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The Death of the Professional Beauty Industry

The Professional Beauty Industry as I once knew it, is dead. Having spent the past forty-five years in our once proud industry at every level, my purpose in writing this article is to document by decade, starting with the 60’s which is when I came into the industry, the dynamics that drove that decade with the evolution of the Industry moving forward, so we can all see where everything started shifting negatively and where the industry is today as a result of the evolutionary process over the decades.

Salons that were once a haven for women have become Independent Stylists leasing space from the landlord or salon owner. Professional only products have become commodity products purchased on price alone and found everywhere, especially outside the salon environment. The large distributors are all now owned by the corporate giants, leaving a landscape with smaller distributors fighting the system and losing the battle to a marketplace never seen before in our industry.

The 60’s were all about wet sets, women visiting their stylist at their favorite salon every week to redo their do. During this decade, the old guard manufacturers were Revlon, Lamaur, Helen Curtis, Rilling, Clairol, Roux, and others that generated their income primarily though salons. Early during this decade, Paula Kent purchased from Jheri Redding three simple formulas and started a company called Redken Labs. At the same time an English stylist, Vidal Sassoon, had started a movement that would literally turn heads upside down as his message was “Let the haircut be the blueprint for the style.”, which opened the door for salons to expand their business as they were working on the same 50 clients each week. In a month’s time, they still only worked with the same 50 clients. When hair cutting became the trend, stylists focused on hair cutting were now seeing a different 50 clients each week, now totaling 200 a month, opening the door to additional revenue.

The 70’s saw the emergence of more manufacturers that were following the Redken approach where we saw the entry of Sebastian in 1976 and Nexus in 1979. The focus of these new manufacturers was to help the salon build a whole new business called retail, that eventually opened the flood gates to greater income for all concerned. In the 70’s many Redken concept salons were now competing with their service business to increase retail sales to 25% of their gross business which in turn opened up profitability to levels never seen before. Redken Labs grew exponentially based on their Beauty through Science philosophy and the newer entries such as Sebastian and Nexus were setting their own standards to compete in the new direction of the industry. Chemical services in salons, in particular perms, drove huge numbers at all levels and manufacturers were starting to phase in new products to support the shift in clients’ needs for their maintenance free hair. Education was also on the rise as salons wanted to know as much as they could about the products supporting their services and the new retail income streams that were on the rise.

The 80’s was a decade that saw consistent growth and power for the new manufacturers. Paul Mitchell and Matrix Essentials came into the market in 1981 and we now had five new, aspiring and growing companies that drove the growth of salons through their direct leadership and were becoming so strong that there was an additional shift from the leadership of the aforementioned manufacturers found in the 60’s to the top five leaders that drove the 80’s with their philosophy, products, and education. During this decade salon retail went through the roof, as salon clients were an easy target for professional products that could not be found anywhere but the professional salon. Big hair was the rage which opened the door to newer products that supported this trend. During this period, Beauty Supplies were allowed to represent and carry professional products, as long as they had a shampoo bowl and offered services as part of their in store layout.

Unfortunately, this was one of the first areas where the manufacturer lost control and opened the door to price cutting, non-adherence to policies, and professional products starting to show up in less than professional outlets. This decade also saw the rise of the Independents, eroding the old system of commission salons where the owner hired stylists as employees and grew their business as a team oriented effort. Now the majority of salons nationwide is nothing more than lease spaces for anyone willing to pay their space fees. Products are harder to position in salons because every stylist can make their own decision as to what they use and sell and education has gone by the wayside as a salon owner cannot mandate that his lessors have to attend any educational events.

The 90’s were a time when we acknowledged that we were an aging population and that the Baby Boomers were driving the bus into the next decade. We now see the entry of the corporate giants, Loreal, P&G, Alberto Culver, Unilever, etc., start to purchase not only large distributorships, but also the manufacturers at the top of their game such as Redken and Matrix. The only one of the large five giants in the industry, Paul Mitchell, is the only one that has not been sold. The others, Redken, Matrix, Sebastian, and Nexus are now corporately owned and driven, and while they espouse “professional only”, sell their product range through any source that will make them money. That is why professional only product has become “commodity” product, which is defined by price and ubiquitous placement. With the purchase of the large distributorships that drove the growth for the large manufacturers, in particular Redken and Matrix, the market place was left with middle to small sized distributorships that have not been able to compete with the mass size and scope of the corporate giants.

The 10’s have brought us full circle to where we started this journey in the 60’s. The giant manufacturers then were forced into going retail as the new giants had created an atmosphere in salons that kept their business growing. Unfortunately, we are seeing the same thing happen again with the ownership of family owned and driven businesses being bought out by the corporate giants.

