Out Of My Mind On A Friday Mornin’

Did you buy a Lotto ticket for the big game?

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So what is the big deal of the Lotto getting to $650 million? It’s not enough to win $300 million? The chances of winning are about the same as getting not one, but two holes-in-one in an 18 hole round. I have yet to get one and I have yet to get a Royal Flush playing Texas Holdem. Yes, we had to buy a few tickets to join the party or as one person told me, “To get a foot in the door.” I learned that for best odds, pick your own numbers. Good luck to all!

No doubt if you won the Lotto you would not pick up a penny if you saw one on the ground. But would you anyway? Chances are no. Now if Canada has its way, its residents won’t have to worry about the dilemma anymore as it wants to ban the penny much like other countries have. They state it cost them $.016 to produce a penny and they lose over $10 million a year. But if they won the Lotto. . .

Best Buy is getting crushed by amazon.com and other online retailers. They are closing 50 stores and most likely many more in the future. This is a bad sign for big box retailers as Best Buy is one of the best run retailers in the world. If they can’t make it, who is going to be left, Starbucks and Five Guys? It seems consumers no longer need a physical store to buy electronics and other gear or perhaps only to “shop” and then order online while at the store. It’s an interesting phase we are now in.

CVS found out the hard way just like Best Buy did a few years ago that breaking into the beauty market is not so easy. They have decided to shutter their 360 concept after testing it with 25 stores. ULTA is the grand prize winner and will continue to dominate the landscape. Their stock is pushing $100.

Good to see Michigan’s unemployment under 9% and the auto companies doing well. But hopefully everyone has learned their lesson and Michigan diversifies and education picks up its pace.

Are you loving the new Timeline homepage on Facebook? Not!

black 15in1 launches its refill size of Miracle Hair Treatment next month by popular request.

Beauty Buzz will be all the buzz come October. Beauty Buzz is all about beauty and will feature some great names in the business. Jay Towers will be the emcee and Ambassador magazine will cover the event top to bottom. Look for more information coming up. The event is Sunday, October 7 at the Motor City Casino Hotel.

Speaking of events, we are holding the greatest salon equipment and furniture sale in history. In fact, virtually every item in our showroom will be for sale and/or auction. If you need a new styling chair or to outfit a new salon, this is the event you have been waiting for. Monday, May 14 at the Pavillion. The fun starts at 8AM.

Of all the companies that offer TV, Internet and Phone, ATT’s U-verse ranks at the bottom. There is not another company with such poor customer service to go along with poor performing products. When Comcast looks good, you know how bad is bad.

Happy Friday!

Out Of My Mind On A Friday Mornin’

Did you buy a Lotto ticket for the big game?

View Results

So what is the big deal of the Lotto getting to $650 million? It’s not enough to win $300 million? The chances of winning are about the same as getting not one, but two holes-in-one in an 18 hole round. I have yet to get one and I have yet to get a Royal Flush playing Texas Holdem. Yes, we had to buy a few tickets to join the party or as one person told me, “To get a foot in the door.” I learned that for best odds, pick your own numbers. Good luck to all!

No doubt if you won the Lotto you would not pick up a penny if you saw one on the ground. But would you anyway? Chances are no. Now if Canada has its way, its residents won’t have to worry about the dilemma anymore as it wants to ban the penny much like other countries have. They state it cost them $.016 to produce a penny and they lose over $10 million a year. But if they won the Lotto. . .

Best Buy is getting crushed by amazon.com and other online retailers. They are closing 50 stores and most likely many more in the future. This is a bad sign for big box retailers as Best Buy is one of the best run retailers in the world. If they can’t make it, who is going to be left, Starbucks and Five Guys? It seems consumers no longer need a physical store to buy electronics and other gear or perhaps only to “shop” and then order online while at the store. It’s an interesting phase we are now in.

CVS found out the hard way just like Best Buy did a few years ago that breaking into the beauty market is not so easy. They have decided to shutter their 360 concept after testing it with 25 stores. ULTA is the grand prize winner and will continue to dominate the landscape. Their stock is pushing $100.

Good to see Michigan’s unemployment under 9% and the auto companies doing well. But hopefully everyone has learned their lesson and Michigan diversifies and education picks up its pace.

Are you loving the new Timeline homepage on Facebook? Not!

black 15in1 launches its refill size of Miracle Hair Treatment next month by popular request.

Beauty Buzz will be all the buzz come October. Beauty Buzz is all about beauty and will feature some great names in the business. Jay Towers will be the emcee and Ambassador magazine will cover the event top to bottom. Look for more information coming up. The event is Sunday, October 7 at the Motor City Casino Hotel.

