Have you ever heard a client say "oh, I actually buy my shampoo on Amazon. It's cheap and it's so nice that it just ships to me"? Ever wandered through Nordstrom Rack or Target and thought to yourself "why is Kerastase allowing their products to be sold this way"? If you ask me what the worst 4 letter word is in our industry, I'll tell you it's diversion.
Diversion is the word used to describe products originally sold to professional hair salons legally that greedy, selfish salon owners choose to sell out the back door. These products are sold to third party distributors who then place these products in major retail stores or through an online market place and sell them for profit. You may notice that often the product you see on the shelves looks slightly off colored or the packaging may appear in a format that you aren't used to. In the US more than half of diversion that hits our market comes from third party sources in Europe and Asia.
Think purchasing mislabeled products that haven't been approved by the FDA is bad enough? Think again. The way that these third party sources are able to make a profit on the products is by diluting the contents or swapping the contents out for a completely different product all together. Independent studies have shown over and over and over that diversion often contains traces of feces and other sewage. Suddenly having your slightly discounted haircare products shipped right to your door sounds less appealing, right?
There is also a theory that the diversion "boogeyman" doesn't really exist. Many industry professionals believe that major haircare lines sell expired or diluted products directly to drugstores, retail stores and online marketplaces to cash-in on the big profits themselves. While I think this is very possible and probably true in some cases, it's actually irrelevant and doesn't change the situation one bit. We have a choice here. We can stress about how and why it happens or we can just create a solution to the problem. I'm all about finding the solution, so let's just focus on that!
I truly believe it is our job as hairstylists to educate our clients on the dangers of diversion. I am an online shopping addict so I 100% relate to the temptation. Here are some quick tips that may help you to spark the conversation:
- If your client mentions she orders products through Amazon, let her know that Amazon isn't a retailer, it is a marketplace. Anybody can create an Amazon seller profile and sell whatever they'd like at anytime. Let your clients know to pay close attention to who exactly is shipping their product and to read the reviews. They'll notice that reviewers will complain over and over that the product isn't like what they purchase in salon or that the product did't work as well as expected.
- Don't be afraid to warn your client about the dangers of diversion. When I was behind the chair I would very sweetly tell my clients about the horror of diversion all the time. If a client said they purchased products online or in a grocery store I would simply say "Okay, I don't want to freak you out, but there have been recent busts all across the country where online and in-store retailers have been found to sell products laced with feces and sewage. They were found to have received product from third parties laced with contaminants. Haircare lines only sell directly to salons so we don't have to worry about it, but all other retailers do so you have to be really careful where you buy product these days". See what I did there! I didn't pressure them into buying from me. I educated them on the dangers of buying anywhere else. Good stuff, right?!?
- Be sure that your products are priced competitively. We are all trying to save a little money where we can so just be sure that your markup isn't over the top. I know it can be tempting to add on a couple of bucks here and there, but don't do it.
- Spread the word! I send out an email blast about diversion to my entire clientele annually. I send nearly the same piece every year and each and every time I get emails back from people who say they are shocked and will never buy anywhere other than the salon again. The power of sharing useful information via email is huge.
- I think every single hairstylist on the planet should have a rewards program in place. Clients should be rewarded every time they purchase retail with you and the payoff should be something really juicy. Think about what your clients would value the most and make it tangible. Don't start giving too much away for free, but you need to compete with Sephora and Ulta who have kick ass rewards programs already in place.
- Above all else, be confident, honest and educational. Never put on the heavy sales push to your clients, but always give an offer they can't refuse. If you let your clients know about the dangers of diversion, introduce them to your killer rewards system and consistently educate on the retail you have available, I promise you'll beat diversion sales every single time.
Retail is a crucial part of your business as a hairstylist and a vital source of income for salon owners. Retail sales improve retention, create quick cash flow and improve the results of your work behind the chair. If you haven't made overcoming diversion a priority in your business, add it to your 2016 to-do list, stat!
If you want to learn more about diversion, here are a few links you may find useful: