A bridge is slowly being built between the warring camps of hair salons and prestige retailers — and the professional and upscale brands they carry.
Bumble and bumble believes it has the answer to the pro hair care industry’s conundrum: how to enter retail distribution without alienating salons and damaging their core business. Growing business at salons, in fact, is the crux of the plan.
Beginning in the fall, Bumble’s professional hair care products will be merchandised in full regale at 10 Sephora stores nationwide, with half of the stores’ displays featuring interactive touch screens to educate consumers on the brand’s salon heritage, and video loops showcasing Bb’s fashion DNA backstage during fashion week. But in a twist, these displays will prominently list nearby Bb network salons where consumers can cash in a $20 gift card they will be awarded for purchasing two full-sized Bb items. The card can only be used toward hair services — not products.
That Sephora has agreed to promote another outlet where consumers can ultimately buy items it, too, is selling signals the creativity manufacturers and retailers need to survive since the 2008 financial meltdown.
Allan Mottus, a beauty industry consultant, said since January, when Sephora dropped former anchor salon brand, Frédéric Fekkai, as a result of its entering the mass market, the retailer has been looking for a new professional partner.
“I see this as a way for Sephora to compete with the competition, like Ulta. In a world where there are fewer shoppers, retailers and manufacturers are doing everything they can to convert them into customers.”
In a further sign that Sephora may be loosening its rein on the brands it carries, Living Proof, a prestige hair care brand designed to fight frizz, which launched exclusively in Sephora in February 2009, announced this week it has signed on with professional beauty distributor BSG. The deal looks to bring Living Proof into thousands of salons over the next year, with the possibility of tripling company sales in the first 12 months, said Rob Robillard, chief executive officer of Living Proof.
“Since we launched we have been getting tons of requests from distributors and salons and stylists about when we will make Living Proof available in salons. We had originally contemplated it as our primary target,” Robillard said.
Living Proof will be the first retail brand to be carried by BSG, the largest distributor in the U.S. A test this year in several select humidity-rich markets (Florida, Georgia) was so successful that plans to expand slowly were quickly replaced with going national in August. Robillard said Living Proof will be sold in 700 BSG distributor stores and represented for sale into salons by about 700 sales reps. Living Proof could realize retail sales of between $30 million and $50 million its first year in the salon sector, said industry sources familiar with the professional business.
So far, Sephora has been supportive of Living Proof’s plans, Robillard said.
Sephora would not comment on Living Proof’s entry into salons, but said its decision to carry Bb and allow the brand to drive customers to salons was twofold.
“[We wanted to introduce] Sephora clients who are new to the Bumble and bumble brand to further discover the product benefits through a salon service post-product purchase at Sephora. [We also wanted to fulfill] the desire by our clients for salon services in our store, which at this stage we are not able to do,” said Priya Venkatesh, Sephora’s vice president-divisional merchandise manager for skin care and hair care. The Bb. Shop at Sephora partnership also makes Bb the exclusive go-to salon network for all of Sephora’s in-store promotions, which will bring in Bb stylists and salon owners to perform hair services.
Bb’s president, Peter Lichtenthal, said Bb entering Sephora is more than “products on shelf. This is bringing down barriers,” referring to the taboo of a professional brand selling its products outside of a professional point of distribution. “No one was ever able to make a connection of being in prestige and supporting the primary channel of salons. No one was able to connect the dots.”
The retail test is meant to accomplish a number of things, Lichtenthal said, including measuring “how impactfully we can drive clients to network salons and make a meaningful, tangible difference in their business. One of the most important goals we had in developing the program with Sephora was to help bring countless new consumers to Bumble network salons in order to help them deal with the overriding challenge facing today’s salon industry: the quest for new clients.”
For the first half of 2010, the overall salon industry was still in a downtrend, with sales dipping in the low-single digits, according to Ryan Sieverson, vice president of sales for Bumble and bumble North America. But “it’s better than the previous six-month period,” he said. “The industry seems to be getting better. But we [Bumble] cannot predict business or run promotions that we can count on.” Bb executives said the brand maintained market share this past year with sales to salons down in the single digits, mirroring the industry.
