sample products for tracking purposes and we continue to cut salons and distributors who break their anti-diversion agreements. We hope that soon the result from our work will be more and more visible.
I have been using Redken products since 1972. The only problem that I have ever had was with shampoo that I purchased in a salon. Compared to what the shampoo was usually like (density), I would guess that it was watered-down at a ratio of 1 part shampoo to 3 parts (hopefully) of water. It was in the customary Redken bottle.
I recently started buying a Redken styling product through a non-salon source because I have no other choice: my stylist's employer has stopped carrying it, and no other salon reasonably nearby carries it. According to an e-mail response from Redken, it is still in the product line. What each salon contacted told me when searching for it was, basically, they don't sell enough of it to carry it, and they won't special order unless I buy a case.
How can national chains (drug, grocery, discounters, etc.) without inhouse salons manage to buy so much of your products without anyone being able to figure out what their sources are? And, if the products are fakes, why doesn't Redken, Matrix, etc. take legal action to keep the chains from advertising that they carry the brand's products? You have to admit, it does seem suspicious... (Is Ultra a legitimate source from your point of view?)
Lastly, I question the sweeping statements about pricing. We are in the Washington, DC area, and it seems that salons are more likely to price gouge than are the chain retailers. While several chains consistently charge $11.95 for a specific shampoo, if I buy it from my stylist's salon it's $13.95 (but, what the heck, I'm there anyway so it's convenient). When I've needed to pick some up between haircuts, more conveniently located salons have been selling the same size bottle of the same shampoo for $11.95 - 15.95! Go figure...
Hi David,
My comment is around how creative and responsive hair salons can be in a community. I'm a novelist, currently touring with hair stylists, making stops in hair salons. The book is titled, Hairdos of the Mildly Depressed.
We're giving a percentage of sales to the local salon's favorite mental health charity. I'd love to see more community businesses work in this way.
www.dougcrandell.com
Hi David!
I've been a salon owner for 23 years and I work behind the chair. In my area of NJ, I not only have a problem with diversion in the drug stores, supermarkets, etc (which I try to educate my clients of the pros and cons of buying from these locations) but I have a HUGE problem with L'Oreal diverting my clients. You see, David, in my area is a L'Oreal R&D and manufacturing facility which has a company store. They allow outsiders to come in and purchase products slightly above salon costs. So as a stylist, I employ all the sales tactics recommended by Redken and my clients trust me enough to rely on my expert advice to purchase the BEST for their hair. The only problem is they will purchase it at the L'Oreal store. If L'Oreal is truely commited to salons to stop diversion, they should also stop it themselves.
Jane,
Rest assured that when we do find the sources, we do cut them off. This year alone we have, I am pleased to say, terminated $32million worth of business that we found to be illegitimate. We can do this because of our new coding system which is a great tool that we have in the war against diversion. That said, there are 200,000 salons in the United States which will always be vulnerable.
As far your comments on price are concerned-our nationwide survey and ABC15 news found that the average price in unauthorized outlets to be significantly more than the average price in salons.
And, in a free market economy, you have to look at the average.
I would just like to point out that Amazon.com right this minute has Redken shampoos and conditioners priced at $10.36 for TWO bottles. That is just a few cents over $5 per bottle. You cannot touch that price in a salon. Amazon also sells the newly packaged Fresh Curls line which seems to contradict the statement about non-salon retailers selling old product. As a consumer, I am very confused on this matter.
Hey Mandy,
I went to Amazon to check out your pricing and I couldn't find 2 for $10. What I did find was several offers of two 10 OUNCE bottles for $22.50. They also said they might be out of stock, that I should place my order and see what happens. Sounds like the tightening of the noose David is talking about is beginning to kick in.
Hi Carrie,
At the time of my post, the Redken products were 2/$10. It sounds like you are not familiar with Amazon. Their prices fluctuate multiple times daily. So, it was not a case of "tightening of nooses" - just Amazon price fluctuation. Just as an FYI, you can add items to you Amazon cart and then check back daily for price drops. I have over 200 items in my cart and check in several times a day. It is amazing to see the price on a particular item change 7 or 8 times a day. It is all a matter of hitting it at the right time to be able to purchase at a reduced price. At the time of my post regarding the 2/$10 products, they were part of a sale promo. The Redken products, as well as a ton of other salon brands are often at deeply discounted prices on Amazon - amazingly low prices.
Carrie is correct on the pricing but frankly, if you are buying products in this way, you are taking a very serious risk regarding their authenticity and also supporting the real point-the grey market
David,
I never buy those items on Amazon. I was just making reference to the low price of the items and the fact that yet another HUGE retailer is selling the products. I buy my haircare products in the salon no matter what. With these "salon" products so widely available though, it does make you wonder if they really are fake products. I mean, how could every grocery store and mass merchant, wether online or brick and mortar, obtain fake salon products...and WHY would they. These aren't small corner stores. These are major retailers. Every retailer in my area sells many salon brands. It is hard to believe that some shady supplier is giving them all of this product. The items are always in stock and they cary multiple lines of each salon brand. It would seem that they would have to be supplied by the manufacturer in order to maintain stock. I am thinking of asking about it at Kmart, Target, Giant and Weis Markets. The store managers should be able to direct me to whomever places the orders for stock and if I have to go through corporate, so be it. It is worth a try. It's just a very confusing situation. If it is counterfeit product, it shouldn't be on the shelves and available to the consumer. It seems that Loreal should be able to contact each merchant and get something situated with them to stop selling the products if they are indeed fakes. I don't think any merchant as large as the ones involved would want to sell bogus products and have the potential for the consumer to come back on them and sue them or something for selling these products in mass quantities as the real thing, when they know they are not.
MandyS76,
Thank you for your follow-up comment. I’m glad that you buy your professional haircare products in the salon.
I wish it was as easy as you describe to identify the sources behind the diversion that is taking place. While the risk of counterfeit products that I have discussed is real, unfortunately, selling the products is not illegal and therefore we cannot take legal action against them. We can, however, take legal action against the distributors and salon owners diverting the product, since they have signed anti-diversion contracts with us. Pursuing legal action, though, is a long battle and one that we are still fighting (see my post on Quality King). In the mean time, unauthorized retailers will continue and pursue carrying professional products because there is a demand for them.
I can assure you that we do not sell to these unauthorized retailers. If you decide to pursue speaking to them, please share with me your findings. In articles that have been written about diversion, they never disclose their source.
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