Taking a Stand
These companies are passionate about fighting diversion, and
they’ve implemented a number of policies that seem to be working.
Aveda has a zero-tolerance diversion policy, which has
resulted in a dramatic reduction in the unauthorized
resale of Aveda products within the last five years. The
effort of the Aveda
network has yielded a
steadily declining number
of complaints from its
and online retailers.
is the core of Aveda’s
brand equity,” says Emmanuel Rey, general manager,
North American sales for Aveda. “Aveda is proud to
partner with the best salons and spas in the world,
where guests receive product recommendations from
trained professionals and can shop safely for their favorite
products. Outside of our salon/spa partner locations
and Aveda Experience Centers, retail guests are not
guaranteed suitable product recommendations, nor do
they benefit from the value-added Aveda experience.”
More important, perhaps, Rey points out that products
sold through gray market channels may be over-aged,
adulterated or even counterfeit.
Diversion requires Aveda’s daily attention as well
as diligent and sustained preventative measures. The
company continues to audit its distribution to detect
any source of diversion. The Aveda Retail Supply
Agreement contains an anti-diversion clause; violation of
these terms results in the immediate termination of the
agreement. Aveda also reserves the right to buy back
inventory in the event of a salon closure for any reason.
While more than doubling the investigation of recovered
product, Aveda constantly implements the newest
product coding technologies, intensifying the tracking
and recovery of diverted product. Putting its money
where its mouth is, Aveda will reward $500 in cash
to anyone who supplies the company with verifiable
information as to a source of diversion.
L’Oréal Professionnel, Matrix, Pureology and Redken
NEW YORK, NY
L’Oréal Professional Products Division (PPD) has made
significant progress in its anti-diversion efforts over the last
year. Sales of PPD brands in diversion declined 29 percent
in the first quarter of 2009 versus the same period in 2008,
according to data from Information Resources, Inc. (IRI), a
leading global provider of consumer and shopper market
intelligence. “The numbers show that the controls L’Oréal
PPD has in place are really working,” says Pat Parenty,
president of U.S. brands for L’Oréal PPD.
In 2008, L’Oréal PPD introduced the Quality Guarantee
across all brands, the gist of which is that the company will
guarantee only those products sold in salons and spas.
Clients who are dissatisfied with a product’s performance
can present their receipt and receive a full refund within
four weeks of purchase.
“As a company, L’Oréal
PPD is 100 percent against
diversion,” Parenty says.
“We don’t condone it and
we don’t sell to diverters.”
Each division uses coding
and tracking systems
that were rolled out with
Redken in 1999 and make
it possible to see exactly
who sold the products to