The Sephora test follows Bb’s entry into Bloomingdale’s last year with a Bb. StylingBar, which provided the Estée Lauder Cos. Inc.-owned brand with invaluable retail data.
“We’ve learned everything, from product focus, to how to merchandise things so they are more interactive, to how to really engage a client, to what kinds of questions to ask so we really, quickly understand how someone wants to look. We even learned how to implement selling into the artistic experience to close a sale,” said Carla Iliescu, vice president, Learning and Education for Bb, explaining that a key challenge at salons has always been getting stylists to sell products.
But most important, the shop showed it drove new consumers to Bb’s uptown salon.
“We had an immediate increase of new clients at the uptown salon. In one month of being at Bloomingdale’s, there was a 17-point swing change in the number of new clients there,” Lichtenthal said. About 80 percent of sales at the Bloomingdale’s Bb. StylingBar are comprised of products sales.
Bb’s Sieverson said while the Sephora test has met with an “overwhelmingly positive” response, it was “not without its skeptics. To be sure, there is a certain air of ‘What does this mean?’ and ‘Is this an indication that Bumble will use their leverage and not help me as a hairdresser?’ But it is a program to drive people into salons. We have a lot to prove.”
Vaughn Accord, co-owner of Mizu salon in New York, a Bb network salon that also sells other pro brands, said hearing about the Bb partnership “was shocking at first. But in other respects, it’s completely understandable the brand would continue to grow. They are gambling that it will work. As a New York-based salon, I don’t see Sephora as a threat, but I can see that if I were somewhere else in a small market that took real pride in being first to carry the latest cool certain thing and then I found Sephora is going to carry it, too.”
In addition to the 2,200 U.S. salons Bb is sold in, the brand has for years been sold in select prestige retailers including Harrod’s, Selfridges, Space NK, Fred Segal, Colette in Paris and Blue Mercury.
While Bb acknowledged its work is cut out for it in terms of proving to salon owners that the expansion into retail will only grow brand awareness, some salon chain executives are much more skeptical.
Paul Finkelstein, ceo of Regis Corp., the largest operator of chain salons in the world, said the partnership is going to make a lot of salon owners very unhappy.
“The whole concept of a professional brand is that you can have a whole wall of products, but choosing what is best for the shopper is the job of the hairstylist. Stylists don’t want brands sold without a salon,” he said.
Finkelstein admitted that he understands the hype behind Bb’s entry into Sephora and that even one of Regis’ soon-to-be-opened Carlton Hair salons in Santa Monica plans to implement Bb’s new Bb. Shop, a retail experience Bb is launching so that salons have the opportunity to mimic what Sephora will be presenting in their stores. Bb is also pitching a StylingBar concept to salons, one that will offer and execute a special menu of styling services to customers who may want a less formal salon experience. The cost to salons and an overall financial model for these new retail and service opportunities “will come after we get through the test and prove what we can do to a salon’s business,” said Lichtenthal. Bb is working with three salons in the fall that will test various versions of the Bb. Shop and StyleBar initiatives.
Akari, a 20,000-square-foot spa and salon based in Portland, Maine, will be implementing a 50-linear foot Bb. Shop in September, complete with interactive touch screens, education and videos. The Bb. Shop, paid for by Bb, will not be at risk of losing customers to the nearby Sephora at Maine Mall, said Allan Labos, Akari’s owner. “It’s a different market altogether. I feel that stores like Sephora will educate a lot of clients, a higher percentage of the public that I cannot reach.”
Robillard said it’s just a matter of time for all salon owners to embrace the multichannel consumer.
“My method is that you guys have to open your minds. Companies like ours are saying you cannot go by the old rules with being rigid in your distribution. They are all complimentary. The salon business will come around to that.”
And until that time, executives such as Cheryl Santucci, director of beauty and retail for Mario Tricoci Hair Salons and Day Spas, believe a well-trained salon staff can go head-to-head with the beauty retail giant.
“[Bumble’s] program could drive service sales,” she said. “But I would teach my staff to keep the consumer that’s coming in [with the Nice Hair(Cuts) Card] and make sure they are selling her the products the next time.”
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