Episode 28: How Luxury Brand Partners Uses Technology to Build Brands and Empower Salons
Adam Honig: I was a local news reporter in college, so the podcast thing is always fun for me.
Hello and welcome to Make It, Move It, Sell It. On this podcast, I talk with company leaders about modernizing the business of making, moving, and selling products. Of course, having fun along the way. I’m your host, Adam Honig, the CEO of spiro.ai. We make amazing AI software for companies in the supply chain, but not talking about that today.
Instead, today, we’re talking to Achyut Dhakal, the Senior Vice President of Information Systems of Luxury Brand Partners. LBP, if you’re not familiar with them, is a company that develops and nurtures prestigious artist-driven beauty brands. You might have heard of some of their brands like R+Co that you’ve seen in the salon, and we’re going to ask AD all about that during today’s podcast. Welcome to the podcast.
Achyut Dhakal: Glad to be here. Thank you very much, Adam, for the quick intro and glad to be a part of this podcast.
Adam Honig: Yes, thank you so much. Now, maybe you could give listeners just a little bit of the backstory on LBP, because it’s a bit of an unusual business.
Achyut Dhakal: I wouldn’t say unusual, but you know, maybe for…
Adam Honig: In a good way. A lot of the people like us, we manufacture this widget and we go sell it.
Achyut Dhakal: Right. From a software perspective, yes, exactly. But again, we’re LBP, better known as Luxury Brand Partners. Not a lot of people have heard of us, but our brands are famous. We’ve created famous brands from Oribe Hair Care to Becca Cosmetics, Paul Pryor, and now R+Co. There are other brands in the portfolio, like ONE/SIZE Beauty. We have a men’s driven brand, V76, and IN COMMON Beauty, and IGK Hair.
There are many brands in our portfolio. Luxury Brand Partners was started a long time ago, around 2000. When we started, we started with one brand called Oribe Hair Care. I wasn’t part of LBP at that point in time, but it was already making a lot of moves in the news and everywhere else.
This brand just, as a part of a luxury hair care product, it propped up everywhere. We did really good with that brand. I think, because of that, about a year later, our CEO, Tev Finger, actually decided to launch this—He said, “Hey, we’re good at building brands. Why stick with Oribe only? Let’s create more brands.” That’s why we decided to launch other brands as well and create LBP.
Adam Honig: What I find interesting is that your company not only develops the company, but you also develop brands within the company and grow the brands as part of your core competency.
Achyut Dhakal: That’s correct. We start every brand from scratch. We do not buy the brands. Our business model is mostly—each brand has some artists behind it. We create these brands; we have ingredients sourced from multiple places, multiple different things. Then we start bringing sales in. We do all the sales. We do all the supply chain and everything. That’s our core competency.
Adam Honig: These aren’t brands that are found in Walmart or Target or something like that.
Achyut Dhakal: That’s a big no for us. These brands are literally in top-tier salons and prestige salons within the United States and also in the international space. These are not like a Walmart or Costco kind of brand.
Adam Honig: Many of the brands align with the salons and the stylists too. It’s part of their offering to their customers that they have the ability to provide this.
Achyut Dhakal: We value salons and stylists a lot. They are our community. We take them as our own. They are one of us. We have a great network and rapport with them. They trust us, and we trust them. That’s behind each and every brand that we have.
Adam Honig: Got it. From a sales channel perspective, everything is sold through distribution, but primarily through the high end salons.
Achyut Dhakal: Not all the brands. There are certain brands that are done specifically for some of the big retailers’ focus. For example, one of the brands, One Size Beauty, we specifically sell through Sephora. But again, like many hair care brands like R+Co is not sold anywhere else other than salons and maybe big retailers, like Neiman Marcus and Bluemercury.
Adam Honig: Yes, the high-end retailers. Now, within your company, are you guys organized around these brands? Do you have different sales teams and different processes around them?
Achyut Dhakal: Yes, we have each brand organized almost like the United States of America. We have different states within and all are united together at the core with shared common elements. Similarly, we have different brands and their respective teams working on each brand. There’s a specific sales team and marketing team for each brand. However, the backbone remains the same. We all take pride in all of these brands, essentially. We provide shared services, offering support to all of these brands.
Adam Honig: That was something I definitely wanted to ask you about because you’re in charge of it, and you’re providing services for all the different brands. Does each one have their own unique requirements?
Achyut Dhakal: Absolutely, yes. These brands have their own unique requirements meaning that some brands are sold with field salespeople out in the field, some brands are digitally focused, some brands are sold on the internet, specifically on e-commerce websites.
There are different, various types of brands that requires different types of models. But again, I want to focus that salons are our core, customers. We value them. one of our biggest brands, R+Co are primarily sold to salons.
Adam Honig: Do you get a lot of feedback from salons, like what they’re looking for? Is that part of the process that you guys follow?
