Consumer Ignorance: The Demise of the Beauty Industry's Retail

Diversion: What industry professionals are screaming about and consumers haven’t even heard about

What’s the biggest issue surrounding product diversion?

Is it that consumers are purchasing outdated, bacteria-latent products, or most often they are being overcharged for hair care products when purchased outside of the salon? Is it that the sale of these products in mass retail stores, drug stores and other discount outlets is hindering the retail aspect of the salon industry?

The aforementioned are all prevalent; however, the most significant issue surrounding product diversion is the fact that most consumers have absolutely no idea what it even is.

Ask your clients, or ask your friends, and you will here the same response every time, “I’ve never even heard of diversion.”

Diversion, simply put, is when products are diverted from the shelves of your local salon and sold in unauthorized outlets.

The grey area of this issue is that it is not illegal for these products to be sold in retail stores, drug stores, grocery stores and discount stores; however, contracts are broken and these products never come straight from the manufacturer. Meaning, every product you purchase anywhere other than your salon is absolutely not guaranteed- no safety guarantees, no guarantee that it’s more affordable, and certainly no guarantee that it is even the real product.

“It is important that as salon owners we make the public aware of what is going on in this industry. The public, and even those that frequent salons and spas, are tempted by the sale of salon-only products in supermarkets and drug stores,” said Koebler, owner of Secrets of Hairdesign and Day Spa (Secrets) in Butler, Pa. “What these individuals do not realize is that the sale of these products outside of a salon is part of a ‘grey market.’ These products are often old, outdated or counterfeit.”

A well-known fact is that the number one reason salon-goers purchase professional hair care products outside of a professional salon is to “save money.” Ironically, the products on the shelves of your local retailer, grocery, or drug stores are most often marked up compared to the products you will find at your local salon.

In fact, after comparing the current price list of Secrets in-salon products to two drug store chains* and one major retail store* we found the following:

Paul Mitchell® Super Sculpt (8.5 oz):
o In-Salon Price: $7.78
o Drug Store Price: $8.49

Paul Mitchell® Fast Drying Sculpting (16.9):
o In-Salon Price: $16.38
o Drug Store Price: $17.99

Joico® Moisture Recovery Conditioner:
o In-Salon Price: $12.56
o Drug Store Price: $13.95

Sexy Hair® Spray & Play (travel size):
o In-Salon Price: $4.99
o Drug Store Price: $6.50

Sexy Hair® Spray & Play Harder:
o In-Salon Price: $15.50
o Retail Store Price: $16.99

Paul Mitchell® Sculpting Foam:
o In-Salon Price: $11.18
o Drug Store Price: $10.99

Sexy Hair® Root Pump:
o In-Salon Price: $14.96
o Retail Store Price: $16.99

Biolage® Smoothing Conditioner:
o In-Salon Price: $14.96
o Drug Store Price: $18.00

Paul Mitchell® Color Protect Daily Conditioner:
o In-Salon Price: $13.98
o Drug Store Price: $12.99

Biolage® Gelee:
o In-Salon Price: $14.58
o Drug Store Price: $16.50

It is evident that consumers are not saving money by purchasing products outside of the salon, but they are risking the quality of their products to save less than a dollar in the rare instances that they can find a “better deal.”

FOX News conducted independent lab tests on products purchased from various mass retailers and grocery stores, and according to the Paul Mitchell® Web site, the test results showed that there was “enough bacteria that would make the user sick enough to require medical attention.”

Paul Mitchell® is a well-known professional hair care line that actively fights against diversion in the hair care industry. According to their Product Control Web page, “The products found in grocery stores, drug stores or on the internet are either diverted, stolen, old, tampered with or counterfeit. The only way to guarantee that professional salon product is genuine is to buy it at a professional hair salon.”

If this were any other product, consumers would be extremely hesitant to purchase any item that had been stolen, was outdated or counterfeit, yet consumers continue to purchase their products outside of the salon.

Would you purchase lunch meat that you knew had landed in the store by way of diversion? Would you purchase vitamins knowing they were most likely outdated, having passed through an unknown, unauthorized middleman before ending up in the store?

Bottom line: The purchasing of hair care products outside of the salon is extremely hazardous…to the consumer and the industry as a whole. This “grey market” is hindering the integrity of the industry, which in turn, will significantly affect every salon and stylist.

As stylists, you must educate your clients about diversion. Do not hesitate to bring it up when your client is sitting in your chair. Your clients are the consumers of these products and they deserve to know the whole story.

Consumers: You must be aware of the illegitimate products you are bringing into your home, the risks you are taking with these purchases, and the affect your purchases are having on an entire industry.




* Retail prices found at www.riteaid.com, www.walgreens.com, www.target.com and compared to salon, www.secretsofhairdesign.com on July 19, 2009.