Changing the Channel

As we all navigate the postpandemic digital age, there are now more ways than ever to buy—and sell—professional beauty products. We checked in with some of the leading manufacturers to learn more about the recent changes they’ve made to their distribution channels. Plus, find out how they’re continuing to support owners and stylists with in-salon retail opportunities.

BY LAUREN FARRUGIA

From direct distribution to working directly with Amazon, more professional beauty brands are adopting an omnichannel approach to selling their products. With all of these changes and more competition in the marketplace, many salon owners and stylists are wondering how it impacts their business.

“A lot has changed over the last few years,” says Michael Parsons, general manager of Kao Canada’s Salon Division. “People’s buying habits and preferences have changed; they have become a bit more demanding in terms of where they want to buy their products.”

The “A” Word

Since the ways that consumers are accessing and buying their products have changed, many are turning to Amazon to buy professional haircare and styling products at just the click of a button.

The increasing demand for hair products on Amazon has created many issues for beauty pros, including products being diverted and/or sold at lower prices, which has an impact on salons’ and stylists’ retail profit margins.

Although competing with Amazon can seem difficult for salon owners and stylists, Kao decided to begin working directly with Amazon in 2019 for their brands, which include Goldwell, KMS and Kerasilk, to help control and stabilize pricing and ensure that their retail products are being sold for amounts that are reflective of in-salon prices.

“The biggest incentive when it comes to selling on Amazon is that if you become a partner brand with Amazon, then they get all of the other thirdparty sellers of your brand off of their site,” says Parsons. “Until you partner with [Amazon], there’s grey market, diverters and people who get products through who knows where, and they’re selling your products for prices that are undercutting salon owners and stylists, and it’s damaging. As soon as you partner with them, they stop all of that. They stop other people from selling your brand’s products on their site and they sell the products at the MSRP (manufacturer’s suggested retail price).”

As more manufacturers have begun partnering with Amazon, they’re able to even the playing field for salon owners and stylists in terms of competing with Amazon for sales. In other words, this means that if a client is interested in buying said manufacturer’s products from a salon, they won’t be able to find the same products at a cheaper price through Amazon.

“For us, it goes back to our heritage,” says Parsons. “We’ve always been dedicated to the professional stylists, and we want to keep it that way. When our products do end up in channels that they’re not supposed to be in, we take it very seriously.”

“In terms of the benefits to us of selling on Amazon, it serves that customer that prefers to shop that way, but our preference is always to try to get the sale at the salon level,” he adds. “We try to make sure we do everything possible for the salon and the stylist to get that sale before it gets to Amazon.”

Finding the Silver Lining

While it’s understandable for some salons and stylists to feel slighted if a manufacturer decides to work with Amazon—as it means that the products are more accessible to the client and may tempt them to buy online versus from a salon—there are ways for salon owners and stylists to reap the rewards from this.

Case in point: Kao’s Salon Alliance Program, which the company has expanded to include sales from Amazon. The program requires no fee (or minimum) to join and it’s a tiered program based on spending, ranging from silver and gold to platinum and titanium. Certain Kao brands and products have different point values, and members can use their points to purchase products, education and more.

According to Kao, they take a portion of what they sell on Amazon (per province) and give a percentage of it back to qualifying salons in that particular province “in the form of loyalty points that they can choose to spend on education, backbar products, business-building tools, etc.”

“I think the original intent was like all loyalty programs, which was to entice and reward stylists and salon owners for their purchases to try to get them to be loyal to our brand,” says Parsons. “Over time, our philosophy has changed. Now, we look to this rewards program to, yes, give the chance to earn rewards, but more than anything, as a place where stylists and owners can find tools to educate, motivate and inspire themselves.”

In addition to the Salon Alliance Program, Kao has other incentives in place to help with in-salon retail efforts, such as the brand’s marketing efforts that are targeted to encourage clients to ask for products when they visit a salon, support materials on product knowledge (including key ingredients, features and benefits), and opportunities for salon owners and stylists to work with their sales consultants for a more customized approach.

“Our sales consultants or the distributor sales team can help set targets, share best practices, create business plans and things like that,” says Parsons. “We have programs in place that focus on ensuring that the retail opportunities [in the salon] are not wasted, so that they can have the confidence in selling the product and are able to tell their clients why and how to use the products.”

“At the end of the day, it’s about customization,” he adds. “It really goes back to the fact that we try not to be just a transactional partner and we try to be a company that works with our salons and provides them with tools and knowledge to be able to be successful with their retail. More often than not, we’re putting together customized business plans based on the salon

IN ADDITION TO REDEEMING REWARDS COLLECTED THROUGH KAO’S SALON ALLIANCE PROGRAM FOR PRODUCTS AND TOOLS, THEY CAN BE USED FOR EDUCATION AND TICKETS TO GLOBAL EVENTS OR EVEN REDEEMED WITH THE BRAND’S THIRDPARTY PARTNERS, SUCH AS GREEN CIRCLE SALONS AND SALONSCALE.

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“The single most important opportunity for salons is to tie their in-salon services to retail. It’s the real point of di erence for a stylist and salon, and it’s how they get to benefit from the trust the client has in them. The salon opportunity lies in the relationship with the client, [the stylists’] expertise and the ability of the salon to carry a wide o ering of products that meets their clients’ needs.”

