American Salon July 2012 : Page 130
Mission Possible Mike Kennedy, Aveda’s vice president of global trademark protection and diversion control, takes us inside one of the industry’s most effective anti-diversion efforts. technologies you’re using, and how that helps Aveda track and recover diverted products? A: We have developed a proprietary overt and covert coding technology that is virtually undefeatable in the gray market. This technology enables us to trace products retrieved from unauthorized sources directly to the distributor, salon or store that has diverted them. Q: Aveda’s distribution and retailing practices, by their nature, provide a very effective barrier to diversion. Can you give us a historical perspective on that? Was anti-diversion a part of the strategy from the beginning? A: About 10 years ago, diversion started to become a significant problem for the Aveda brand. We were ranked in the top 20 of the BIF Nielsen Survey of Professional Brands and our products started to appear on the shelves of unauthorized retailers such as Target. At that point, Dominique asked me to head up the anti-diversion activities for the brand and to form a team to combat this problem. We took a look at our processes and retail agreements with our network and made changes to clearly state our zero-tolerance policy. We put tight audit procedures in place so our customer service team notifies us of any atypical spikes in order patterns. We also began a training process for our field representatives to raise the awareness of signs of diversion as they visit their accounts and make them partners in our efforts to combat diversion. These measures have paid great dividends for our brand. We’re very proud to say that today Aveda represents .2 percent of diverted professional products sold at unauthorized retailers, according to the Nielsen survey. Q: So you now have a group within Aveda specifically dedicated to this issue. A: Yes, we do. We have a small, cross-functional team that collaborates continuously to identify possible sources of diversion. Together with this small team, our entire network is invited to anonymously report any such activities via a dedicated e-mail address, stopdiversion@aveda. com, or through a toll-free phone line 877/972-8332. A reward is offered for verifiable information that leads us to the source of diversion. We keep our network informed of our progress and successes via our once-or twice-yearly State of Diversion letter. Q: Are there new gray-market channels that are presenting challenges for manufacturers? A: Yes, we’ve noticed a shift from unauthorized brick-and-mortar retailers to e-commerce. We’ve made the proper adjustments to our tracking procedures to put more focus on these types of sites as a result. We have some amazing technology in place to help us with this shift. Mike kennedy Q: Why is diversion an important issue for salon owners and beauty professionals? A: Diversion—the resale of Aveda products in unauthorized channels—directly competes with the salon owner’s livelihood. Aveda is sold through the recommendation of qualified professionals. In unauthorized retail channels, the consumer can never be sure that they’re getting the right products for their particular needs or that the products they’re buying are not over-aged or adulterated. Q: What does your zero-tolerance policy involve and what are the consequences of violating it? A: Our zero-tolerance policy, endorsed by our president, Dominique Conseil, states that Aveda has the right to terminate our relationship with any customer who violates the terms of the retail agreement for any reason. This includes diverting Aveda products to unauthorized resellers or collectors. Q: Can you tell us more about the advanced product-coding 130 American Salon July 2012
Publication List
Using a screen reader? Click Here
