Hair color category heats up with 3 permanent launches

Drug Store News, August 5, 1996 by Lisa I. Fried

Hair color, the second largest hair care category, is poised for dramatic growth. With the release of Hydrience and Belle Color, Clairol and L'Oreal are promising to broaden the base of permanent hair color users and drive major sales gains into a continuously hot category. And a European company, Laboratoires Eugene Paris. is also generating interest with the U.S. launch of its permanent hair color, Eugene Color.

Clairol and L'Oreal expect that within 12 to 18 months of launching Hydrience and Belle Color, each of these products will occupy between an and 10 percent share of hair color dollar sales. Currently only three hair color brands (all permanent hair color) occupy dollar market share positions of 8 percent or higher. For the 52 weeks ending May 26, 1996 L'Oreal's Performing Preference garnered a 16.1 percent share; Clairol's Nice 'n Easy had a 12.8 percent share, and L'Oreal's Excellence had a 9.6 percent share, according to Information Resources Inc.

Since Hydrience and Belle Color are positioned to both bring new users into the category and trade semi-permanent users up to permanent hair color, it's tough to tell how much they will affect sales of existing brands.

What's in a name

Buyers are optimistic that bringing natural gentle products to the permanent segment will fill unmet consumer needs. However, several expect Hydrience to take off quicker than Belle Color. The reservations about Belle Color center on L'Oreal's bold decision to launch it without the L'Oreal name. Instead, Belle Color is being released as a product of Laboratoires Gamier, a European beauty company that L'Oreal is bringing to the U.S. Belle Color is its first launch. The L'Oreal name does not appear on the box of Belle Color and will not be mentioned in advertising.

This worries some retailers. "I am concerned about Belle Color not having the L'Oreal name on it," said a buyer at a regional chain. "We have such a tight hair color department that I don't know where we will fit it in."

"I don't know if Belle Color will make it, added a hair care buyer at a national chain. "If they spend what they say [they will spend on advertising and promotion-$20 million], and they steal share from Preference and Nice 'n Easy, that will be great. But I predict it will be a slow grow for a while."

Executives at L'Oreal assert their strategy for Belle Color, the top selling hair color in France, will pay off. The U.S. version is positioned for a younger audience (ages 20 to 40) than L'Oreal's Preference (ages 25 to 54) and Excellence brands (ages 35 plus), and the company believes that hair color users want more alternatives than currently exist.

"There are women who are fed up with ... the limited choices for hair color," said Carol Hamilton, senior vice president of marketing for L'Oreal. "Many don't think there is much difference between the technology [offered] by L'Oreal and Clairol."

Belle Color is designed to change that. The product spreads like a shampoo, stays put like a gel, and rinses out quickly. It contains a lower concentration of dye than other permanent products, includes natural oils to condition the hair and is designed to produce color with greater high and low tones that wears off naturally.

The product was developed to meet the needs of a new female consumer. This female shopper, identified by Yankelovich Partners in a study for L'Oreal, has the following needs: She wants beauty manufacturers to treat her with respect, expects a pleasant shopping environment and service, prefers natural, easy-to-use beauty aids, judges her happiness by her own standards rather than outside measures, considers her family to be the most important thing in her life, places a premium on taking care of herself and enjoying life and contributes to her community.

"This new consumer is not being met by L'Oreal and our competitors and represents the next untapped market," said Hamilton, who is spearheading Labortoires Gamier's U.S. plans.

The merchandising and marketing strategies for Belle Color were designed for this new shopper. The shelf system includes a mirror so a woman can hold up a box of hair color next to her face. It also instructs the customer to place her hands on the display and match her skin tone up with a complementary hair colon

The ad campaign, which breaks in September, shows images of women with their families and emphasizes how easy and quick (20 minutes) the product is to apply.

Other brands find acceptance

Buyers worried about consumer acceptance to an unknown hair color brand may be comforted to learn about the experience one national drug chain had testing another European permanent hair color, Eugene Color with Silk Protein. The chain initially tested the brand in some stores and has recently rolled it out nationally.

"They had a proven track record in Europe for quality, and the quality held up in the test," said the buyer for this chain. Equally important is the fact that the brand "provides more profits than Preference and Nice 'n Easy," he said.