Speaking of events, we are holding the greatest salon equipment and furniture sale in history. In fact, virtually every item in our showroom will be for sale and/or auction. If you need a new styling chair or to outfit a new salon, this is the event you have been waiting for. Monday, May 14 at the Pavillion. The fun starts at 8AM.

Of all the companies that offer TV, Internet and Phone, ATT’s U-verse ranks at the bottom. There is not another company with such poor customer service to go along with poor performing products. When Comcast looks good, you know how bad is bad.

Happy Friday!

ULTA Plows Ahead Seeking Salon Product Domination

Which store is your favorite retail beauty store?

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Trade Secret had the opportunity and blew it. Beauty First thought they had the right idea but they didn’t. Sally thought about it but understood its market position and wisely maintained it.

ULTA on the other hand with the backbone of Lynn Kirby fought and fought in the same battlefield and came out the ultimate winner. First known as Ulta 3 when they started in 1990, ULTA now commands the market, has upwards of 450 stores and plans on adding another 550 over the next few years. Each store is 10,000 sq.ft. and offers a 950 sq. ft. salon for services. Read more about ULTA here.

It wasn’t too long ago that their stock was less than $10 a share. Today you can’t buy it for less than $75. So what is the compelling story that made ULTA succeed when so many of its contemporaries failed? Kirby understood consumers.

Think back to the late 70’s and early 80’s when the first real wave of retail salon products arrived. This was the period of Paul Mitchell, Matrix, Nexxus, Aveda, Redken so many other brands. These brands were developed by hairdressers and sold exclusively to local salons. It was the birth of salon retailing. Soon salons outside their local markets wanted the products and the expansion of full service distributors evolved. Those lucky enough at the time to land one of these brands was set for life. Nexxus distributors ended up owning private jets they made so much money with the brand. Distributors couldn’t hire enough salespeople and open stores fast enough to satisfy the demand. It was a feeding frenzy.

This drove other hairdressers to develop their own lines and we saw the likes of Sebastian, ARTec, and dozens others. Money and profits were free-flowing and the party was huge.

But alas in the 1990’s and early 2000’s, like so many other industries, greed and market domination took hold. But the overwhelming trend that no one spotted was that salons didn’t focus on retail products even with their monopolistic position. Sure they loved the brands they used but it wasn’t their focus to sell them. As manufacturer’s grew along with marketing and promotional campaigns, consumers demanded salon products more than ever. But they weren’t happy with their choices where to buy the brands they wanted since salons focused on the brands they wanted to carry instead of the brands consumers wanted them to carry.

Most likely this is what caused the beginning of diversion. Manufacturers said to themselves, “Hey, we got a huge market and we need to position our goods so consumers can buy our products.” Retailers such as Target, CVS and Walgreen’s craved salon products because consumers came into their stores looking for them. One innovative company understood all this and became the pioneer in the diversion movement and to this day, continues to be the leader (no, not ULTA). Diversion suddenly became a huge issue but the uncanny thing about this was that salons cared but they continued to carry the same brands that were diverted. As manufacturers learned this, they thought, “Heck, if salons complain but still carry my brand, why not continue?” And they did.

During all this, ULTA strategically decides upon its business model. Kirby learns from Trade Secrets that if we have a working salon in our retail space, we can sell EVERY professional brand to consumers that we want. Unlike salons who chose brands that they had to personally like to use or retail, ULTA knew firsthand that was nonsense. The only thing important to ULTA was to carry brands consumers wanted to buy. That was the thinking that changed everything.

Today while diversion is alive and well, it’s not the key subject in the industry. ULTA changed that.

Walk into an ULTA store today and you will be amazed at the number of professional brands they carry from hair care to nail care to appliance and everything in-between. They are now getting into “Sephora” type goods which will make them even more of a powerhouse. And with their superior marketing strategy including daily email blasts, discounts, loyalty programs, free shipping and much more, how will anyone compete with them moving forward?

Salons can no longer carry all the brands consumers want, there are too many and ULTA owns the market. Listed are some strategies salons have adopted:

  • Focus on services and maintain a non-commitment to retail
  • Focus on “exclusive” brands such as Kerastase, Bumble & Bumble, and Oribe
  • Focus on niche brands new to the marketplace not sold at ULTA

Believe it or not, even when ULTA does get to 1000 stores, they will only represent less than 1% of the salon universe. This suggests that salons still have a competitive advantage much like a locally owned restaurant has over a chain. But like the locally owned restaurants that compete with chains, even though the owner/chef may not eat burgers, fries and pizza, they know their customers can’t get enough of it. Salon owners as well will need to change their mindset and start offering brands that consumers want to buy regardless of what their likes or their stylists likes are.

