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.
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.
If there was a tell-tale hint of how Cosmoprof Vegas was going to be after Cosmoprof Italy back in March, the results speak for themselves:
Down, down and down.
Exhibit space down at least 25%. Attendance down at least 30%. New suppliers down at least 50%.
In the end I didn’t walk away with a single new item that got me excited. Sure, there were a few items that were unique and will sell here and there but nothing that indicated that this industry is on the verge of turning around.
This suits corporate America and private equity just fine. They just assume book a suite at the Four Seasons and meet in private. This way they don’t have to deal with exposing their products to people that couldn’t buy them anyway. Plus the cost savings are terrific and the food is better.
In the end, this show has become nothing more than the ability to meet several existing suppliers in a couple days, shake hands, comment on the show (always the same comments), have breakfast-lunch-dinner meetings and wonder why the show exists.
One thing Cosmoprof Vegas does well is intimidate those that attend. Once you are pre-registered and receive your confirmation, you have to walk a mile to get your badge. You must present a business card and photo I.D. If you forget either, you have to walk a couple miles to fetch. Then you have to walk to the badge holder booth and present more I.D. Then to get into the show, you have to present your badge and hope that their "Navy Seals" security force armed with barcode readers correctly reads your badge or else. At least in Italy you have to just insert your card into a machine and your free. I guess they don’t have enough attendees to afford that here.
Cost savings were evident virtually everywhere. Gone were the espresso machines, bottled water, sandwiches, snacks and other fun things. I did manage to snag a few M&M’s at the OPI booth.
I felt sorry for the suppliers that had to endure three days of torture. Yes, they signed up for it but you have no idea how painful three days can be sitting on a hard chair for 8 hours. When someone finally recognized me, they were so happy to spend a few minutes off their chair they even offered better discounts!
I can’t wait for next year. . .