Here is my list of why we are seeing and feeling the results of the death of the Professional Beauty Industry.

Diversion: This key area saw salon products move into retail channels through unscrupulous and unethical people. We had a captive audience for professional products in the 70’s and 80’s, but once the salon client understood that they could find professional products at outlets outside their professional salon, it opened the flood gates and is the original reason we now see these products literally everywhere. The big losers in this ongoing game are the salons and their stylists, who have never recovered. Why buy professional product at the salon when they can buy it at Costco, Target, Drug stores, grocery stores, and on into infinity. Interestingly enough, Beauty Supplies today complain and gripe about their losses to mass retail, as salons once did about them. How the circle turns.

Ownership: Once the top tier of manufacturing companies moved from family ownership to corporate ownership, driven specifically by “bottom” line profitability and stock holders looking for a return, we see a major shift. The reason we don’t see any large number of direct manufacturer educators for these companies, is they were the first things to be discarded as a cost savings. Bigger is not necessarily better, as we have all come to find out.

Independents: This one shift transformed our industry, taking away leadership at salon level and creating a nightmare for manufacturers and distributors alike, as they now have to speak to each stylist separately in salons that once had one or two key people that made financial decisions for the team. Typically stylists today only come into their space when they have an appointment and could care less about education and the industry as a whole.

Distribution: Today it is hard to find large distributorships that once dominated the landscape with their sales force, educators, education and support. They have been purchased by the giant corporations for their stores, which is part of the game plan the giant corporations continue to follow. They want stylists to come in daily if needed, to purchase what they will be using tomorrow or even this week. While they maintain a weak sales force, the long term plan is to get all stylists to enter their stores to purchase their beauty needs. The current distributor base now works with smaller lines that many times do not have the capital to properly market and drive their business.

Trends: Having lived through six decades of this industry and observing the many trends such as the Farrah Fawcett cut and style, the Dorothy Hamill Wedge, Big Hair, Jennifer Aniston, and now Rich Girl Hair. Unfortunately, we have gotten away from keeping the client tied to the salon for service, as hair has become less of an accessory and almost anti-salon. With the exception of the specialty services such as color, straightening, relaxing, and formal events, look around at women’s hair. It is in poor condition, over processed, dry and unmanageable, not shiny, and seemingly not as important as we once saw in previous decades.

Since I took a hard look at why we have lost the industry we all once knew, I would be less than responsible if I did not offer long term solutions to the mess we are in. Here are a few of my suggestions.

Contemporary manufacturers have to control their product movement. If they are working within the professional industry, they have to accept the responsibility for the way their products are positioned, taught, and sold. I suggest legal contracts between the manufacturer and their distributors, as well as the distributor and their salons. Any deviancy brings the loss of the line and legal ramifications. This includes Internet sales, which are typically sold at a discount and offer little to no control. A new interactive group representing these distributors has to be enacted, ensuring that the goals of “professional only”, be the supporting factor driving their growth.

Legislation has to be started state by state to establish salons as a commission based business and Independents have to be relabeled as employees so that control can be brought back into the industry and its long term opportunities.

Distribution networks have to continue developing for the professional only market with a full understanding of the role they share within the vertical integration of their manufacturers and vendors.

In closing, I come from an era in this business where professionalism was everything and was exhibited by all players with a stake in the game. It was a glorious time, with success and prosperity for anyone willing to work hard and devoting their efforts to contributing to the overall concept. It was a time of passion, loyalty, and generally a lot of fun. What happened? Today we are in an apathetic state, very few are making good money, and opportunities have seemingly gone. Being the eternal optimist, I continue to think that we can get it back, but it is going to take all of us moving in the same direction and getting involved at all levels to right the great ship and get it back on its proper course.

The Author, James Hobart, has a sixty year career behind him, ten in the U.S. Military and fifty in the Professional Beauty Industry as an industry executive at every level, with twenty years as a Certified Hypnotherapist. His insight and experience has helped many companies and individuals with their growth and development over the years. His books, Happiness Is Your Birthright, and Salon / Spa Retail – The Lost Revenue Stream, and his Blog: http://jameshobartmarketing.com, support his philosophy on life and are practical sources to create positive change throughout one’s life.