— John Fortunato, head of Henkel Beauty Care—Hair Professional Canada

“It goes back to the basics. I’ve been in salons where owners or stylists get into a routine where they’re working on a regular [client] and they’re talking about life and building their relationship. Because, at the end of the day, stylists are in the business of relationship building, but they’re maybe not taking advantage of the time that they have with their client to talk about products. Too often, the client is slipping out the door and the stylist missed the chance to share what products they used, explain the products or even just ask if they need products to take home. It’s also easy to assume that people buy their products somewhere else and they don’t want to be pushy. It’s about making sure that you’re doing the consultation, asking the right questions and taking advantage of the time that you have with the client in your chair.”

— Michael Parsons, general manager, Kao Canada Salon Division owners’ needs, and we work together to help them improve in these areas. There’s no one-size-fits-all in this industry. I think we consider ourselves that extra support to make sure that stylists and salon owners are aware of all of our offerings and we want to be able to help in any area we can.”

In addition to making its retail products more accessible on Amazon, Kao has developed its own ecommerce shop, where salon owners and stylists can directly purchase professional-only products, earn rewards points and have their items delivered in as little as a few days.

Going Direct

Undoubtedly, working with professional beauty distributors has numerous benefits for brands and salons/stylists. However, some manufacturers have decided to begin selling their products directly—from offering their products on their own ecommerce shops to building their own sales teams—to help strengthen their relationships with salons and stylists, while also ensuring that their customers have a direct line of contact to the brand and full access to their offerings.

In 2022, Schwarzkopf Professional announced its direct sales team, which began selling the brand’s products directly in Ontario and Quebec. According to the company, its biggest goal was to provide salon owners and stylists with access to education, direct sales representatives for training and support and other resources.

“Understanding that Schwarzkopf enjoys a top position in salons across Canada is to recognize the distributors and their sales teams for a job well done,” says John Fortunato, head of Henkel Beauty Care—Hair Professional Canada. “Our reason for change had nothing to do with the distributor and its people. The reason we made this decision is to give salons access to the resources offered by the brand.”

“By talking directly to the salon, Schwarzkopf will better understand what is needed to serve the salon and the client,” he adds. “We’re living in a time of unprecedented change. Therefore, a ready response is imperative.”

According to Schwarzkopf, by offering direct distribution in Ontario and Quebec, their team has also been able to make sure that their sales and education teams are up to date on product knowledge and education, as well as rewards and incentives.

One of the reasons why the brand decided to begin offering direct distribution in Ontario and Quebec is because of how close in distance the company and its team are to these salons, but shares that this change has also come with its challenges.

“Many salon owners have been in long-term relationships with their distributor and sales consultants,” says Fortunato. “It’s on us to provide that clarity on benefits, and that will require time via regular salon visits, social media and by creating excitement around Schwarzkopf’s support of hairdressers and their industry.”

“We can deliver to most of the markets within 48 hours and to the principal ones in 24 hours. Canada is vast with a small population and therefore the direct-to-salon option has its limitations,” he adds. “We’ve kept a close relationship with our distributors in Ontario and Quebec. We’ve agreed to long-term contracts in support of their salon professional store business, which is essential to the success of Schwarzkopf.”

Rewards & Incentives

Although its distribution model has changed in Ontario and Quebec, Schwarzkopf Professional continues to have a rewards program in place to incentivize salon owners and stylists for their purchases.

“ClubSKP is a back-to-front offering that provides the salon and hairstylists with education, incentives, marketing tools and retail training programs,” says

Fortunato. “For the salon and stylists to benefit holistically from ClubSKP, they’re best served by having a direct team of salon professionals that can bring ClubSKP to life with the salon and stylists.”

The tiered rewards program has three levels—S, K and P—and offers a different number of points per dollar on products purchased. The program is free to join and is open to salon owners, independents and chair renters.

In addition to ClubSKP, Henkel has rewards programs available for its other professional brands, including Joico’s Access Joico, Alterna Haircare’s Alterna Rewards and Authentic Beauty Concept’s Authentic Rewards, and will be launching a new loyalty program that includes all of its brands in 2024. According to Henkel, these programs were developed to help support salons in reducing their overhead, providing incentives for their staff, offering access to samples and products before they’ve launched and helping them to provide professional development through education, business strategies, shows, events and other training opportunities.

“2023 is a reset year due to the fundamental change in our go-tomarket business model, and salons and stylists will see and hear about a robust list of exciting changes, starting in the back of this year and into 2024,” says Fortunato. “Change often comes with uncertainty, which can be concerning until new processes are formed. Our role is to ensure a smooth transition and to bring real value to the salon.”

“Salons and stylists are our reason for being,” he adds. “We have a motto inside our building that says, ‘If it’s good for the hairdresser, it’s good for Schwarzkopf.’ All of our decisions about innovation, improving existing programs and launching new ones are anchored in this belief.”

Although direct distribution has been the biggest change for Schwarzkopf Professional this year, other changes, such as selling on Amazon, have also been made by the brand in response to the demand of today’s consumers.

“Our reality is that consumers want to buy what they want, where they want, and therefore there is a departure from salon-only brands to brands available across a broad spectrum of channels,” says Fortunato. “Amazon is for the end consumer, and here we offer retail products only. Our direct offering is to salons and is anchored in supporting salon services, back to front. ”