It’s official: Today, June 24, 2019, Amazon.com entered the professional beauty space and is now selling to licensed salon professionals through their Amazon Business platform. To get pro pricing, you have to belong to Amazon Business and submit your license. No doubt they will manually verify each and every application and most likely, have already established ties to each state government cosmetology body. No one does business like Amazon.
The good, bad and the ugly.
But before I go there, today’s announcement is years in the making and I predicted this day nearly ten years ago. I recall vividly having my annual vendors charity weekend in 2005 telling everyone they needed to have their goods on Amazon and if not, they would sell your competitor’s brands. Everyone shook their head like I was on crack cocaine.
Amazon started to enter the pro industry with its Luxury Beauty platform. It signed up plenty of pro beauty companies along with consumer companies. Essie and Zoya were first to sign up for nails. Eventually CND, OPI, Moroccanoil, Redken, Oribe and 100’s of others would join. Interesting enough, Harlan Kirshner was the ring leader for Amazon getting pro beauty companies to sign up or lose out. Ironically, the pro beauty industry’s biggest rep who calls on SBH (Sally Beauty Holdings), Salon Centric and Ulta and makes $$$$ in commissions, played the Amazon side and got many companies to sign up. Harlan is one reason why we don’t see rep groups anymore.
With so many companies part of Luxury Beauty, Professional Beauty was the next step in Amazon’s dominance of all beauty. Today SBH stock is down more than 15% to a new low of $12.47 as I write this. Ulta is down too but that is because Ulta stock sellers don’t understand Ulta’s business strategy. Ulta will continue to best Amazon in beauty for many reasons, none of them part of this blog. But SBH like I have mentioned several times before is vulnerable, especially Cosmoprof because Amazon is focused on their best-selling brands: Redken, Wella and OPI.
OK, here is the GOOD of today’s announcement:
It’s done and now all the players can move on. Salons and spas have been buying on Amazon for years and really the only thing affected are retail and hair color products which will now be available at wholesale costs. Next week we will see what discounts are offered. What is also good is that Amazon is an open book, you can see their strategy right in front of you and you can either ignore it or take advantage of it. One thing is for certain: SBH is the most vulnerable beauty company right now.
The BAD of today’s announcement:
Amazon took the relationships of the pro beauty industry and said good-bye to them. Amazon bet big time the industry doesn’t need sales reps, education, trade shows, stores, sampling and demos. Just think of the savings. And if licensed professionals like it this way, bad news for reps and stores.
The UGLY of today’s announcement:
If you think about it the pro beauty business is only 40 years old and how fitting for Amazon to announce in 2019, nearly 40 years to the day when Matrix and Paul Mitchell started. In retrospect, that is an awfully short time for an industry to come and go and that is ugly. Right now Paul Mitchell is not part of the Amazon story and is arguably the largest pro hair care company left (and still independent). Will it become “us vs. them” mentality? In the end, Amazon wins on convenience and next day shipping (they are testing two hour delivery in Denver and other key cities). Coty went all in and soon we will see what that decision means for the rest of the industry.
Bottom line: Business as usual. Coty and L’Oreal will ship a few more goods to Amazon’s DC’s and fewer goods to SBH’s DC. But in the end, overall usage of pro beauty products doesn’t change and since Amazon Pro Beauty is only good for licensed individuals, Ulta will continue to gain overall market share.
CBD this, CBD that. Why all the buzz on CBD products especially with the FDA regulating all of them? Even Kroger just announced they are putting CBD products into nearly 1000 stores. Biotone were the first CBD products we started carrying, priced at $89.95 for a small cream or ointment. We sold a few jars and then I tested it on myself and compared to Biofreeze and arnica oil. At least with Biofreeze, you feel that cool sensation for a few minutes telling your mind that it is actually doing something good for your body. Arnica oil goes on smooth, smells good and actually has some benefits although not enough for arthritis. CBD cream and ointment? Nothing good that I could sense. No coolness, no smell, no tingling, no benefit. We will see, everyone is jumping on the bandwagon, how long will consumers pay a huge premium for CBD beauty products?