His support of the global Wellness movement and its eight dimensional model is defined by a focus on three income streams, a Financial Professional with a world class financial services company, https://jameshobart.wfgopportunity.com   a Certified Hypnotherapist with a practice in Ventura, CA and a Wellness Coach with the largest Consumer Direct Wellness Marketing Company in North America. More information is available at http://makegreengogreen.com/jameshobart or http://melaleuca.com/jhobart

 

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A SEQUEL TO THE DEATH OF THE PROFESSIONAL BEAUTY INDUSTRY

My articles are written with several areas of importance to the average person reading them. I always start out with the Optimum Wellness trend in the back of my mind, which dictates wellness in eight different sectors and brings vitality, nutritional health, and balance to the individual. Keep in mind that Health is the first Wealth. These include: nutritional facts, weight loss, lifetime fitness, and optimum nutrition. I also cover Marketing, Internet marketing, digital marketing, business ideas, small business ideas, business online, work from home jobs, work from home jobs that are not scams, work at home, and affiliate marketing. I always think about how to help the individual, including self-improvement, get self-help, self-help, motivation quotes, motivational, mind map, mind games, mind body connection, hypnosis, self-hypnosis, and mind mapping.

This article focuses on what I suggested as solutions to the debacle we currently face in the Professional Beauty Industry. To make a long story short, the Professional Beauty Industry has undergone a complete transformation since the 70’s. What used to be a passionate fun, and lucrative industry for all concerned, led by large family owned companies such as Redken Labs, Matrix Essentials, Sebastian, Nexus, and Paul Mitchell, has turned the corner into corporate America. Today with the exception of Paul Mitchell, the other four giant leaders were sold to corporations such as Loreal, Procter and Gamble, Alberto Culver, Unilever, and others.

The sad and unfortunate side effect of these changes is that while these huge corporate conglomerates preach how they support the Hairstylist and Aesthetician, in reality their only obligation is to their Shareholders, who buy into the company to receive Dividends. In the process, the products manufactured by these giant companies can be found almost anywhere: Mass market store shelves, the Internet with almost any brand being available to the Public and producing what has become a “commodity” product, which by definition can be found universally anywhere, with the cost becoming so competitive, they are generally purchased for their price point with convenience as a side factor.

A good example is a Hairstylist recommending Redken to their client after the service. What the Hairstylist is not aware of, since they can’t read minds, is the Client doing mental gymnastics, remembering they have seen Redken at Costco, where they shop every Saturday, online at Target and Sleek, and other places they shop. Do you honestly think the client is going to purchase her Redken from her Hairstylist or wait to see where she can get the product at the best price?

In my previous article, “The Death of the Professional Beauty Industry”, found at http://jameshobartmarketing.com, Linked In, Facebook, and other online sites. I am blessed in having this article read and viewed over 40,000 times to date. It shows that the professional is concerned and actively seeking change.

One of the Solutions that I shared with the Professional community in the article was that Professional Only hair and skincare manufacturers had to be the starting point for change to happen. If the manufacturer takes on the responsibility for where they market their products and are willing to control who purchases them, it opens the door to an effort that is desperately needed today with Greed in place.

If the following question affects you mentally and emotionally, then I have a further solution to this ongoing dilemma.

“Are You Sick and Tired of Seeing ‘Professional Only’ Products In Mass Market Outlets Available to the Public?”

This one hurts badly as it has become the new Normal and helped kill the great Income stream of Professional Homecare. I have made a conscious decision to only use the word “RETAIL” to describe all non-professional channels such as the Targets, Walmarts, Ultas, Sephoras, and online shopping sites such as Target, Sleek, E-Bay, Amazon and so many more that are hard to list.

We do not Retail!, we go above and beyond with our clients by going through a pre-service Consultation which gives us clues about what specific products we should be using on that client with educational information being shared to get their hair back on track. This specific consultation elevates your professional image over the average hairstylist who could care less. The final step in the service and the last thing said to your client is “I recommend so and so for your Professional Homecare as we saw how well the products worked on your hair today.” These basic techniques are the close in sales. Unfortunatly many professionals have gotten away from these basic steps with the current dynamics in the industry. One of our goals is to get this type of business education back into the mainstream and applied for greater income possibilities.

I have always maintained that if we utilize the three pillars of successful Professional Homecare, this income stream, different than the Service income stream, can easily generate at least half the profit of the entire salon’s business. Powerful, and many of us that came through the 70’s, 80’s and early 90’s can substantiate these claims and how important Professional Homecare used to be towards the success of the salon’s staff in generating a lifestyle supported by the two income streams – Service and Professional Homecare.

When professional only products became mass market available, it literally killed our ability to Recommend Professional Only products to our esteemed clientele.

The three pillars of Professional Homecare were and are still: Use, Inventory, and Recommendation.

What we USE at the Back Bar and at our styling station has power, empowering us in our communication with our clients. If we are using Dawn at the Back Bar, many salon clients would see that as endorsement of that brand and them purchasing Dawn at the grocery store for home use. See how it works? That is why it is Critical to only use Professional Only products when interfacing with your client.

