How is diversion impacting our industry and what can we do?
Bob Peel, Jr.
President, Peel's Salon Services
President of Cosmetologists Chicago
General Manager, Moroccanoil
salons have over drugstores is the professional recommendation. Peel's has a 100-percent guarantee of any product, no matter how much has been used. If a client brought back a bottle to a drugstore that was 3/4-empty and said it didn't work, would they take it back? No. Play that card at the salon. We take an aggressive stance to get salon owners to purchase software that allows them to track retail purchases, and then develop loyalty programs, frequent purchase cards and rewards programs for clients-that way there's more value added for clients to buy from the salon as opposed to a drugstore. As a distributor, if someone places a phone order and we have not physically met these people, we won't ship the order until a sales rep meets with them. We have security coding that allows us to track the barcodes and see where products end up. We have annual visits with our top 500 customers, and check to make sure they can handle the kind of sales inventory they're purchasing. Because of everything we do, Peel's seldom shows up on anyone's list as a diversion problem.
Frank Gironda: Diversion is harmful to our industry but also to clients who purchase diverted products. They often pay more for diverted product than in a salon and they might not select the right products for their hair. If consumers buy the wrong product at the drugstore, they believe the product performs badly. That reflects on the entire brand or company, so, diversion is not good for the manufacturer either. Manufacturers must keep professional products professional. I encourage all manufacturers to learn and react to the impact diversion has at the street level, especially with hairdressers who are making the initial recommendation that builds their sales. As a salon owner, I know diversion is demoralizing to my staff. When clients say, "I don't need your shampoo, I just got some at the drugstore," it takes away hairdressers' desire to sell retail products. They stop recommending. That hurts the salon's overall profitability. The only ones to make money are diverters, and they should not be rewarded.
Zohar Paz: To fight diversion, salons must do their homework on the products they carry, educate their clients and support those manufacturers who are truly taking action. Only by working together can we help prevent diversion and protect the salon business. As a dedicated industry independent, the Moroccanoil brand has a special relationship with salons and this issue is of prime importance. We take great satisfaction in creating genuinely new kinds of high-performance products, our own trade secret, and making sure they stay in salons. Moroccanoil invests major resources to prevent and fight diversion, brand counterfeiting, as well as package design and logo infringement. We've also built protection into each product with a revolutionary technology that places more than a hundred invisible tracking codes on each bottle to prevent and track diversion on every level.
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