Cosmoprof North America show is only a couple months away and less than 50% of the booths are sold. Most of the “exclusive” areas like natural, CBD and others are empty. None of the major hair or nail companies are exhibiting. Can anyone tell me why the show is still going on and who will possibly attend? Cosmoprof is a true indicator of the professional beauty market and its demise. This show used to be held twice annually due to demand, new manufacturer’s entering the space, new distributors excited to sell to salons and overall growth of the industry.
What factors precipitated the demise of the pro beauty industry? I have been on this subject for a few years and it is so sad because this was once a vibrant and exciting industry. Why? It featured entrepreneurs eager to get their new products into the market; entrepreneurs went to beauty school to learn their craft whether it be hair, nails or spa and then went to open full-service salons; consumers eager to enjoy being pampered and spending time and money on beauty services and products.
Eager to cash in on the explosive growth was retailers. Diversion was already a big issue but never controlled as manufacturers loved the extra sales. Diversion was the first nail in the coffin. Then Sephora opened in 1998, Amazon Pro Beauty in 1999 and Ulta in 2000. This was the second nail in the coffin.
The third nail in the coffin was the manufacture rep groups, the same ones that called on distributors (and ironically still do). They saw the opportunity with the Big 3 and went after them. When this happened, diversion was no longer an issue for manufacturers, they went direct and controlled their products and prices. Who got screwed? Distributors and salons. Call it greed, call it whatever you want, bottom line, it’s business.
Fast forward to today and what is state of the pro beauty business? Most full-service salons are at 50-60% capacity due to the fact so many of their employees quit and moved to booth rental and even more recently due to the pandemic, work at home. Many salons have closed. Salons and spas are begging for nail techs and massage therapists. Spas that are open are only open for limited hours due to staffing issues. Salon retail is dead in the water. As I predicted long ago, services are what matters and demand for services, especially at the high end, are as good as ever.
Amazon shares are now on sale for less than $2500 a share and you don’t have to be a Prime member to buy them. What happened? They reported their slowest sales growth since 2001; Bezos bet a few billion on Rivian and that bet failed; supply chain and inflation issues; and overcapacity. However they are on track to crack $450 billion in sales this year and most likely $500 billion in 2023. Their cloud business is still soaring and their advertising unit is mostly all profits. If there is any company I would not bet against, it’s Amazon.
It’s time for a commercial break and here is one of our latest products that I love, love, love. ForPro Expert Reusable 100% Organic & Bamboo Cotton Pads are best in class and actually made with certified organic cotton. I did a bit of research and found that virtually all reusable cotton pads that claim to be organic are not. Same goes with cotton rounds. These are now available!
I was at Kroger shopping and checking out baked Frito Lay chips and a Frito Lay stocker was in the aisle. I picked up the bag of chips for $3.99 and said to him that bag is so small, it’s like a snack bag now. He said to me, “July 1 we have another price increase coming” and he couldn’t tell me if the bag was going to get smaller. Brownberry bread is over $5.00 a loaf. Food inflation is here.
It’s no wonder large chain restaurants are doing well. In some instances, it’s cheaper to go out if you don’t order alcohol. Chains have buying power and are better at keeping employees. Alas, small restaurants and small chains are closing at a record pace and this is after they survived the pandemic.
If a Supreme Court document is leaked, is anything sacred and trustful anymore?
Trump is licking his chops after a couple nice primary wins. If you had your choice of Trump or DeSantis, who would you choose?
Have you thought about chartering a bus? Don’t! Here is another industry decimated by the pandemic. What once cost $3000/month to insure a bus is now more than $7,000/month. Diesel is more than $6/gallon but the real pain is that there are no bus drivers around. It’s not like Generation Z kids are graduating high school and bragging that they are going to be a bus driver. Average pay is $200/day regardless if the driver drives two, four or eight hours and some companies are paying $300 and over just to get drivers. But even at that, they can’t find them.
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.
As the only professional only beauty show to the trade in N.A. I was excited to see the new redesign of the floor plan and see what new excitement show management would bring. After all, the HK show is 5 times larger and Bologna, although not as impactful as in years past, still more significant than N.A.
Alas, the changes were both peculiar and “cosmetic” at the same time. The show floor was divided into three sections: Professional; Retail; and Packaging. Pretty much the same exhibitors were scattered on the show floor in different locations. Peculiar was the fact they had these “incubator” beauty companies that were launching at Cosmoprof. Their location was in the main aisle with significant signage and marketing focus. Apparently the exhibitors that had multiple booth space were secondary in importance. Further it made the show feel like a shopping mall: Kiosks outside retailers trying to sell knick-knacks of all sorts. It certainly dumbed down the significance of the show.
