On the heels of launching an entirely new and updated Sebastian hair care range, Procter & Gamble is taking on one of the salon industry's biggest challenges: diversion.
Tackling the sale of professional products in unauthorized venues has been important to P&G since it entered the professional industry with the acquisition of Wella in 2003.
According to Kevin Otero, general manager of P&G Professional Care North America, "Susan Arnold [P&G vice chairman, Beauty & Health] was very supportive of us cleaning up the professional market to protect the growth of the brand and to protect the salon channel and its integrity."
Otero said that from 10 to 30 percent of a salon's revenue comes from the sale of products, and because of the sales that diversion takes away from traditional outlets, many salons go bankrupt each year. Diversion, he said, can be attributed to both salons selling product out their back door to unauthorized retailers, as well as to distributors who sell product to vendors outside their regular salon and professional network.
After learning these facts, P&G decided to make diverting products more difficult. As salons were presented with Sebastian's new lineup, they were also shown an independent contract that said if they were to divert any Sebastian items they would be responsible for a financial penalty. The Sebastian contract is not new to the industry, Otero said, but P&G's intent to follow up on contract breakers is hard core.
"I know others in the industry do [a contract] but what is unwavering is our diligence," said Otero. "They have to sign the contract before we ship the products. It is a way to police and control any diversion that is going on."
P&G also runs a program that includes coding and tracking products.
"We can see the original recipient by a product's coding. Then we can use the contract to take legal action. We have severed relationships with many customers that were in our network. The bulk [of diversion we discovered] was coming from three distributors, two in the U.S. and one in Canada."
Since the crackdown, P&G said it has seen sales of its professional products in retail channels decrease. According to AC Nielsen data, sales of P&G professional products in retail channels fell 15 percent in the most recent 52 weeks, ended April 12.Otero cited Paul Mitchell as another company that "is also very good" in cleaning up diversion. Other manufacturers, he said, claim to be committed but "sometimes turn a blind eye." Recently, in part for its diversion efforts, as well as to recognize its service and partnership, 350 Regis banner salons switched to carrying Wella hair color.
The new Sebastian range ships to salons in July. The line consists of 33 stockkeeping units, and includes Whipped Creme, a next-generation mousse that is a styler and a conditioner in one, which sells for $18.95.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)