Achyut Dhakal: Yes, we hear what salons have to say. We have some of the salons that are involved in making decisions on what products should we bring on the market. It’s all based on that research and development and constant feedback back and forth. It’s like a family.
Adam Honig: As an IT professional, you must be getting a lot of data then about all of these different salons. Is data analysis a big part of what the shared services group provides?
Achyut Dhakal: Data analysis is one of the things that we provide. Each salons are independently-owned, independently-managed, but we provide education on our products. We have people going in the salon and teaching the classes to stylists. We have a big educational group behind it, like some events, multiple times a year, and they all come as part of the family and enjoy together and learn together. We provide all this education over there. We get some data like who is selling what and those kinds of things, but basically those are for running the businesses and offer subtle perspective.
Adam Honig: I don’t know if we’ve talked about this before, but my mom worked in a salon. Yes. I have a little bit of knowledge about the salon business, and it strikes me as a very creative social environment, but maybe not very IT-friendly. Is that ever a challenge?
Achyut Dhakal: I would say, yes, it’s very creative, and I don’t have that creativity on my mind. I can’t be as creative as a stylist. But what we do is data, we have internet technology. We try to make it as seamless as possible for salons. We know not everybody is tech-savvy. Probably people know how to use Facebook and Instagram. That doesn’t necessarily mean everybody knows everything.
We take a lot of feedback from our internal stakeholders, and sometimes we talk to salons directly. We say, “Hey, what’s not working?” Sometimes, they say that the browser is crashing, and we know it’s a caching issue. If somebody complains and then tells us that they’re having issues—not able to log in and all those things, sometimes we get on the call, actually, believe it or not, and then show them around, like, “Hey, this is how it is. This can be resolved by doing this and that.” We get very personal in that space.
Adam Honig: What I’m hearing you say is trying to provide very easy-to-use solutions to people. Obviously, there’s no substitute for the personal touch, like really being with people. Yes, that’s really interesting. Every time I think of salons, I think about having to support my mom’s IT needs, and that’s always a…
Achyut Dhakal: Yes. Technology keeps updating everything like software or apps on the phone that requires constant updates these days. Even at Spiro, you guys probably have several updates in a year. For that, it requires installing the new version all the time. Same with the browsers, we do that on the phone most of the time because it tells you to do so, but in the browser, some of the times, it’s not updated and some of the features might not work. That’s a little bit challenging, but again we love to help, and especially if our customers needed, we will be on the phone with them.
Adam Honig: I want to pivot the conversation for a minute. I want to talk a little bit about your background. We were talking about this earlier—you come from Nepal originally. I’m sure it wasn’t your dream as a young boy to be in the luxury product business, or maybe it was, so how did you wind up, first of all, coming here to the US and then getting involved in all this industry?
Achyut Dhakal: The US was one of the real places on Earth where dreams come true, not because Disney is here, but due to the environment. It provides opportunities and global visibility. Let’s put it that way. By nature, my motto is to help people solve their problems. It’s in my DNA. When I came here, one of my goals was to get an education. I was a software developer, coding my things way out. When I came here, I did my MBA. In that sense, I learned a lot about the culture here and how people work.
Whichever industry I’m in, I’m always here to help people, to help them make the best use of technology. I stumbled upon Luxury Brand Partners in 2014. It’s a group of very creative and visionary people. I never worked with creative people. I mostly worked with tech people in the past.
But to see the creative side of it gives me immense pleasure. Even though mine doesn’t work as great, it helps me appreciate what the folks bring to the table.
Adam Honig: Tell me—one of the things we talk about on this podcast occasionally is something called the Amazon effect, the ratcheting up of expectations of customers, internal and external, due to the level of service Amazon provides. Are you seeing any of that in IT?
Achyut Dhakal: We do see that because now, I can tell you a couple of things. For example, the shipment of products—before Amazon, there was no such thing as free shipping, but with the Amazon effect, now we have to provide and match that free shipping. Sometimes we lose money on free shipping, but we go to provide that to be competitive.
Again, we can’t beat Amazon, we can’t become Amazon, but in some cases, we join hands with Amazon for some products. The only reason we partner with Amazon is due to the influx of duplicate products being sold there. In order to preserve our brand identity, we had to shake hands with Amazon. That’s why we had to list our products there too.
Adam Honig: This is really interesting. I want to talk more about this. Did you find that people were counterfeiting your brands, or were they reselling them on Amazon?
Achyut Dhakal: Some were reselling, and some probably were counterfeiting.
Adam Honig: Wow. That’s amazing. The strategy the business took, instead of fighting that, was to join it.
Achyut Dhakal: Yes, that way they avoid listing all the counterfeiting items there. We were able to get this cleared out once and for all.
