Can a Salon-Exclusive Hair Care Brand ‘Volumize’ by Expanding to Amazon?
For years, the hair salon I go to exclusively carried KEVIN.MURPHY hair care products, with a large inventory on display and available in the store. The salon owner has been a loyal KEVIN.MURPHY supporter since long before I became a customer, more than 10 years. As a brand channel strategy example, KEVIN.MURPHY would have been a cut-and-dry “salon-exclusive” brand (no pun intended). Until recently, consumers could only officially purchase the products through authorized salons. And that’s where the trouble starts.
The owner of my hair salon surprised me by announcing that she severed ties with KEVIN.MURPHY. Lately, she’s lost business from product outages resulting from the June 2024 KEVIN.MURPHY US decision to partner directly with Amazon. Understandably, she also feels blindsided by the channel conflict caused by the abrupt change to the brand’s channel strategy.
Since the KEVIN.MURPHY brand was built as a salon exclusive, the US brand’s decision to partner directly with Amazon represents a dramatic shift in its channel strategy, and was too close a shave for our local salon owner.
KEVIN.MURPHY Brand Channel Strategy Example: Product Starting Point and Brand Pillars
Founded in 2004, the Australian brand KEVIN.MURPHY is now celebrating its 20th birthday. According to company lore, at age 22, Kevin Murphy created his first haircare products, developing a “lavender crème” blend that became the product “EASY.RIDER” and a setting lotion that become the product “ANTI.GRAVITY.”
In 2004, the first seven products were introduced in distinctive square bottles that “require less plastic and reflect his aesthetic.” These initial products were:
- ANTI.GRAVITY (lotion for volumizing and texturizing)
- MOTION.LOTION (curl enhancing lotion for fine hair)
- EASY.RIDER (defining anti-frizz crème)
- HAIR.RESORT (beach texturizer and curl enhancer)
- STICKY.BUSINESS (matte texturizer, firm hold)
- FRESH.HAIR (refreshening dry shampoo)
- ROUGH.RIDER (strong hold, moldable styling clay)
As of 2024, the KEVIN.MURPHY website boasts over 150 SKUs.
As the company makes clear, KEVIN.MURPHY products are expected to align with the KEVIN.MURPHY brand’s core values: fashion, performance, and environment.
As described in the company’s blog, these values come together to deliver “Skincare for Your Hare.”
“As a brand dedicated to fashion and driven by performance, KEVIN.MURPHY continues to focus on the Skincare for Your Hair philosophy and brings together quality ingredients in weightless formulas to deliver the best in modern luxury hair care.”
KEVIN.MURPHY Brand Channel Strategy Example: Professional Salon Channel Builds the Brand
As a salon professional brand, the brand channel strategy example for KEVIN.MURPHY was to sell exclusively through salons that are authorized to represent KEVIN.MURPHY.
The promise to the end consumer is that the salon professional (who knows your hair well from cutting it, styling it, and perhaps coloring it) is best-positioned to guide the end consumer to the appropriate KEVIN.MURPHY products that will deliver best for an individual’s hair and the style they are looking to achieve. This is a popular strategy for many professional channel brands. Other typical strategies include celebrity endorsement and influencer endorsement.
KEVIN.MURPHY provides five benefit areas for a consumer who patronizes the KEVIN.MURPHY salon:
- Personalized Hair Care Solutions
- Professional Expertise
- Innovative Color Services
- Experience the Full Range
- Sustainable Beauty
For instance, KEVIN.MURPHY’s promise of personalized hair care solutions is:
“Each strand of hair carries unique beauty and challenges. Our trained stylists in KEVIN.MURPHY partner salons understand this deeply. They leverage our extensive range of professional salon products to tailor a hair care regimen that’s as unique as you are. By assessing your hair’s specific needs, they unlock the perfect regimen of products to rejuvenate, strengthen, and style your hair.”
Becoming a KEVIN.MURPHY salon has clear requirements, including contacting the firm, demonstrating that the salon is aligned, and more. Our local hair salon was proud to offer the KEVIN.MURPHY line, and the entire salon aesthetic signals natural, beautiful and beach-inspired, with the KEVIN.MURPHY products formerly occupying a large part of the available space in the retail area.
By 2018, KEVIN.MURPHY sales were reported by Inc. 5000 at $90.5 million, up 22% in one year from $73.4 million in 2017.
At that time, Rick Kornbluth, then CEO of KEVIN.MURPHY said,
“That, combined with protecting our brand from diversion, ensures we support our loyal salon base while protecting the brand’s salon-only positioning, leading to our continued incredible growth. This brand is so special because of the dedicated global team and the unbelievable loyalty of our stylists and their customer”
From this statement, it’s clear that KEVIN.MURHPY experiences diversion, which arises when a brand’s products are sold without permission by an unauthorized party. Despite these challenges, KEVIN.MURPHY remained committed to the salon channel exclusive strategy.
KEVIN.MURPHY Brand Channel Strategy Example: Channel Conflict from Unauthorized Sellers and Business Slowdown
While no public numbers are available, 2024 estimates for KEVIN.MURPHY sales range from $97 to $101 million. Unlike the rapid growth from 2017 to 2018, this current revenue estimate implies KEVIN.MURPHY brand grew just 12% in the six years between 2018 ($90.5 million) and 2024.