American or Canadian cannabis is best? Then again, who needs CBD products when you can just smoke or eat cannabis? The new strains are so strong, one hit is all you need. But don’t ask me, haven’t touched the stuff in decades but if they had this while I was at MSU, not sure I would have graduated. Hmm, wondering if there is a resurgence in bean bag chairs and black light posters.
Yep, hip replacement surgery July 23. I guess never missing a day of exercise in 30 years will do that to you. Or maybe it was genetics. One thing for certain: I will miss Cosmoprof for the first time but after reviewing the exhibitor list, looks like I won’t be missing anything except for John Barth (we don’t even have a stand this year). This show like the trade magazines are indicative of the pro beauty business. Funny thing is when it comes to hair care, what are the most popular brands today? The same brands that were launched in the late 70’s and early 80’s. What are the most popular personal care products today? The same brands that were launched after WWII. Looks like some things never change after all.
I test drove the new AUDI E-Tron SUV. Very impressive, 200 miles on a single charge, ultra quiet, 0-60 in 5.6 seconds and interior totally AUDI. Definitely competition for Tesla.
Finishing up thebeautybook Fall 2019 edition, seems like six months goes by in two. Love the new edition, more than 150 new TNG products that will rock our customer’s world. Good thing since none of our vendors had anything worthwhile to add.
What is going on at Universal Companies? They haven’t published their catalog since 2017 and I just received their “What’s New Edition” piece. I am not sure if it is a magazine or catalog but it is one of the worst printed pieces I have ever seen. And really, they now have “Signature brands.”
Privacy? What’s that? If you vote, you have to give your driver’s license to ID yourself. Voting records have your address. Now voting records have been made public so just about everyone’s home address is on Google. And I don’t know about you, but the amount of junk email I get each day is growing exponentially. I’m wondering when junk texts will start coming.
Wait! Is that the sun? OMG, it is. Wait! Where did it go? How can summer be here next week with the days starting to get shorter when we have yet to enjoy more than two nice consecutive nice days!
Just finishing the last book in a long series by Dean Koontz, his latest and greatest superstar, Jane Hawk. The best summer reading for sure! And love the latest season of BILLIONS.
I know, I know, I know! Where did the time go? Between now and my last blog, what has happened that we missed or have wanted to miss? Not much.
But hey, that isn’t why I haven’t blogged since the dinosaurs were roaming 65 million years ago, I have been traveling. In fact, just got back from Vegas and attended a fab wedding (my assistant Lindsay and her now husband Paul) and then drove to the Grand Canyon for a couple days and then drove to Lake Powell, Utah for a few more days. What is amazing is that I must have been to Vegas more than 100 times but never to the Grand Canyon. For some reason I think you too have never been which may explain that the average age of visitors had to be early 70’s. Canes, walkers and wheelchairs were all there and my guess is everyone really wants to see the GC in their lifetime and eventually, we all get there. I have to say, the scenery is awesome and breathtaking.
Lake Powell is located in Utah but for all intent purposes, Page, AZ and is mostly Indian reservation land. Lake Powell features many “fingers” throughout the lake that make it very cool with plenty of natural sand beaches for houseboats to hang out.
Perhaps one of the coolest tours was that of Upper Antelope Canyon, located on the Navajo Indian Reserve and only accessible by a licensed Navajo tour guide. The canyon with the sun coming through is magical and certainly worth a visit.
My favorite pastime is traveling. You get to experience so many different geographical settings, diverse people and of course, local food and wine (and most recently, bourbon). I learned that Utah is not the best place for alcoholics. The place we stayed at told us each drink cannot exceed 1.5 oz. and is measured and controlled by the government. So if you want a double, you have to order two drinks, and have two people at the table. And just to think that alcohol is legal.
Now let’s talk some business. Oh, you want to see a picture of Lindsay in her wedding dress first? Why not, it is not often you are a bride in Vegas and can wear a wedding dress on the Strip, in restaurants and bars and even the pool. What I find is so amazing is that there are so many brides walking around Vegas, tourists don’t even look anymore. Then again, no one looks at anyone because their eyes are glued to their smartphones.
