It was only a matter of time.
When Amazon decided to get into pro beauty, that was the first kiss of death for pro beauty trade shows. Virtually every big brand signed up much to the dismay of salons who for more than 40 years supported entrepreneurs by retailing their goods to their clients. The business was too big to pass up and they decided that the salon business wasn’t important enough.
As Amazon continued to expand its offerings, pro beauty offshoots started struggling. Now the brands were focused on advertising on Amazon, who needed magazines anymore? All the nail magazines folded; Modern Salon is down to 48 pages if that; and even the “blue” newsletter disappeared. The big brands that put the magazines in business all left.
Now the big brands that put the trade shows in business are gone as well. They no longer need to exhibit at a trade show to try to win over a salon, a distributor or a retailer. They have Amazon and most likely, Sephora and/or Ulta. Gone are the days that Paul Mitchell, L’Oreal (Matrix, Redken and such), OPI, and so many others will ever exhibit again.
Cosmoprof North America is being held next month in Vegas. The question you have to ask is, why? COVID didn’t go away and with the Delta variant, it is getting worse. In fact, Vegas is already asking everyone to wear masks. International travel still isn’t happening so forget international visitors which made up so much of the show. Who is going to exhibit that is newsworthy for an attendee? And bottom line, what information can’t an attendee get these days? All trade shows advertise the list of exhibitors so do you really need to attend? It’s no wonder why the Cosmoprof show floor is less than half filled and most likely, will be their last show.
Premier and ABS are in the same predicament. Who is going to exhibit and those companies that do, the question is again, why? The main attendees are booth renters looking to snatch up bargains but with inflation roaring and the supply chain gutted, attendees will be sorely disappointed when they don’t find bargains. There just isn’t any reason for these shows anymore.
The only show that matters today is amazon.com. We went to a mattress store and asked the sales person if they had the best price. “Yes of course” was the standard answer. “You can check online and we guarantee the best prices for at least 30 days after your purchase.” Jokingly I mentioned Amazon and he said they don’t offer the same services as we do. Just for shits and giggles I went to amazon.com and sure enough, they sold every bed Mattress Firm had on their floor at the same price with all the same services. Today, it doesn’t matter what the category is. Amazon is the show that matters.
Truthfully I am not going to miss any of the beauty trade shows. At one time when the real entrepreneurs of the business were exhibiting, threw parties and real innovation took place, they were a blast. But that excitement left more than ten years ago and beauty trade shows have been ghosts of their past ever since. COVID will finally put them to rest, R.I.P.
Sally Beauty Holdings (SBH) reported their latest quarterly results last week. The results were dismal enough to send the stock to a 52-week low. Is SBH a victim of the pro beauty industry, Amazon, terrible business plan or a combination of all three?
I recall vividly back in 1991 CND cut us off because full-service distributors didn’t like us shipping into their territory. Same thing occurred in 1997 with OPI. Back in the day full-service distributors ruled the world with exclusive distribution agreements that made them financially secure for life. Competition was non-existent.
During this time, Sally was buying OTC beauty suppliers . Sally grew quickly through acquisitions and became the dominant beauty retailer well before Ulta opened its first store. While Sally was creating a monopoly in its niche, the then CEO decided to start a new division that would eventually dominate the pro beauty side by acquiring as many as full service distributors as possible. Hence the creation of BSG/Cosmoprof. (L’Oreal got into the game late as it didn’t want BSG to control its brands so it started Salon Centric to compete and bought as many full service distributors as possible as well).
Fast forward to today and what to do we have? While Sally has more than 3000 stores, Sally’s business is declining. BSG/Cosmoprof is flat and that is with its monopoly on key hair care brands. In what used to be equal number of stores to DSC’s, stores are now more than 2/3 of the mix. Meanwhile virtually every distributor has been bought so growth is not an option through acquisitions.
Some say Amazon will buy SBH to get a foothold into the beauty business. Then again, anything is possible as Amazon ponders getting into medical/dental distribution, auto parts, fresh food and just about any business that has margin it can eat. Perhaps a more intriguing question to ponder is the fate of SBH the fate of the pro beauty business? One clue: The demise of DSC’s.
One thing is certain, SBH is in survival mode. Look no further than their email blasts advertising new lower prices, BOGO’s, 25% off everything and a deal of the day that makes one ponder what their pricing strategy really is. And here is the thing about today’s economy: No one cares if SBH survives or not, their products will always be available somewhere else with free shipping and two day delivery, sooner or later.
Thanksgiving is tomorrow and my favorite holiday of the year. Plenty of great food, family fun, sports on TV and the Turkey Trot. But what about Black Friday this year? Never before have so many retailers advertised weeks in advance their Black Friday deals. Add to the fact that there are no must have gifts this year, it’s going to be a shootout on the OK Corral. Who is going to win? Walmart for sure, the rest, we will see. Cyber Monday? Who else but Amazon? We are more conditioned to buy from Amazon than at any other time even with the economy firing on all cylinders. 2018 will certainly be a watershed year for many retailers. And as far as football goes, does Detroit have a chance against Minnesota?
I just got done watching Big Little Lies on HBO. The story focuses on parents in Monterey, CA that have first-graders. Who knew how much drama could come from six-year olds. No wonder stress and high blood pressure is at an all-time high.
And yes just in case you were wondering, pumpkin pie is still my favorite Thanksgiving dessert, candied sweet potatoes favorite side and a little dark and white turkey with a touch of gravy makes the perfect plate.