There are likely several reasons for the slowdown in KEVIN.MURPHY brand growth in recent years including:
- Flat to declining salon channel in terms of number of salons means there are fewer places to sell the product
- Diversion of KEVIN.MURPHY brand products and unauthorized discounted sales by third parties on Amazon, as well as Walmart
- Other factors such as innovative competitors, or economic slowdown
The salon exclusive channel propelled KEVIN.MURPHY’s growth and initially made it an impressive brand strategy channel example in the space. But operating a profitable hair salon is a challenging business, with an estimated 80% failing within the first 18 months of opening. So, while there are many hair salons in the US (estimates range from 440,000 licensed salons to 900,000 or more), building a sustainable business in the salon channel requires working with the 20% of salons that succeed. In the case of premium brand KEVIN.MURPHY, the salon’s clientele needs to prioritize spending more on hair care products, further reducing the available salon partners for the brand.
KEVIN.MURPHY may have expected the US market to be more like its home market of Australia. This country only has approximately 26,000 hair salons in 2024, but a comparatively-smaller 27% of these salons closed their doors in the last year.
Overall, even if the US salon channel is flat in terms of number of stores, frequency of store visits can be down, resulting in sales declines. Even some luxury customers may choose to stretch out their salon appointments, if they feel they need to cut corners. We’ve seen this in other hair care categories. In the economic downturn, customers stretched out their hair relaxer appointments to save money. All of this means fewer sales through salons. Consumers may also be willing to try out value products. As Insight to Action wrote about in this positioning strategy template, drugstore shampoo brands are staging a comeback, with a focus on luxury shoppers.
Diversion and unauthorized selling of products are a second huge growth challenge for KEVIN.MURPHY and many other brands. For example, KEVIN.MURPHY’s competitor brand Olaplex was sold at Walmart in 2023, despite having a stated policy of not selling in grocery or mass retail. Said Olaplex CFO Eric Tiziana (about the Walmart sales of Olaplex):
“What you’re seeing there is a diverted product into those customers. This is very common in the professional hair care category; you’ll see other brands in those channels through diversion as well. We have levers that we do seek to pull legally, operationally…and we intend to root that out. It’s not easy to do overnight.”
Third-party sellers on Amazon are a prime example of unauthorized selling. In general, third-party sellers are 68% of Amazon sellers, and 60% of Amazon sales. These sellers, many of whom are not authorized by KEVIN.MURPHY, routinely undersold the authorized KEVIN.MURPHY salons on pricing, along with offering Amazon delivery convenience. Keep in mind that Amazon controls 38% of all ecommerce, so this one retailer alone can easily damage a brand like KEVIN.MURPHY.
As of June 2024, KEVIN.MURPHY identified 340 unauthorized sellers offering KEVIN.MURPHY products at up to 35% lower than MSRP. KEVIN.MURPHY decided to reverse its long-standing channel strategy and to sell directly on Amazon.
Here is an excerpt from the communication that KEVIN.MURPHY sent to its salons recapping the brand’s change in channel strategy.
“June 21, 2024
Dear Valued Salon Partners,
Today, we want to share an important update regarding the future of KEVIN.MURPHY and our ongoing efforts to protect and elevate the brand, as well as your business. After years of resisting the presence of our products on Amazon, we have come to a pivotal decision. Despite our best efforts, the challenges of unauthorized discounting practices and counterfeit products have continued to threaten the integrity of our brand, and more importantly, the success of your salons. Currently there are more than 340 unauthorized sellers offering KEVIN.MURPHY products at prices up to 35% lower than MSRP. We have realized that the most effective way to combat these issues and ensure the protection of our products is to partner directly with Amazon. The decision was not made lightly, but is necessary to take control of how our products are presented and sold online.”
For my local salon owner, this was the third and final red flag that signaled she should end her 10-year-plus partnership with KEVIN.MURPHY.
Before this final red flag, a major source of pain was the experience of a loyal salon customer who asked for her KEVIN.MURPHY product refill after salon services. Unfortunately, the salon was out of stock, despite trying to place the order. The store owner found that KEVIN.MURPHY stock was no longer available to ship from her distributor, so that every time she tried to order, products were “not available for delivery” or “available for pickup only in store at Beauty Solutions Orange County.” On her next salon visit, the customer stated she bought online, as it was easily available, and she did not want to wait for the salon to get the product back in stock.
KEVIN.MURPHY Brand Channel Strategy Example: Future
It will be interesting to see how the KEVIN.MURPHY channel strategy decision plays out in the brand’s future marketplace performance. Will the brand restart its growth? Or will salons shift customers to different brands?
In the communication with the salons, one of KEVIN.MURPHY’s brand’s promises is to set Amazon prices $1 higher than MSRP pricing to protect the salon partner (on the official Amazon listing). However, this price protection means little to the salon owner if the product is not available to keep in stock.
It’s also unclear how much priority salons have for product availability compared to Amazon or other choices. The brand may be evolving to a strategy of prioritizing a smaller number of salons. So far, it does not appear to be capitalizing on the retailtainment potential for events in stores with that potential. With its runway and beauty magazine heritage, the brand has potential for retailtainment, but there is no evidence it is moving in this direction.
As far as the shift to Amazon partnership, KEVIN.MURPHY is still committed to the salon-only strategy in the UK:.
“While we support KEVIN.MURPHY decision to partner with Amazon in the USA, which aims to prevent product discounting, counterfeiting, and to ensure accurate product descriptions, benefits, and ingredients, KEVIN.MURPHY products will not be officially available via Amazon.co.uk, or any other similar platforms, in the UK.
Any KEVIN.MURPHY products found on Amazon.co.uk, are not supplied through Sweet Squared, the only authorized distributor in the UK. Additionally, none of our affiliated salons are permitted to sell products via third-party websites such as Amazon and any product discovered on these platforms can be considered unauthorized and second hand.“
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