Cosmoprof North America is coming up in July and at one time was the barometer of the pro beauty business (many of us remember when it was called the BBSI before the PBA sold the show to Cosmoprof and the show was actually held twice a year). Now the show is less about pro beauty and more about retail incubators and packaging companies. Can anyone tell me of importance who will be exhibiting and attending? TNG is not even taking a stand this year as we join CND, OPI and so many other companies. No doubt about it, Cosmoprof is an open book of the state of the business.
Tariffs yes, tariffs no? Right now, Trump is putting small and medium businesses at risk including American farmers. With Amazon the biggest online retailer and in control of most pricing, pass through of increases will be difficult at best. That means businesses like TNG will eat much of the tariff increases and eventually pass on some of the costs to consumers or stop selling some products altogether. As many CEO’s can attest, survival of the fittest is at its peak right now.
Steven Tamares, CEO of Bed Bath & Beyond, finally fired. I mention this only because activist shareholders are more and more involved in public companies and demanding their way or the highway. Tamares needed to go years ago and nearly killed Bed Bath’s business. The question now is can they be saved which is the same question being asked about Pier I, Office Depot, Staples and so many others. And one CEO I would not want to be right now is Chris Brinkman, head of Sally Beauty Company.
With summer finally arriving next month, I’m loving the new EMMA Beauty Summer Collection featuring the best neon colors that can’t be beat. After a terrible spring, we really need a fabulous summer and what better way than painting your nails with colors including Slice of Heaven and Sour Apple Passion. Batch 0719 is just as electrifying!
Alas, looks like hip replacement surgery is in my near future. If Nick Saban can do it so can I. I guess putting on more than 15,000 miles running, more than 10,000 miles bicycling, more than 5,000 yoga classes and countless other exercises like aerobics did its trick. But in the end, I would do it all over again.
Welcome to March! February was as brutal of a month weather-wise that could be, from rainy and cold CA to wintery NY. In Michigan we got to experience the polar vortex at –38F, freezing rain, snow, rain, blue skies, 50F, and everything in-between. Spring is less than 3 weeks away, hooray.
The salon suite phenomena is an express train on steroids. Sola suites has hundreds of locations and opening more. My Suites already has more than 100 locations and wants to open a couple hundred more. Plus there are plenty others like Phenix, and Premier not to mention individual salons that are all booth rental. Let’s suggest each suite has 25 tenants and with just 1000 suites across the USA, that would account for 25,000 hairdressers (small percentage are nail and spa). With the growth plans in place over the next few years, perhaps 70%-80% of hairdressers will be renting space and only exclusive and franchise salons will remain.
The big question to ask, “If the salon industry thrived for 100 years, what factors came into place to allow salon suites to prosper?” JB, why not chime in on this one!
Nails are alive and well and in fact, I see a bit of the 80’s resurfacing. Nail franchisors see huge opportunities and selling franchises as fast as possible. Franchise owners/nail techs love the business concept and know that women love getting mani’s & pedi’s but want a pleasant and clean environment to get their services done. This is very good news indeed for TNG and I love the fact nail techs make a great income doing what they do best. I think what is making this happen is that Vietnamese salons have peaked as women from Vietnam no longer want to come to the USA to do nails. Vietnam is thriving and growing 50% faster than China and manufacturing is soaring. Women have much more opportunity to establish careers than ever before and they are taking advantage of it. Next trend: Beauty schools catering to nails and establishing curriculum to meet the growing demand.
Speaking of nails, I have to mention EMMA Beauty. No brand is having as much fun as EMMA and everyone is loving its brand message targeted towards Millennial’s and healthy living.
So far so good: No government shutdown and no additional tariffs. In fact, looks like China and the USA are going to strike a trade deal and perhaps even rescind the current 10% surcharge. If so that would continue to do wonders for the stock market which is having its best two month performance since 1987. S&P 3150 by yearend is very likely.
Detroit is rocking and rolling with the opening of the Shinola hotel. You know Detroit is hot when they charge $37 for valet parking and $28 for a truffle pizza. Can you imagine those prices just a few years back? Although it does cost upwards of $70 to valet in Chicago, just saying.
