Disintermediation in the salon industry refers to the removal of intermediaries between manufacturers (e.g., L'Oreal, Redken, Matrix) and consumers (our clients). As these manufacturers have expanded their distribution channels to include online retailers and brick-and-mortar stores, they have inadvertently disrupted the traditional sales model, which previously relied heavily on salon exclusivity.
Let's explain just a few of the contributing factors surrounding disintermediation:
Changing Client Behavior: Clients are increasingly turning to online platforms and retail stores for convenience and competitive pricing. Oddly, the reason given by research companies for this change is the observation of a shift in consumer behavior, and this has prompted manufacturers to explore new distribution channels to meet demand. While that may be how disintermediation may work in some sectors or pro and retail categories, in our case, it's the opposite. The only way a shift in consumer/client behavior can take place is if the products are, in fact, made available to them in the first place for there to even be a shift.
E-commerce Growth: The rise of e-commerce has opened up opportunities for manufacturers to reach a wider audience directly, bypassing traditional salon channels.
Market Competition: With the growth of online retail, manufacturers may feel compelled to compete directly with other beauty brands that have already established a presence in digital marketplaces.
Maximizing Sales Reach: Manufacturers are aiming to maximize their sales potential by tapping into various distribution channels, which may lead to increased revenue and market share.
To help navigate this situation and maybe regain some control over your career or business, here are a few high-level strategies worthy of consideration:
Education and Expertise Showcase: We have never been that good at leveraging our expertise and providing added value to clients through personalized consultations, customized services, and demonstrations of the proper use of professional products. That's a healthy fact. However, it's time to rethink that flip that on its head and look for ways to differentiate from the crowded space with the one weapon no manufacturer can replicate. The personal one-on-one relationship and ability to provide experience-based advice and bespoke tutorials. It's a long-game approach, but the advantages naturally emphasize the benefits of seeking professional expertise rather than purchasing products without guidance.
Enhanced Client Experience: Focusing on providing an exceptional client experience can help retain loyal clients. Offering unique services, creating a welcoming atmosphere, and establishing a strong sense of community can differentiate salons from online retail experiences. These may sound vanilla to you, and if so, that'll be an indicator that it's time to reinvent whatever it is you're doing.
Leveraging Local Presence: Another area of promoting ourselves that we've done averagely well but can be improved with a stronger local presence and community offerings. This will foster brand loyalty and attract clientele who prefer to support local businesses.
Online Presence and Marketing: Building a robust online presence through social media may seem obvious, and while yes, it's important, but without a professional website and e-commerce capabilities to help reach more potential clients, it may struggle to make any predictable and measurable results.
Exclusive Partnerships: Negotiating exclusive partnerships with manufacturers and vendors, emphasizing the value of collaboration, loyalty, and the benefits of being a preferred partner, is a smart cross-pollination initiative and feeds WOM word-of-mouth like no other initiative.
Value-Added Services: Diversifying service offerings beyond your current lineup can turn any business around. It can also evolve into an entirely different value proposition and add new profit centers into the financial and business model.
Advocacy and Networking: There's no surprise that we're (on average) well qualified in the social arena. However, getting involved as an advocate within an area of the industry, an association, or a great cause (like yougoodwith.pro haha) can rekindle any areas of lost enthusiasm and, without fail, always bring new clients into the environment. You can also consider networking with other salon owners to share knowledge, and best practices have never been more needed.
Direct-To-Consumer Products: It may be time to explore the possibility of creating your own branded products for retail, providing clients with exclusive options while expanding revenue streams.
By focusing on differentiation, customer loyalty, and embracing the digital landscape strategically, the salon and the industry can mitigate the impact of disintermediation and maintain its relevance in an evolving market. While it may not claw back the interpretation lost in the meaning of the word Professional, it's a start. However, it requires a combination of adaptability, innovation, and a strong commitment to providing value to clients beyond anything that has been offered in the past.