Seeing blonde, red, brown and black

Drug Store News, Sept 8, 1997

Long the destination venue for the hair coloring category, the drug store channel has been losing its stronghold on the business to the more price-oriented mass merchandisers and better-trafficked supermarkets. Hair coloring unit sales in the drug channel were up 7% in 1996 over 1995, versus a 12% advance in foodstores and 12% in mass merchants. Still, the drug store represents the lion's share of category unit sales at 37%, compared with 33% for mass and 30% for foodstores.

And the drug channel is hell bent on maintaining, and growing, its share of this core category as a more savvy shopper rediscovers that this retail venue is still the go-to place for the latest products and the widest assortment. Certainly the demographic trendlines suggest it's a category well worth fighting for. By the year 2000, the graying of America will take its toll on the bulk of the population, which will be between the ages of 35 and 64. "People are also working longer in life, and appearance is very important to them," says Nora Brown, Manager of Merchandising Systems for Bristol-Myers, Squibb Consumer Sales, marketer of the Clairol line. "They're also more active - they want to feel younger so it makes sense that they want to look younger." In addition to the traditional female user, more and more men are also now coloring their hair. In 1996, sales of men's hair coloring products topped $97 million, up 12% from 1995.

Drug store operators are restaking their claim on the category by emphasizing the new products, particularly those that feature enhanced technologies and ingredients, which, by the way, also ring up higher profits.

"The key purchasing drivers for this category in the drug store are convenience, selection and education," says Brown. "The distinction for the drug store has to be selection in all colors and across all three levels. (Level 1 products last for 6 to 12 shampoos; Level 2 for 12 to 24 shampoos; and Level 3 is permanent.) But the drug store should only pick up new items when they offer a point of difference. This is the expectation of the consumer - that the drug store will have the new breakthrough products, and they are willing to pay a little more for them." It's no coincidence that the Level 2 and Level 3 segments are showing the biggest growth in the category -- they're also the segments to see the most breakthrough enhancements and new technologies in recent years, such as Clairol's 30-SKU Hydrience line (Level 3) and Natural Instincts (Level 2). "Satisfying hair color consumers is good for your business because this consumer tends to buy more products which typically rings up a bigger basket," says Brown.

Clairol takes a macro or micro approach to the hair coloring planogram, depending on the store and store location. "For example," Brown points out, "you would probably find a different mix in a store in Miami, FL than you would in Boston. Your assortment should satisfy at least 80 to 85% of the consumers that come into the store for hair coloring, and you can do this with a well-stocked hair color section. In some cases, you can change your entire consumer reach by replacing one slow-moving SKU with one topseller. The right mix is critical for all categories in the drug store because space is so limited, but it's particularly critical for hair coloring because it's not a category that consumers purchase every day If their product is not there when they're in your store, they'll purchase it somewhere else. You have to appeal to the broadest section of your shopper base, and you have to stock the products they are most likely to buy"