The last issue of Nailpro magazine was less than 90 pages printed on super thin paper and cover stock. While nails are hot, trade magazines are not. And did you see the last issue of Beauty Store Business? Instead of being oversized, downsized to regular magazine size and thin as a mint. What is the future of rep shows? Two shows this year combined into one and dismal results. No doubt booth renters are buying most of their stuff on Amazon and is it any wonder Amazon will generate more than $20 billion in advertising revenue next year?
Lyft is beating Uber to the IPO market? Which one do you think will win the ultimate prize?
I love everything new. Don’t you? New restaurants (most of them are bad), new hotels (checking out the Shinola in a couple weeks), new TV series (loved the last episode of Ray Donovan and into Stranger Things), new food items (are you into Halo ice cream, they secretly stole a huge chunk of the market), new clothes and shoes (average man owns 12 pairs of shoes, average woman 27 pairs), and let’s not talk about alcohol.
But what I love best when it comes to new is designing, creating, and producing new products for our customers. What women really love most about new products are beauty products especially those that are fragranced (lotions must pass the smell test first) or offer seasonal colors (lipsticks, lip gloss, nail polish). For our salon and spa customers, beauty products designed to assist in the salon or spa service are also important.
Here are some of my fav new products that are now in stock and in no particular order:
1. Kudo’s Gift & Greeting Card. The idea of combining our best-selling bath bombs with a high quality greeting card came to me after spending $5.99-$7.99 for a Papyrus greeting card. Even Hallmark cards are that expensive and all you get is a card. For the same price or less, Kudo’s offers a really cool spinning bath bomb and greeting card. There are more than 30 variations including Happy Birthday, Love, Anniversary, Thank you, Friendship and more. $5.99 MRSP
2. Misty Mountain Aroma Diffuser. From Pure Essential Oil Works, Misty Mountain is the first open diffuser that allows the mist to resemble fog in a mountain range. When lit and in a dark setting it is quite magical. $49.99 MSRP.
3. 5-Layer Cotton Pads. ForPro once again delivers one of the most amazing cotton products to hit the market. Invented in Japan, ForPro developed the product in its factory in China and the results are spectacular. Each pad contains 5 layers that can be removed layer by layer to use as a facial. Or you can use the pad for removing makeup or nail polish. They come packed in a handy dispenser box. 80-ct, $2.99 MSRP
4. Island Flip-Flops. As most of you know I hate socks and prefer to walk bare foot. That is one reason why I love flip-flops and thought, why not come out with a line of flip-flops to compete against store brands such as Havainas. Most are over-priced and over-rated. These I love because they are ultra-comfy, contoured strap feels like you are walking on air and natural rubber conforms to the curves of the foot. For $4.99 – $5.99 MSRP, they are amazing. Available in solid colors and patterns.
5. HEMP Herbal Body Moisturizer. From Ginger Lily Farms Botanicals, HEMP is everything you want in a lotion and capitalizes on the hemp seed oil craze going on in America. Stunning packaging, awesome fruity banana fragrance and $9.99 MSRP that is less than half the price of the competition. 17 oz. and gallon size for the family.
6. EMMA Drench Cuticle Oil. EMMA is the buzz of the industry and let me tell you, the upcoming Las Vegas Spring collection is a winner-winner! Drench is all about sensory flavors for the brain and escapism with scents such as Coco Mango and Juicy Citrus. .5 oz. $5.00 MSRP.
7. THE WORKS Luxurious Shower Cap. Actually I love all our new shower caps from the ALL NIGHT to PEVA and linerless. However, THE WORKS is more than 6 months in the making and I would say the best shower cap all-time. $19.99 MSRP is a real deal for this masterpiece.
8. ForPro 510S & 910S Foil Sheets. OK so you ask yourself, how can anyone get excited about a foil sheet? I always like to tell the story of the first time pregnant woman who needs to buy maternity clothes. Up until that moment she had no idea where any maternity stores were. Foil sheets are sort of the same story, you have to use them to understand my excitement. Our ForPro 500S and 900S sheets are already best-sellers, so you might ask again, why 510S and 910S? It all has to do with the dimple design and true foil enthusiasts love certain dimple designs. And now, whether they love the embossed design or new dimple design, we have the foil! $7.49 – $9.49 MSRP
There are a few more fav’s that are still not in stock, so once in stock, I will share those with you next.