The second pillar, INVENTORY, is simple enough. We need to have enough stock on hand of our Professional products to be able to service each client that wants to follow our Recommendation to take home. Recommend and get agreement for what you offer and then find out that you are out of stock kills the sale, but as important is that this client may purchase another product, somewhere else to replace your suggestion and find she really likes the new product, cutting you out of future sales.

The third pillar, RECOMMENDATION, and the most important because if you are fulfilling the other two and miss this one, you will soon have dust and dead bugs on your product display, as products do not move by themselves.

I have seen numerous consumer surveys conducted by the Industry that reveals how consumers react and think when they are asked questions about their salon ”Experience”. Typically the consumer is asked “Did your Stylist recommend products for home use?” The answer is 70% of the time, they did not. The next question is “If your Stylist had recommended products for home use, would you have purchased?” Answer is a resounding 80% yes. The case is clear. We like to carry on a bantering conversation with out clients, talking about everything under the sun, yet very seldom talk about their hair or skin – the reason they came into the salon to begin with. These three pillars are the foundation of a great Professional Homecare program and should be followed religiously by anyone wanting to maximize their salon’s profitability.

I asked a pertinent question earlier –

“Are You Sick and Tired of Seeing ‘Professional Only’ Products In Mass Market Outlets Available to the Public?”

If you are a Professional Hairstylist or Aesthetician and is willing to be part of the change needed to transform the face of our once proud and passionate industry, here is one answer.

I have joined forces with Alan Bentfield Bush, previous owner of ABBA and the dynamic force behind his “Method” of cutting and hair design that many Guest Artists use around the country and continues to be one of the most sought after cutting methods by contemporary artists.

We are supporting his short line of “green” products designed by a Hairstylist for all Hairstylists, as a Professional Only line that is supported by a program I wrote called the iSuccess© Salon/Spa Program. This program challenges the professional Hairstylist / Aesthetician to evaluate the program for its merit and if they want to be part of it, have to sign an Agreement with us that the products they purchase directly from us are going to be used professionally at the Back Bar and styling station and for the Professional Recommendations issued by the Hairstylist for their clients Professional Homecare.

 Their working license will be checked against the State Board in their state and along with the simple agreement they sign with us open the door to direct purchasing of the our products online at our secure website.

We have eliminated the middle man or distributor in the normal channel of distribution and now are directly allowing our Certified Salons/Spas to purchase directly from our secure website – http://yhshaircare.com.  

We plan to support the salons/spas in our professional network with artistic education handled by Alan’s Method Alliance and the Advanced Business Academy handled by James Hobart. These two centers of education will offer unique salon/spa education that supports our basic foundation and the growth and development of our industry in a positive and forward thinking way.

If you are one of the many Professional Only minded Hairstylists and Aestheticians still working in our industry that has been looking for an answer to better and higher pay levels, lower inventory costs, control of professional products, and a close association with the manufacturer, then please contact either Alan or myself, to get full information on our unique and timely program. We plan to formally launch our concept and product line February 26th, 2018 at a Method Alliance program we are conducting in Huntington Beach at the Fuzion Artistry Salon/Spa. Just say YES to YHS…. Your Haircare System.

In closing, I come from an era in this business where professionalism was everything and was exhibited by all players with a stake in the game. It was a glorious time, with success and prosperity for anyone willing to work hard and devoting their efforts to contributing to the overall concept. It was a time of passion, loyalty, and generally a lot of fun. What happened? Today we are in an apathetic state, very few are making good money, and opportunities have seemingly gone. Being the eternal optimist, I continue to think that we can get it back, but it is going to take all of us moving in the same direction and getting involved at all levels to right the great ship and get it back on its proper course. You now have a choice. Make it the right one.

The Author, James Hobart, has a sixty-year career behind him, ten in the U.S. Military and fifty in the Professional Beauty Industry as an industry executive at every level, with twenty years as a Certified Hypnotherapist. His insight and experience has helped many companies and individuals with their growth and development over the years. His books, Happiness Is Your Birthright, and Salon / Spa Retail – The Lost Revenue Stream, and his Blog: http://jameshobartmarketing.com, support his philosophy on life and are practical sources to create positive change throughout one’s life.

His support of the global Wellness movement and its eight dimensional model is defined by a focus on three income streams, a Financial Professional with a world class financial services company, https://jameshobart.wfgopportunity.com   a Certified Hypnotherapist with a practice in Ventura, CA and a Wellness Coach with the largest Consumer Direct Wellness Marketing Company in North America. More information is available at http://makegreengogreen.com/jameshobart or http://melaleuca.com/jhobart