NEW YORK — Just 11 months after acquiring Clairol, Procter & Gamble is showing how serious it is about its $4.95 billion investment — and in getting the brand back to its leadership position in hair color.
This story first appeared in the October 18, 2002 issue of WWD. Subscribe Today.
Next February, Clairol is unleashing the largest color initiative in its 71-year history with a new technology designed to deliver richer, deeper color. Dubbed ‘copper blocking,’ the technology aims to block the element copper, commonly found in hair via tap water, from reacting with dye molecules in hair color formulas. The objective is to prevent the copper from prematurely speeding up the coloring process, which can waste much of the product, leaving hair with a dyed color that is not as rich, vibrant or true in tone as it should be. Much of the formula, consequently, ends up being washed away.
“By using these copper blockers, we can prevent the premature formulation of color and get more dye into the hair. So, we are creating a whole new level of color,” explained Jane Anders, director of research and development, Clairol.
The blueprint for copper blocking is a result of a collaborative effort of P&G’s hair care team with its fabric care division, a unit familiar with the task of keeping color true to its original hue. But the technology, which was formed prior to P&G’s May 2001 acquisition of Clairol, had no firm foundation, let alone an outlet, until Clairol’s research and development team came on board.
Formulas with the new copper blocking technology will be implemented first in Clairol’s flagship brand, Nice ’n Easy, which is scheduled to appear on mass retail shelves in March. Nice ’n Easy launched in 1965 and is Clairol’s largest hair color brand with approximately 9.6 percent dollar share of the category, according to Information Resources Inc. It is the third best-selling hair color, behind L’Oréal Preference and Excellence brands. Nice ’n Easy generated approximately $96.6 million in sales for the period ended Sept. 29, flat with the prior year. All sales figures exclude sales generated at Wal-Mart.
The new products will be swapped with existing Nice ’n Easy boxes. This undertaking, commonly called a retail swap, is an expensive option to selling through old products and then replacing them with newer ones.
“From a standpoint of manpower, it’s very expensive,” said Herman Livingston, owner and president of Succasunna, N.J.-based Livingston Group, a promotion and marketing consulting firm. “I don’t know what they’ve worked out with retailers, but a [full retail swap] is a very tedious program. The positive is that in a very short period of time, Clairol will have distribution of this new product line in weeks, as opposed to a lengthy sellout of old product, which takes months.”
Paul Scoggins, Clairol’s group marketing manager for North America Color Delivery, said the Nice ’n Easy revamp is just the first in a number of initiatives to revitalize Clairol’s color heritage. The copper blocking technology is expected to roll out to Clairol’s four other core hair color brands — Ultress, Hydrience, Herbal Essences and Natural Instincts — over the next several years. New Nice ‘n Easy products will roll out to Europe, Asia and Latin America throughout 2003.
Nine new shades have also been added to the improved Nice ‘n Easy line, including a collection of warm champagne blond hues, caramel brown shades and chestnut brown offerings.
New packaging looks to explain the copper blocking technology. And, large swatches on box tops will help guide women to find their shade. The new product will be accompanied by a price increase, which is currently being evaluated, along with all the other aspects of the product bundle. Nice ’n Easy retails for approximately $7.
Over the years, Clairol has proved that its hair color innovations can stand up to category leader L’Oréal. Clairol’s Herbal Essences hair color, which was introduced last year, showed that formulas could smell more like fragrance than like bleach. In 1996, Hydrience was the first water-based hair color with sea proteins and minerals. In 1994, Natural Instincts was the first semipermanent on the market that had a blend of natural ingredients and moisturizing conditioners. In 1985, Ultress was the first permanent hair color gel in a tube. In 1968, Clairol launched the first home highlighting kit. In 1960, Loving Care was the first semipermanent to hit the market.
But Clairol is deep in the race to regain its leadership position in the hair color category, a ranking it lost to archrival L’Oréal in 2000. Clairol’s hair color sales have slipped since 1999, from $420 million to $397 million for the 52-week period ended Sept. 8. Clairol’s dollar share has dropped from 46.2 percent in 1997 to 35.6 percent in 2002. Comparatively, L’Oréal’s hair color dollar share has jumped from 33.3 percent in 1997 to 41.5 percent in 2002. L’Oréal generated $462 million in hair color sales for the 52-week period ended Sept. 8. All data is from Information Resources and excludes sales in Wal-Mart.
And the competition Clairol will face in the marketplace next year will keep its executives looking over their shoulders. As reported in June, L’Oréal is launching a double-process hair color, Color Expert, in the first quarter of 2003. The launch will be the first of its kind for the category. Unilever is also said to be entering the hair color category next year, and Combe Inc. is ramping up its presence with its recent licensing partnership with Maxim Magazine.
Whether Clairol has the wherewithal to regain leadership in hair color is too early to gauge, but with Procter & Gamble as its beauty-minded parent, some say anything is possible.
“With any category, when you have a new product launch that has an innovation that improves the quality of a product, there’s no question that’s a help,” said Bill Steele, household products analyst for Banc of America. Steele noted that one of the caveats to coloring hair is that it often yields an unnatural look. “If this [technology] makes it appear more seamless, that’s something people can benefit from. Consumers gravitate to these types of products.”
Steele added that it will be a long road for Clairol to regain its leadership position in hair color, namely since “it’s difficult to displace a company that has taken over a prior brand leader,” but, P&G gets credit for its recent multimillion dollar Clairol “Colorwonderful” ad campaign. “It’s clear that Clairol will be much more vital under P&G.”
Because of the retail swap, Livingston explained, Clairol can initiate advertising as soon as the product begins appearing on shelves.
Scoggins confirmed that advertising will commence in March with a print and TV campaign, as well as a direct-mail component.
While Livingston “couldn’t begin to guess” how many millions of dollars the swap will cost P&G, he said in the end, it is probably a wise investment: “First, they can gain leverage versus the competition. Also, I’m sure someone said they were going to gain sales that much faster and that this is money well spent.”