diversion sites. “Our policy is to stop
doing business with salons that are
selling to diverters,” Parenty says.
A common misconception is that
products sold in retail outlets are
less expensive than those sold in
salons. What Parenty has discovered
though is that products which have
been diverted are actually sold at an
average price of five to 10 percent
more than at salons because of tightened controls.
MOROCCANOIL
QUEBEC, CANADA
moroccanoil.com
Moroccanoil has invested enormous resources to prevent
and fight diversion. As the originator of professional argan oil
products for the hair, the company has become successful
because of its innovative, proprietary formulas with a built-in
anti-diversion focus. “The beauty professionals who carry
our products become hair doctors, prescribing the precise
amount, usage and techniques needed,” says company
President Ofer Tal. “We become active partners in business
with our salons, offering education, bimonthly promotions
and eye-catching displays to generate retail purchases. As
an independent manufacturer, we are not
interested in volume sales or any other type
of nonsalon distribution.”
To reinforce the seriousness of its
anti-diversion stance, Moroccanoil has
introduced an industry breakthrough:
a revolutionary anti-diversion tracking
technology that allows the company
to back-track and trace any diverted
product—even a single bottle placed on
the Internet—directly to the individual purchaser. More
than a hundred invisible tracking codes will be placed
on each bottle. “It will be impossible to remove or
disguise these tags without completely destroying the
label and removing any retail value to the diverter,” Tal
says. “Our legal team takes quick action to terminate
those caught diverting.”
To support its distributors and salons, Moroccanoil
consistently fights imitators who pretend to be the original
Moroccanoil brand, victimizing distributors, salon owners
and stylists by using bait-and-switch tactics. “Our eye-catching product packaging, color and logo were created
to support retail sales in the salon,” Tal says.
OPI
NORTH HOLLYWOOD, CA
diversionbusters@opi.com
OPI has spent tens of millions of dollars in the fight against
diversion to ensure that its professional-use products are
The company only guarantees products sold through
authorized channels, which do not include mass market
retailers, the Internet, drugstores or grocery stores.
OPI’s efforts to fight diversion include agreements with
distributors that prohibit the sale of OPI brand products
outside professional channels and coding
systems to help trace diverted products.
Additionally, the company pursues leads
it receives about the unauthorized sale of
OPI products. OPI has also instituted a
program to track down and take legal action
against diverters, including the use of private
investigators and lawyers. What’s more,
OPI maintains a dedicated staff with toll-free
numbers and an e-mail address to record and follow up on
diversion reports.
P&G PROFESSIONAL CARE
NORTH AMERICA
Graham Webb, Nioxin, Sebastian and Wella
Professionals
WOODLAND HILLS, CA
sebastianf ightsdiversion.com
While conventional wisdom says that diversion in the
salon industry can’t be controlled, P&G Professional
Care North America begs to differ. With the relaunch of
Sebastian Professional, for example, the company has
adopted a wholly new approach to product control, one
that helps prevent diversion before it happens and detects
products in unauthorized outlets. According to Nielsen
tracking, the company’s anti-diversion efforts are working.
Sebastian diversion is down 42 percent over last year. In
addition, all the major mass market Web sites have de-listed Sebastian from their pages because they can’t get
their hands on the product.
The company’s aggressive program to stop diversion
requires all salons to sign a binding agreement to abide
by its anti-diversion guidelines. “No sign, no sell,” says
Reuben Carranza, managing director, P&G Professional
Care North America. What’s more, if a salon diverts, it’s
cut off. State-of-the-art coding and tracking systems
can also determine the original recipient of any product
found in an unauthorized
retail outlet. “With the new
Sebastian, we’ve added
even more controls,”
Carranza says. Finally, the
company’s network of
auditors constantly visits
mass market locations
throughout North America
to locate its products in
unauthorized outlets.
