Hair Color

Drug Store News, July 20, 1998

There's Nothing Dull About the Growth of the HairColor Business as Boomers Cover Gray; More Men, Young Women and Teenaqers Experiment

There's never been a brighter time for haircolor. Aging baby boomers are seeking to hide the reminders of aging and youthful consumers are ripe for experimenting with exciting shades.

The category is being boosted by a constant supply of new users. The best news is there is still plenty of potential for at-home color. More men, young women and teenagers are looking to use haircolor. Hair-color sales rose 7.1% to almost $1.1 billion in 1997, according to ACNielsen. Propelled by the influx of new users interested in trying new shades, haircolor sales outpaced other hair care categories last year.

Despite obvious consumer interest, the category is characterized by shopper confusion. Consumers want to know which brand and what levels of color to purchase. The greatest retail challenge is to present a department that presents a shade mix for all haircolor types. Breakthrough technologies are a major force in luring new consumers or enticing people to switch brands.

"You can't get new users with me-too products. You have to have something that is unique or you just fragment the pie , explained Perry Sansone, director of business development for Clairol.

There have been numerous innovations in haircolor in just the past few years and these developments have had a positive impact on sales. Clairol, for example, created Hydrience, the first water-based permanent creme hair color. Hydrience continues to flourish among the Level III hair colors, bringing margins in excess of 20% to a category where retailers are on the prowl for better profits. Another case in point is Clairol's Natural Instincts which also filled a market niche. Furthermore, Clairol also extended its reach with men with a launch last year called Men's Choice for beards, mustaches and sideburns.

This year Clairol is launching another item with a dramatic product improvement called Revitalique. Available in July, Revitalique is targeted at baby boomers and addresses the special needs of aging hair. Revitalique will appeal to those who have finally admitted their gray needs to be covered and to those who want to keep a youthful appearance. The item will also address the ongoing trend to trading up to premium quality hair-coloring products. With all of the new product activity in haircolor, retailers have looked to manufacturers to provide the expertise to cut through the confusion at the point of sale.

Although consumers are willing to change their shades, they often don't understand the array of choices.

Market leader Clairol has made tremendous inroads in assisting consumers. The first step was Clairol's Color Choice System which segregates haircolors into three levels so customers know what they are getting. Level 1 products last for six to 12 shampoos, Level 2 For 12 to 24 shampoos and Level 3 for those desiring a permanent color. That's further supported with the MERCHANDISE 2000 merchandising fixture that makes it easy to find the desired item. MERCHANDISE 2000 organizes Clairol's products based on the level.

Now Clairol is further defining the merchandising of color by scrutinizing how consumers shop for products and translating that into planograms. According to Sansone, the planogram needs to he anchored at eye level by the new and high-technology brands such as Hydrience, Revitalique and Excellence. He calls these the superpremium items which are helping retailers enjoy higher register rings and profits in haircolor. This layout will help attract new users while encouraging existing shoppers to trade up.

With the wide array of colors and levels of items available in haircolor, retailers need to examine the mix to ensure it is efficient. Although consumers want to see a full choice of colors when they enter the store, they can he bewildered by too much product duplication. It is critical the brands consumers trust are stocked Clairol, for example, accounts for as much as 63% of new usage. "Aided by everything from the ease of consumer selection to unique product positioning, Clairol really brings in new users," explained Sansone.

The company is also on the cutting edge of implementing cluster planograms. Different shades and different levels sell in various regions of the country. Clairol is uniquely qualified to present the most appropriate department set Haircolor is a trademark of the drug trade channel Women associate late drug stores with having a large selection and the best brands. However, a d rug chain's once 60%-plus posit on in the market is now holding steady at 46%. Clairol wants to help drug retailers maintain and regrow their share. "Clairol is ready to work with all retailers to focus on a product mix that will push sales as far as we can," says Sansone