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Technology Driving Mass Hair Care Sales

After years of flat growth, mass retailers are once again experiencing a sales bounce in the category as consumers embrace hair-care treatments.

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NEW YORK — Consumers are getting conditioned to a three-step hair-care regimen.

This story first appeared in the June 7, 2013 issue of WWD.  Subscribe Today.

That’s welcome news to mass retailers, which generate the bulk of the category’s sales. After years of flat growth, they are once again experiencing a sales bounce in the category. Without an expanding number of heads to wash or an uptick in shampooing, the only route to growth is selling additional products.

The focus on treatments is a concept born in the neighboring skin-care aisle. Both mass and prestige marketers are borrowing a page from the category by launching antiaging formulas, as well as products targeting scalp health. Ingredients commonly found in skin-care products, such as caffeine and panthenol, are increasingly showing up on hair-care labels. What’s more, BB and CC creams are now part of the hair-care lexicon.

“The skin-care category has done well at promoting the idea of steps. In hair care, there is more opportunity [to explain] the role of a great conditioner and shampoo with a treatment product and how they can help you,” said David Rubin, vice president of hair care for Unilever in the U.S. Retailers list launches such as Pantene’s Expert collection, L’Oréal Paris Advanced Haircare, Nexxus Youth Renewal, Alterna’s Caviar Antiaging Shampoo and Unilever’s Clear Scalp & Hair Beauty Therapy as collections causing seismic shifts in their planograms — the first in 20 years when diverted professional names began nabbing shelf space. Most of these recent launches include a “third or fourth step,” necessitating extra display space near the shampoos and conditioners. To make room, chains said they sliced facings of slower-moving shampoos or conditioners and edited out some styling aids.

“We are trying to merchandise these new items the way consumers think when they come to purchase at the store,” said one buyer. The dollar outcome is expected to be worth the shuffle. After a few years of flat growth or declines in many hair-care departments, volume is inching up. Shampoo sales for the 52-week period ended May 19 in total U.S. multioutlets (supermarkets, drugstores, mass-market retailers, military commissaries and select club and dollar retail chains), rose 2 percent to $2.6 billion, according to the SymphonyIRI Group. Conditioner volume for the same period gained 6.2 percent to $1.8 billion. The only stagnant subcategory was styling aids with less than a 1 percent gain. No worry, said retailers, because they expect the third product — or treatments aimed at specific hair concerns — to offset the styling segment’s slump. Buyers are quick to add treatment items aren’t totally new — there have been specialty products for years. What’s different now is that consumers are more educated about their benefits from buying skin care in mass stores, as well as doing their own online research. And, perhaps the biggest factor, brands have helped by stepping up educational efforts. The goal is to trade consumers from a commoditized, one-size-fits-all “quick fix,” to a multistep regimen, according to L’Oréal Paris president Karen Fondu. L’Oréal’s Advanced Care, which was five years in the making, consists of five clinically tested regimens of shampoo, conditioner and hair treatment. The latter is billed as a critical step. The ranges address restoring hair, fighting frizz, hydrating, color protecting and strengthening.

“Consumers are starting to understand the treatment process for hair,” said Shannon Curtin, divisional vice president and general merchandising manager for beauty, personal care and seasonal at Walgreens, using examples of Pantene Expert Collection and L’Oréal Paris Advanced Haircare. The trend isn’t just in the drugstore channel. “The category is advancing from one where the guest simply used to grab her item and go to one that is an inspirational beauty experience she wants to explore, be educated about and try new things in,” said Christina Hennington, vice president of health and beauty at Target. “This new mind-set is creating even greater demand for newness, innovation and improved technologies in antiaging, scalp health and product efficacy.”

Specialty boutiques, such as GBS The Beauty Store, an outfit of six stores located in Florida, were among the first to see the movement. “What is the latest in antiaging trends? Hair care. The aging process really does affect your hair,” said Ken Bern, founder and president of GBS. “From a retail standpoint, we start introducing customers in their Thirties to antiaging hair-care regimens.” GBS even hosts a Healthy Hair Month once a year where experts give “prescriptions” for hair health. Chain executives added the “third products” that already are proven hits at retail include the onslaught of oils, as well as keratin formulas.

“We feel consumer acceptance of these [items] shows a real interest in maintaining healthier hair,” said one top drugstore chain executive. Retailers are relying on the push from suppliers to tell the story. Pantene takes on the aging issue head-on with its Expert Collection, tapping Courteney Cox as a spokeswoman. Another example is Nexxus’ Youth Renewal, which includes a skin-care-like serum and trumpets the message that the line “combats eight signs of aging hair.” Buyers said L’Oréal soft-pedals the aging message with Advanced Care. “It is a more positive spin,” said one merchant. “All the trends indicate that with the aging of the population, it is a natural progression to talk about things like hair thinning. But the key is to do it in an upbeat message — not that you are getting old,” she said, adding consumers don’t like aging thrown in their faces.

No matter how overt or subtle, the message is resonating with shoppers. More importantly, people are buying the new skin-care-inspired hair lines without siphoning from existing lines — or professional brands sold at mass. “We still have a Suave customer. The new brands haven’t impacted professional. They really seem to serve an unmet need. And the treatment products give us ‘one more item in the cart’ that was important in a mature category like hair care,” noted one retail vice president.

That was somewhat of a surprise, said industry consultant Allan Mottus, who recalled that at first blush, experts thought the new lines would offset a slowdown in professional brands, which had some price resistance during the downturn and aren’t always readily available at mass. The numbers tell the story — Advanced Care already has sales of $22.5 million in less than seven months, according to IRI. And industry sources believe it could develop into a $100 million brand.

The only issue is whether the repeat purchases will be as high as hoped, especially because retailers aren’t sure the ancillary items will have a fast “use-up” rate. So far, one drugstore chain has seen sales ebb and flow drastically from month to month on Advanced Care, based somewhat on promotion. “It has been a short halo period for a launch,” the executive noted. Yet at a ShopRite in New Jersey, the health and beauty aids manager said she’s constantly restocking the line.

The other question, as with new lines, is the need for every item to perform in a competitive category, where every inch of real estate is crucial. One drugstore chain found that consumers gravitate toward the Total Repair 5 collection within the Advanced Care line with those items outselling the Power Moisture collection three to one. Some price points are questioned, such as the $20 tag on Pantene’s Pro-V Expert AgeDefy Advanced Thickening Treatment. However, drugstore chains such as Walgreens have successfully sold its premium family member, Nioxin, at twice that retail. There’s also been little resistance in the skin-care department to prices as witnessed by the popularity of Olay Pro-X and other high-end skin-care items.

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