Shopping and a Mini-Movie

Today I attended a fun event at the Tribeca Grand Hotel, where I was able to speak to my fellow bloggers & beauty editors about Diversion. We invited our attendees to watch the premiere of a new investigative video about the risks associated with purchasing salon products from unauthorized retailers. I truly enjoyed sharing the evening with them and will be sharing the links of our attendees who pledged to join us in our anti-diversion efforts.

Please watch the Investigative Video which was featured at the event:

Please copy the embed code and post on your blog or Facebook page to help us spread the word.

Thank you to all the bloggers and beauty editors who joined us and pledged to help us spread the word!

Check out the picture gallery from the event, I will be adding pictures for the next couple of days.

Is It OK to Purchase Professional Products Online?

I’ve received some comments asking me about online purchases of professional products. With the exception of www.kerastase-usa.com, all other websites are not authorized to sell professional products and we cannot guarantee the quality or legitimacy of professional products purchased from them.
In the instance of www.Kerastase-usa.com, Kerastase has developed a partnership site that allows consumers to buy online while supporting their salon. This provides a quality service for consumers who may travel a lot or who may want to purchase between visits. This practice is completely normal for luxury brands who have limited distribution.

Other than www.kerastase-usa.com, no other websites are authorized to sell professional products. There are sites that mask themselves as salon websites, have fake anti-diversion statements or claim they obtained products from a manufacturer. Please beware of these websites. Clients might be tempted to risk the purchase from eBay.com, for example, because they believe that they are getting a better price. In instances like this , it is especially important to remember the 4 Cs (cost, counterfeit, contaminated & crime) which are the dangers of buying diverted products both online and offline.

I urge you to visit a salon near you, or www.kerastase-usa.com to purchase your professional products.

Your Questions Answered

Dear Esteemed Readers,

Thank you for your comments and your questions. Here are the answers to some of the questions I have received lately:

1. Why doesn’t L'Oréal buy out its products from the Diverters?
If L’Oreal were to purchase all of the diverted products from unauthorized retailers, we would actually be fuelling the demand for products in that location, funding more demand and more purchases, and consequently, drive further diversion.

2. What happens when I report a Diverter?
When you report a diverter through an email to nodivert@aol.com or by calling the Diversion Hotline (1-800 503.3997), our strategy is to log the location and send an investigator to purchase samples and then use our coding technology to track the product. We can then determine if the product is counterfeit, and if not, who was responsible for diverting it to that location. Through our national buy-back program we have been able to cut down over $30 million dollars in product sales by cutting off diverters.

3. Why doesn’t L'Oréal take legal action?
We have. Please read my Quality King Story post from August 19th. We have filed and appeal and will keep you posted on our status.


Have more questions? Please submit them as comments and I will do my best to address them.

Thanks!
David

Good News!

I received an email this week from one of our valued customers, who was very surprised to discover that a major US mass retailer has taken it upon themselves to label professional products by saying that "this product is intended for sale" by them and if found at other outlets they should call an advice line. They are printing this copy on a supposed security label.

I think this is a good indication that we are starting to win the battle, because when a major retailer finds it necessary to legitimize the sale of a brand is us a sure sign that our campaign to keep professional products in the hands of stylists is starting to work.

Hopefully we will have more good news soon.

What the Grey Market Means

After we launched our aggressive anti-diversion campaign, I continue to receive a lot of comments and questions from frustrated salon owners who still see our products on unauthorized shelves. This is not going to be a battle that we win overnight and my goal is to educate the consumer about the risks of purchasing products from outside of a professional salon in what we call "the grey market." Diversion is not always illegal, but affects the general economy while potentially compromising the authenticity of the product. Other industries from champagne to pharmaceuticals are battling similar issues as we are with our diverted salon products. Grey market goods can range from "designer" luxury bags sold on eBay to premium denim copies sold on city streets to designer fragrances sold at your local drugstore. According to Wikipedia, the grey market is defined as the following:

Grey-market goods are not generally illegal. Instead, they are sold outside normal distribution channels by companies which may have no relationship with the producer of the goods. Frequently this form of parallel import occurs when the price of an item is significantly higher in one country than another. This situation commonly occurs with cigarettes and with electronic equipment such as cameras. Entrepreneurs buy the product where it is available cheaply, often at retail but sometimes at wholesale, and import it legally to the target market. They then sell it at a price high enough to provide a profit but under the normal market price.

To clarify how our salon products get into the wrong hands, take the following example. A salon with a professional only contract will order professional products and after six months, they are approached by a grey market agent who in many cases may represent a distributor who sells to mass retailers. These distributors may carry a variety of goods such as DVDs, cigarettes, fragrances and other items they can mark up to make a profit. These agents purchase excess inventory from a small salon at a cost that allows everyone to make a profit. This scenario is a breach of contract and as the business becomes profitable to the diverter and the salon owner, things can sometimes become shady. In an attempt to try to cover their tracks, so they cannot be traced through our product codes, they may change the packaging and/or formula and as we have proven, the mark up becomes greater for the consumer. Products can be diluted, counterfeited or full of bacteria. Because mass retailers make a profit on these goods, the temptation is high to resell. By taking control of our distribution process, one of our objectives is to be able to monitor and track these sales to salons and to ensure that salons are only ordering for their legitimate businesses.

Why Pay More?

While it may surprise you, you are probably at a price disadvantage when you purchase salon products from retailers such as food, drug and other mass retailers. In fact, through our price checks we have found that salon products purchased at mass retailers are AT LEAST 10% higher than when bought at your local salon or spa.

ABC Phoenix recently reported on diversion. The investigative article explains what diversion is, that it ultimately can rip off consumers and that products may be contaminated. Consumers need to know that non-authorized stores can charge anywhere from 50% up to $5. For example, ABC15 found Redken Color Extend Shampoo for $15.69 at a popular supermarket vs. $11.50 at the salon across the street. Matrix's Sleek.look Shampoo was found for $17.99 at a drug store, vs. $13.95 at a salon.

Click here to read the full article.

If you are a salon professional, I urge you to educate your clients about your commitment over mass retailers to provide fair pricing and guaranteed products.

Please share this with your friends and family so they know the facts.