Retailers renew focus on ethnic hair care shoppers

Drug Store News, June 25, 2001

Drug chains, who once dominated ethnic hair care sales, have seen their shares drop, according to Information Resources Inc. data for the 52 weeks ended April 1, to 30 percent, falling behind discount outlets, which command a whopping 50 percent of the business in food, drug and mass.

But now, armed with the 2000 U.S. Census numbers, marketers and retailers are seeing renewed interest in African-American, Hispanic and Asian shoppers. Drug stores are hoping to stem the tide of shoppers turning to other doors; marketers are hoping to use new technology to usher in improved products to serve the real needs of ethnic consumers.

"We're getting to where companies like L'Oreal are trying to develop products that solve real needs--products, for example, with less breakage of hair," said Allan Mottus, an industry consultant, referring to the new L'Oreal Institute for Ethnic Hair and Skin Research, which will open in Chicago later this year. A spokeswoman explained the institute will help the company to better understand the difference between Caucasian and African-American hair. L'Oreal showed how important it believes marketing to diverse consumers is by its purchase last year of both Carson Inc. and Soft Sheen Products.

Dennis Smith, senior vice president of sales for Colomer USA Inc., agreed that there is more innovation than ever in serving African-American needs. "With all of the new technology taking place, it is an exciting place to be," he said.

Origins of home hair care

African-American consumers once had to go to salons or use caustic formulas to relax their hair. Mass marketers ushered in a new era in the late 1970s and early 1980s with home relaxer kits. Sales of ethnic hair care products soared in the 1980s with the popularity of the Jheri Curl, which also required a host of maintenance products.

During those years, most chains put ethnic hair care sets into stores where African-Americans comprised at least 10 percent of the customer base. Some chains, Walgreens, for example, created internal buying departments.

Many others sought rack jobbers to take care of the entire selection. Several retailers said they rely on wholesalers such as Bi-Lo, Beauty Enterprises and Millbrook to totally handle the ethnic selections. Those companies have seen their ethnic product sales out strip general market sales--a testament to the strength of lines for people of color.

However, when the curl look unfurled, retailers were hard pressed to keep ethnic hair care sales growing at the same rate. Some retailers lost focus on the business. But, of course, while the hairstyle may have faded, the ethnic customer base certainly has not.

Products formulated for African-American hair are still an important component of the entire hair care category. Drug chains, for instance, sell more than $2 million worth of ethnic shampoos a year.

Hair color also is one area of ethnic hair care that is beginning to show some increased consumer activity. According to statistics from Soft Sheen, nearly one-third of African-American women color their hair, with 50 percent doing so at home.