Greg is Gregarious About Bumble & Bumble:
I have a question about the “business” side of the beauty industry. In particular I’m interested in Bumble and Bumble. I am part owner of a Bumble and bumble network salon. Recently we’ve been made to sign some pretty draconian anti-diversion contracts. At the same time I’ve also noticed that Amazon now sells B&b product. Then, to add injury to insult, we’ve also been asked to stock a lot more product. So here’s my question: Do you know anything about what’s going on at B&B? We love the product and have been happy with our mutually beneficial business relationship – I’m just curious as to why it seems to be changing. Thanks a ton!
The Right Brain Bumbles Back:
Greg, your question is a little bit outside of the normal scientific expertise of the Beauty Brains, but you intrigued us and so we did a little digging. Here’s what we found…
Bumble & Bumble, as you well know, is a professional salon company now owned by Estee Lauder. (For anyone who isn’t familiar with the shampoos and other products offered by B&B, go look here.) In theory professional companies, like B&B, only sell their products to salons while mass market companies only sell to retail chains. In reality, many large companies like P&G, own both professional and retail brands. Therefore, the line between salon and retail is getting a bit blurry.
This blurring of salon and retail is a trend documented by the Kline Group in their 2006 hair care report. According to Kline, more and more salon brands are moving into retail marketing. For more details you can click here, but we warn you – you’ll have to pay for the full Kline report and it’s not cheap!
What does Lauder think of salon products sold at retail? We’re don’t know, but their annual report says that for Q1 of 2006, B&B sales are up partly due to “new points of distribution.” We suppose they could be referring to new salons but they could also be talking about the Amazon.com sales that Greg mentioned. Interestingly, we found a reference that discusses how L’oreal and Proctor and Gamble are reacting to the way other players (like Alberto Culver) are taking salon brands to retail. The article says that “others might be tempted to follow.”
Hmmmm. Are B&B testing the waters by selling through Amazon.com? By selling through Amazon.com, while pushing for larger salon orders and while staunchly proclaiming their opposition to diversion, B&B may be trying to have their cake and eat it too.
The Brain’s Bottom Line:
Greg has opened an interesting can of cosmetic worms. To us, it looks like BB are feeling their way through a changing marketplace. But what do we know? We’re just the science geeks. Still, we hope this helps.
{ 5 comments… read them below or add one }
B&B is sold in Australia through meccacosmetica which is definitely not a hair salon.
In my opinion a lot of haircare manufacturers put up the anti-diversion facade because of the industry pressure and/or it gives their line some sort of prestige on some level. Amazon and similar sites have now become the ideal (and somewhat hard to stop)diversion outlet for the same greedy salon owners to divert their ‘legitimately bought’ product through. I guess you could say the ‘internet is the modern back door’. In the case of Bumble…only a small handful of the Bumble & Bumble on Amazon is actually SOLD by Amazon. The rest are from companies who buy and sell diverted product OR actual authorized salons that sell legitimately bought product through this channel and often under a different name to avoid being caught. The bottom line is that if manufacturers were really serious about stopping the diversion of their product, there are fairly inexpensive ways of at least putting a big dent in it. However, at the end of the day more diversion = more sales and I haven’t come across a single product line yet, that cares to put a stop to that, no matter what it involves…many I suspect, actually join in, quietly, while keeping up their anti-diversion facade.
I for one do not believe that any salon is capable of diverting enough Bumble to supply these online sources and now Target and CVS pharmacies. How could enough product be “diverted” for this and Bumble not be able to figure it out? I think they are definitely having their cake and etc.
And why would a major corporation like Target care enough about getting a single product line to go through the trouble?
It’s a conspiracy to rip of consumers..
many hair care manufacturers pretend to fight diversion. Target, Costco, Wallmart , CVS and others are receiving the diverted good through a group of diverters based in Las Vegas, Texas and New York…
No one can stop the diversion because no one can stop the corruption
honestly it doesn’t suprise me that b&b salons would divert product. i mean the requirements they put on you are completely absurd. you must purchase at least $ 2000 a month whether you need it or not. the only way to not fall behind and become thousands in debt with this product is to find other ways to sell it. for a small salon this is alot of pressure, many have stopped carrying it for this reason. it seems b&b aren’t looking to support stylists but after the almighty dollar.