Adam Honig: Got it. How was the experience working with Amazon? Did you find it a good, easy experience, or was it…
Achyut Dhakal: Yes, we don’t really focus on selling on Amazon. Again, our focus goes back to how to empower salons. That’s our main focus. Amazon we just started. We joined there and we make our products available there. That’s basically what it is. If somebody wants to buy our products, and they have an Amazon account and want to buy from us, that’s okay, they can buy from there, but we encourage everybody to support local salons and businesses and get products from there.
Adam Honig: Well, without sharing any proprietary information, what is your view on manufacturing abroad versus the US? This is something that comes up quite a bit for our customers. Is most of your products made locally or abroad, or how does that work?
Achyut Dhakal: I don’t have much visibility into that. Product manufacturing is handled by an entirely separate group. I know the technology side of it, but I don’t think we manufacture anything out of the United States, it’s all in the United States. Products and ingredients may be outsourced from other places. Everything is done here, and it has to pass certain quality tests before it goes into customers’ hands. We have products that come from us, and then we use that even before it goes to the customers, the employees use that.
Adam Honig: I imagine that there’s a big focus on quality because you’re selling such a high-end product.
Achyut Dhakal: Correct. One thing for sure is the sustainability movement these days. Not only that, but there are animal-free products. We try to incorporate these aspects in each and every product. I think we have achieved that level. Paraben-free, SLS-free—those have been in our products from the get-go, for a very long time. We are moving towards what’s environmentally sustainable.
Actually, R+Co has one of the luxury lines called R+Co BLEU, that actually comes with a seed packet inside, so even if you discard that packet somewhere, it turns into a nice plant, a nice tree. All the packaging is biodegradable. When the product development team works with the leadership team, they this very seriously.
Adam Honig: That’s super interesting. Even the packaging will grow a plant. That’s amazing. If Amazon was doing that, we’d be living in a forest right now.
Achyut Dhakal: We would have another real Amazon.
Adam Honig: That’s a really good way of thinking about it. I like that a lot. We should be encouraging a lot of people to take that approach. So, from a testing perspective and everything like that, all cruelty-free, all the artists involved in developing the product must be very focused on those kinds of issues too.
Achyut Dhakal: Absolutely.
Adam Honig: Cool. What else are you seeing within your view of the market that’s coming up? I know we talk with a lot of our guests about artificial intelligence and how that’s playing out. Do you see salons starting to use AI? Are you guys experimenting with that in the business at all?
Achyut Dhakal: We try to incorporate some of those into the software and services we partner with. Again, AI has been in our focus since six or seven years back. Not just using AI for the sake of using AI, but actually giving a meaning to it. What can it help with?
For example, in some cases, there’s a color shader finder that we have in the system that actually works using AI. One of the brands is using a live video camera on top of that, and you can choose a shade and it turns the hair into a different color.
Adam Honig: You can actually recolor your hair? That’s amazing.
Achyut Dhakal: Not color, but style – the hairstyle. One of the brands, the beauty-focused brand, had different shades built into that. We experiment a lot in terms of those things and see how people use it, and the same with Spiro.
We wanted to get into Spiro, not because it’s AI. After talking with some guys, I just wanted to see how it can help us. I’m not interested in AI because Spiro has AI in it, but I wanted to see how it can help the field sales become more efficient in using the AI itself. So, that was our main focus.
Adam Honig: As technologists, sometimes we get very focused on the how and not the why. What you’re saying is, “No, we really have to figure out why do we need this stuff.” That’s the key.
I love this idea of using AI in product development to predict what different people are going to think about products, or in your case, how it might work on their hair. I’m sure even at the molecular level, there are people looking at AI that way.
Achyut Dhakal: Yes, we work with manufacturers, the scientists that work day and night on these things. Again, we’re not the experts on that ourselves. Me, being a tech guy, know nothing about molecules, but we work with many emerging scientists and researchers on that.
Adam Honig: Yes, molecules are everywhere. No matter where you look, they just keep showing up. That’s what I know about molecules. I should have spent more time in science class. I think that’s the takeaway for me here.
Well, listen, AD, this has been awesome. It’s so great to have you on the podcast. I’m sure people are really interested in learning about how you think about luxury products and working with salons. That’s a super great business you guys are in. I really appreciate you coming on the podcast.
Achyut Dhakal: Yes, no problem. Anytime, Adam. I really appreciate you hearing our story and getting the words out there. Also grateful for being one of our software vendors for the field sales. They’re making really good use of your software.
Adam Honig: Thank you. That’s great to hear. As a reminder for listeners, you can find every episode of the Make It, Move It, Sell It podcast at spiro.ai/podcast. AD, I feel like people should give this recording a good rating. What do you think? Should we tell people to do that?
Achyut Dhakal: I’m not bribing anybody to give any ratings or anything like that. But again, what I’m saying is if you feel you liked it, definitely would love your feedback, and again, I’m all ears anytime. Talk with me on anything like that. I’m all there for you.
Adam Honig: Right on. Well, listen, I really appreciate you being here, and everybody who’s listening, thank you so much for tuning in. We look forward to the next episode.