For exhibitors Cosmoprof continues to fail to impress compared with other national Top 200 shows. The aisle carpet didn’t even come close to touching the booths which created many tripping hazards. Access to water and coffee is through stands only at $5 a pop. And why the show is open on Tuesday is dumbfounding since only exhibitors are walking the show floor.
The relocation of exhibitors was not understood. And why rep groups earned the best location is an interesting take on the industry. No other Top 200 show allows rep groups on the show floor and why Cosmoprof allocated so much space for them is questionable. Also unlike top shows, exhibitors are not given a pre-show registration list of show attendees with their email address and company information. This show is still geared more towards a typical cash and carry show.
With Mandalay Bay doubling down its convention business, space will be available for a much larger show. However I don’t see the show growing and in fact, the allocated space was not used. The continued policy of allowing companies to take suites off the show floor again downgrades the importance of the event. It’s time for all companies to be required to be on the show floor and allow attendees to stay on the show floor and not run to meetings off-site.
Another reality is that NAHA still takes place during Cosmoprof. Why? Further, salons are allowed on the show floor if they are PBA members. Why? It’s still not clear what Cosmoprof N.A. really wants to be.
One thing for certain is that beauty is more important than ever and will continue to grow. Retailers are increasing their space for beauty. Distributors are seeking products to take over the business from legacy companies. And with Coty’s acquisition of P&G brands, the industry is prime for a make-over.
This weekend is the 15th Cosmoprof N.A. show in Vegas. Diehards still call it the BBSI back in the days when new products were introduced and companies tossed extravagant parties morning, day and night.
The show has always been a marketplace for manufacturers to show off their latest offerings to distributors. But alas two things have happened over the past few years. One, manufacturers have fewer new products to offer and two, there are hardly any distributors left to walk the aisles. Last year was a tipping point with more booths for Asian companies than ever which left many wondering what would be next.
As a “reinvention”, Cosmoprof is tossing out the old layout of the show floor and has created a new layout for 2015. Now there will be only three sections. One for companies focused on professional goods for hair, nails and skin. One for companies that produce machinery, packaging and other raw materials. And finally the third one: For companies that sell goods for retail. Bye-bye distributors, hello retailers.
Now for those in the know, and retailers are certainly more in the know than most, there already are plenty of events and shows for them to attend that sell beauty products. But since Cosmoprof needs more traffic to sell booth space, it had to do something to get more people walking the aisles.
And since Cosmoprof is connected with PBA (Professional Beauty Association), this is the final leg of the conversion of our industry. Most likely, the PBA will need to rename itself to PRBA (Professional and Retail Beauty Association).
What this means for companies that sell both professional-only AND retail products, I have no idea. Since the show floor is small and contained in one room, most likely established companies such as Helen of Troy will claim their old space and be open for business regardless who walks by just as they have done all along. But it will be interesting to see what happens.
The other question of course is what new companies will buy booths for the retail area. Just think of all the companies that supply Sephora and Ulta.
Alas, it anything truly professional anymore? Every brand is sold at Amazon and numerous brands are sold at Sephora and Ulta. They are true merchants. Mass drug retailers are expanding their beauty footprints as well.
Time will tell the future as it always does. For now, Cosmoprof 2015 will be yet another watershed event for professional beauty as we once knew it when it was BBSI.
On a side note it will be very strange indeed to walk into the OPI meeting room without George, Bill or Suzi’s presence. I wonder if they will still have the expresso counter. Life moves forward.
I had the best time at Cosmoprof North America (CPNA) in my over 20 years attending. I can attribute this to 3 reasons:
- We have been liberated. With no sucking up to global companies at debilitating meetings, there was no stress.
- I did not walk the show floor aisle by aisle. In fact, I didn’t even walk the show floor although it was the smallest ever.
- All the action was in private meetings held at hotel suites far away from the show floor. Between Kemon, Label.m, Michael O’Rourke and a few others, I can sense this incubator of new and fresh ideas paving the way for the next generation.
The show floor saw fewer exhibitors and attendees than ever before. CPNA is an embarrassment to its flagship show in Bologna. I felt sorry for the huge number of China, Korea, Taiwan and Italy stands that tried to do some business.
The big booths catered to retail customers such as ULTA, Sephora and chain drug. Although either CND or OPI were on the floor, the nail category took up a sizeable amount of space. There wasn’t much else that was noteworthy.
Even the rep groups see the handwriting on the wall. While they still had booths on the floor, most of them were running around the Four Seasons, Mandalay Bay and the Hotel going to meetings. They are desperate for new blood and it was quite scary considering it was daytime.
Salons were around for NAHA but why CPNA and the PBA ties the two events together is still a mystery.
But we do need to thank CPNA and the PBA for bringing distributors to Las Vegas to do business over a 2-3 day period even if it’s not done on the show floor. I’m already looking forward to next July 24-26.