Two brands that are perfect examples of this include Morocannoil and black 15in1. Morocannoil is not sold at ULTA. Demand from consumers is intense. Every smart and savvy salon using the new paradigm should sell Morocannoil and become a Moroccanoil Loyalty Salon. The opportunity for salon owners is limited and they must jump on the bandwagon when they can and cash in.

It took industry pioneers to launch salon retail products. It will take industry pioneers in 2012 to rethink salon retailing philosophy and in doing so, they too will make a killing. The landscape is set and ready for take-off.

Happy Thursday!

ULTA’s Signature Brands

 

Welcome to Mardi’s Gras or Fat Tuesday. It’s also the day of eating 500 calorie fat bombs known in the Polish community as Paczki’s.

Recently I strolled through ULTA to see what their latest signature brands were. As I walked through the store (there was one other customer), I noticed that a good 25% of the items  were out of stock. ULTA is no Sephora when it comes to merchandising.

Pro hair care represented more than half the store which makes ULTA the biggest threat to salons. Their signature brands were all L’Oreal especially REDKEN and MATRIX adorned on the back wall. They had more hair dryers and flat irons than some of the manufacturers we buy from. Signature brands were Helen of Troy and Revlon.

OPI was certainly the signature brand when it came to nail care. The Hong Kong collection was displayed at the entrance and at the polish section. OPI itself was larger than all the other nail brands combined. Essie had many colors available but  mostly out of stock. CND color was not sold but their treatments were.

Skin care was a hodge podge and they are certainly weak in this area. DDF and Dermologica was the signature brands but neither stood out well. Make up also seems to be a work in process but certainly Bare Essentual’s was their signature brand.

Most surprising was their private label. In all categories, it was scattered and not well stocked or merchandised. I wonder what percent of their business is in this category.

Oddly, they are also carry many Target and Wal-Mart beauty brands and these too are not well stocked. What is odd is that prestige brands have allowed themselves to be sold with mass brands. Perhaps desperate times call for desperate measures but long term, I wonder.

No doubt women walking into ULTA are looking for salon wet goods, nail color and appliances. This is where they shine. Salons have the ability to compete by offering bi-monthly deals and having a nice, tight retail area. ULTA pricing on open stock items is the same as salons so salons can’t complain in that area. The complaint is the constant promotions ULTA offers. We offer plenty of the same promotions ULTA does so the resources are available.

ULTA is a work in progress. More importantly, ULTA is a wake up call to our industry. It’s time that we respond.

Happy Tuesday!

ULTA’s Signature Brands

 

Welcome to Mardi’s Gras or Fat Tuesday. It’s also the day of eating 500 calorie fat bombs known in the Polish community as Paczki’s.

Recently I strolled through ULTA to see what their latest signature brands were. As I walked through the store (there was one other customer), I noticed that a good 25% of the items  were out of stock. ULTA is no Sephora when it comes to merchandising.

Pro hair care represented more than half the store which makes ULTA the biggest threat to salons. Their signature brands were all L’Oreal especially REDKEN and MATRIX adorned on the back wall. They had more hair dryers and flat irons than some of the manufacturers we buy from. Signature brands were Helen of Troy and Revlon.

OPI was certainly the signature brand when it came to nail care. The Hong Kong collection was displayed at the entrance and at the polish section. OPI itself was larger than all the other nail brands combined. Essie had many colors available but  mostly out of stock. CND color was not sold but their treatments were.

Skin care was a hodge podge and they are certainly weak in this area. DDF and Dermologica was the signature brands but neither stood out well. Make up also seems to be a work in process but certainly Bare Essentual’s was their signature brand.

Most surprising was their private label. In all categories, it was scattered and not well stocked or merchandised. I wonder what percent of their business is in this category.

Oddly, they are also carry many Target and Wal-Mart beauty brands and these too are not well stocked. What is odd is that prestige brands have allowed themselves to be sold with mass brands. Perhaps desperate times call for desperate measures but long term, I wonder.

No doubt women walking into ULTA are looking for salon wet goods, nail color and appliances. This is where they shine. Salons have the ability to compete by offering bi-monthly deals and having a nice, tight retail area. ULTA pricing on open stock items is the same as salons so salons can’t complain in that area. The complaint is the constant promotions ULTA offers. We offer plenty of the same promotions ULTA does so the resources are available.

ULTA is a work in progress. More importantly, ULTA is a wake up call to our industry. It’s time that we respond.

Happy Tuesday!