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Top beauty industry executives gathered at the CosmoProf North America (CPNA) 2013 convention held in Las Vegas NV on July 14th-16th. Originally, a lose gathering of distributors, this event was the 11th convention in its current form. Over the years, CPNA has become the cornerstone of the industry, the go-to-place where trend setters meet. A destination to not only be part of the expo floor but also be part of the meetings, the socializing, the networking, the gathering, the coming together of an industry. It is without a doubt the key instrument in bringing together otherwise a fragmented industry. CPNA is organized by North American Beauty Events, a joint venture between Bologna Fiere Group, a leading Italian-based organizer of international trade shows, and the Professional Beauty Association (PBA), North America’s largest and most influential beauty trade association. The convention provided an opportunity to talk to Steve Sleeper, executive director of the PBA on the state of the beauty industry and its importance in the broader economy. Here is a summary:
Pari Esfandiari: Over the last decade technology has caused fundamental change and disruption in some industries. How did it impact the beauty industry?
Steve Sleeper: There is not a disruption here, for sure; it has only become an aid. When I think about my small salon and spa business owners, the technology has helped them run their businesses better. There are improvements in terms of online booking and appointment setting and inventory management, and some of the financial controls that were lacking. They’re able to see their business in a whole new light. In terms of distribution, it’s made them more efficient, they have implemented warehousing technology, shipping technology and managed to reduce their costs. For big manufacturers, it’s all about their R&D, and for our smaller companies, I think it allowed them to go to market easier and cheaper.
Pari Esfandiari: What about the impact on creativity and innovation?
Steve Sleeper: I am not the best expert on the subject, because PBA deals with the business side of what manufacturers are involved with, not typically their laboratories or their R&D. Having said that, color is a big part of our industry and there are new technologies and better tools to innovate and to maintain the color with new formulas and products.
Pari Esfandiari: One of the highlights of the Convention was the North American Hairstyling Awards event. It was glamorous and plentiful, yet, salon owners out across US are struggling. Is the beauty industry seeing a light at the end of the recession tunnel?
Steve Sleeper: The beauty industry is a pretty resilient industry. Recessions have come and gone and people still want to go to a salon. They want to take care of themselves. So for the most part, we have been recession-proof. But the recent market crash was at a scale that none of us had experienced before.
For the first time, maybe, in our history, we did see a slowdown, but things are turning around.
Pari Esfandiari: Maybe things are turning around but for whom? There are lots of consolidation. So big players are getting bigger and small ones perhaps pushed out.
Steve Sleeper: Yes, there is a lot of consolidation taking place, specially at the distribution and manufacturing levels. In one hand there are large multinationals getting into the industry. On the professional side, just for a variety of reasons: the profitability, margins, prestige, the research, the cutting-edge nature of salon products that help lead some of their retail products down the road. So those are big ones. This will result in a lot of opportunities for smaller distributors and smaller manufacturers to fill the gaps. Specialists, as well smaller, nimbler, closer to the market companies. This will bring back some degree of the entrepreneurship into the loop.
On the other hand, economy has been very challenging for our salons and spas. As a result we are going to see a sort of weeding out, at the salon level. Salons that are on the margin, they may have to change their management style or business model or maybe not even do it anymore. To go back to working for somebody else or cutting hair in a different environment. There’re just lots of salons that are on the edge of hanging in there, and they’re not doing great.
Pari Esfandiari: There was a strong presence from adjacent industries/sectors in the convention. It appears to me that health industry is converging, are there other sectors that are moving in?
Steve Sleeper: Yes, we see some of that especially in the skin care. There is also crossover between the spas and doctors’ offices. Nutrition has become a part of some of our larger salons’ menu of items. In terms of the whole look that we’re assembling, the fashion industry has always been something that’s sort of played along with our industry.
Pari Esfandiari: The show brought together exhibitors from Far-East, Europe and other parts of the world. It was a truly globalized event. What has been the impact of this rapid globalization on the beauty industry?
Steve Sleeper: For the most part, what actually translates to the street for our salons and spas is really no effect. They have other challenges. I mean, each and every day on mainstream America those salons and spas are out there doing their thing and trying to take care of their customers and their clients and focusing on how to keep those clients and service them better and be profitable at the same time. A lot of our hairdressers don’t have the training that an average business owner might have, they are facing serious challenges and many of them are regulatory such as taxes, licenses … The government is not getting less intrusive; it is getting more intrusive.
Pari Esfandiari: What role does the association play at state and federal levels?
Steve Sleeper: We do have a large advocacy program in place. Right now, we’re seeing a lot of activity at the state level around cosmetology licensing and the whole movement to deregulate the industry. At the federal level; there are two major issues. We will continue to work with the Personal Care Products Council on FDA reform. That’s a big one for us. The second issue is tax credit and federal tax relief for our salon owners.
Pari Esfandiari: What kind of pressure does the industry face due to lack of uniformity in regulations at the international scene? Issue at hand Chinese demand for animal testing and US and Europe ban on it.
Steve Sleeper: We’re not going to have uniformity at least any time soon between the U.S. structure with the FDA and some of the other international bodies. So dialog and cooperation are the name of the game right now.
And at this stage we focus on FDA. It wants to reform its cosmetics and colors, which is what regulates our industry. Congress has been pushing for it, so there’s a lot of discussion going on right now and that is what we are focusing on.
Pari Esfandiari: How do these discussions settle consumer concerns?
Steve Sleeper: The industry has acknowledged that it needs a FDA that is better equipped. It would be helpful to have a credible and authoritative voice backed by scientific facts. There have been many well-meaning groups who created fear based on bad science. This should not be allowed. Our industry is part of our community and consumer of its own products. At the end we all want truth.
I just want to know what really is good for me, what’s not; what’s low-risk, what risk am I willing to accept. And then let me make that decision. The debate is about transparency and we are all for it. Can we be more upfront? For sure.
Pari Esfandiari: The beauty industry is a people-oriented industry. At the end it is based on one to one relationships, with a feel good mission in the community. How is this philosophy promoted by the PBA?
Steve Sleeper: We have a large foundation that deals with three primary programs. One is a Disaster Relief Fund, which is really a fund that’s set up to provide cash to industry participants that had been affected by national disasters. Whether it’s hurricanes or tornadoes or flooding, a lot of our owners just need short-term help to get back on their feet. So we have an application process and have funds available too.
The other one is our Cut It Out Program, which is a domestic violence program, which is designed to help salon professionals to spot the signs of domestic violence in their clients and then refer them to professional resources to help them overcome it. We have had instances of violence in the salons themselves. So that’s a big initiative, and we’ve been working closely with the Great Clips, they have made a large donation last year to the fund to help us.
And then the third component is our Look and Feel Better Program, of which we’re one of three collaborators: American Cancer Society and Personal Care Products Council Foundation. The three of us work together to help cancer patients who are undergoing treatment, to learn how to put cosmetics on, and wear wigs, and tie scarves because most of them have hair loss and skin discolorations and skin issues. So that’s a fantastic program between the three of us. Over 10,000 patients a year go through the program.
Pari Esfandiari: And how do these people approach you, how do they find that there is this opportunity out there?
Steve Sleeper: The websites are a great source. The Personal Care Products Council Foundation, as part of the Look and Feel Better Program, does a lot of the advertising. We are more responsible for generating the volunteers, the cosmetologists actually do the training sessions and teach people how to do these things.
Pari Esfandiari: That is a great mission and I wish you and PBA a lot of success.
Dr. Pari Esfandiari, Writer