Hair care is the new competitive battlefield among beauty retailers.
Stores used to tussle for shoppers’ cosmetics sales, but a convergence of factors have made them focus on the hair-care aisle. A number of mass merchants, desperate to keep shoppers from straying, added products once available only in salons. Salons, faced with dwindling sales as women shampoo less frequently, are adding more brands and seeking to stifle diversion. At the same time, specialty stores like Sephora are offering more hair-care products, a category they once overlooked. Department stores also are finding bountiful opportunities in hair, while all channels are trying to combat a sales drain caused by the popularity of direct-to-consumer lines such as WEN by Chaz Dean.
There’s a good reason to get in a lather over the category. Global hair-care sales exceeded $80 billion, with the U.S. market contributing $11 billion in 2013, according to Euromonitor International.
While many beauty categories are languishing, recent sales data from Information Resources Inc. reveal bouncy growth across most hair-care sectors. Notably, shampoo sales in all mass doors for the 52-week period ended Nov. 30 increased almost 4.1 percent to $2.7 billion, while conditioner volume jumped 5 percent to contribute another $1.9 billion.
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Euromonitor predicts the U.S. hair-care market will reach $12.8 billion by 2018, fueled by consumers trading up. Propelling sales are lines that eliminate frizz, those without harsh ingredients (especially sulfates), formulas that remedy problems such as hair loss, hair oils and personalized products for different hair textures.
“No one wants to have a bad hair day,” said Ian Ginsberg, president of C.O. Bigelow Apothecaries, noting his business is booming in segments such as men’s hair, oils and hair fragrance. “The bar has been raised on what people will pay,” he added, citing price tags exceeding $60 for Oribe Gold Lust Transformative Masque.
Without more heads to wash, marketers have to boost sales by encouraging consumers to buy multiple regimen lines and higher-ticket items. It used to be enough for mass merchants to offer two types of hair care, namely traditional and salon brands. Today shoppers want specific solutions, such as remedies for damaged hair, thinning hair or managing textures. That’s created shelf-space stress with big brands beefing up budgets to stave off growing independent brands.
There’s a huge battle brewing to satisfy demands of shoppers with different hair textures — and that’s not limited to black or Latino consumers. Target was among the first to hit upon the concept in 2012 when it supplemented its ethnic department with lines addressing various textures of hair. Products addressing texture, such as Shea Moisture, are being marketed beyond ethnic audiences. That’s paying off as Shea Moisture’s conditioner-cream rinse sales just soared 74 percent in the 52-week period tracked by IRI ended Nov. 30.
Recently, Sephora entered the fray with a curly hair department featuring veteran salon favorite Ouidad and Briogeo. Nancy Twine, Briogeo founder and ceo, said the space devoted to products for curls and various textured hair has been well-received. “Briogeo’s curl-specific products continue to be big hits among our customer base. I believe the curl category among prestige hair care is not nearly as saturated as mass curl care, which I think has allowed Briogeo to gain good visibility and traction within the space early on,” Twine said, adding the natural ingredients also hit a chord with ingredient-conscious beauty consumers.
Natural is developing into another congested landscape. “People want products without chemicals, such as sulfates that build up on hair,” said Kelly Foreman, founder of MopTop, a line of natural products to manage curly hair. Her natural positioning caught the eye of Whole Foods executives, who added her line to the assortment. MopTop recently added a clarifying rescue treatment which remedies buildup of chemicals, said Foreman.
A natural positioning focused on the root of the hair made Chaz Dean’s WEN, a cleansing conditioner, a huge direct marketing hit, siphoning off traditional retail hair care. Retailers expect a bevy of conditioning cleansers to invade the mass market in 2015.
Target and Clairol are tinkering with a natural positioning of Hair Food, an exclusive line that is free of silicone, mineral and paraben. Another item getting thumbs-up from retailers is L’Oréal’s EverCréme, a sulfate-free cleansing conditioner.
The hair-growth segment is garnering consumer attention. One drugstore chain executive called Rogaine Foam for women a “game-changer.” Mary Dillon, Ulta’s chief executive officer, recently singled out Keranique’s Hair Regrowth Treatment — which features 2 percent Minoxidil, the only FDA-approved ingredient clinically proven to help women regrow hair — as a big contributor to hair care.
Duplicating the salon experience at home has been a big boost to retail sales, as evidenced by TRESemmé with its 7 Day Keratin Smooth. Sales of the product, which promises sleek hair for seven days, hit $17 million within less than a year.
Despite encroachment from specialty stores, drugstore retailers said one fact helps them continue to dominate the business — promotions rule.
“The real reason for increases in the category is stemming from high-value coupons that manufacturers are dropping monthly on TRESemmé, Pantene, Head & Shoulders, Clear, Dove and L’Oréal Advanced,” said one drugstore buyer. “People are fickle and switch brands due to a hot sale.” Promotional activity really ignited the Pantene Pro-V brand in the last 52 weeks, with sales soaring 417 percent to $23 million.
IRI ranked the leading brands in all mass doors with Organix in the lead, followed by Suave Professional, Suave Natural Infusion, Clairol Herbal Essences, Pantene Pro-V Moisture Renewal and Garnier Fructis Sleek and Shine. In the race between the two behemoths, Procter & Gamble and Unilever, P&G has a decided edge with shampoo sales of $611 million to Unilever’s $348 million. Shoppers aren’t the only ones fickle in hair care, the buyer said. “Approximately 20 to 30 percent of new items are deleted by retailers six to eight months [from launch] in preparation for the next year’s planogram.”