Styling aids, color lead ethnic sales

Drug Store News, April 25, 1994 by Liz Parks

Ethnic HBA sales in most chain drug stores remained soft through 1993. The problem was partly competition, which forced many chains to discount ethnic hair care products, especially high-ticket products like relaxers, and partly the lack of new fashion styles, which are needed to drive sales in this category, buyers said.

The strongest growth segments in hair care were styling aids, up 14 percent in units and 13 percent in dollars; and hair coloring products, up 8 percent in units and 6 percent in dollars. These figures were supplied by Towne-Oller, the market research division of Information Resources Inc. that tracks ethnic product sales through distribution centers and mass retail outlets like drug stores, discount stores and beauty and barber supply shops.

For the 12 months through December 1993, Towne-Oller reported that sales of ethnic products in all mass market retail trade classes remained essentially flat.

No one is sure how much ethnic hair care business is done in mass merchandise stores and beauty/barber supply shops vs. chain drug stores, but many chain drug ethnic product buyers says they are finding it hard to keep these two trade. classes from stealing their business.

"There's no question the category's gotten more competitive," Harco's ethnic products buyer Charles Monk said. "The deep discounters are trying to steal our sales; discounting beauty and barber shops are turning up everywhere. We know we can't compete by just dropping prices."

Monk said the strategy Tuscaloosa, Ala.-based Harco uses is to give its customers good value, as well as the selection and the variety they can't get in other stores.

"I have items my customers can't get at Wal-Mart," he said. "That's how we try to compete."

At K&B in New Orleans, ethnic hair care buyer Chuck Gautreaux reported that in the face of intensifying competition, K&B now advertises ethnic products much more frequently. In addition to its two main promotions for Black History Month and Back To School, K&B also runs promotions in just about every circular.

"We're doing more bonus packs," said Gautreaux, "because that's what's been driving the category. We're also doing more public service promotions."

Gautreaux said public service promotions give K&B a chance to reach out and build its visibility in the African-American community.

Other drug chains say that in addition to heavier competition for the ethnic consumer, sales are softening because product usage isn't growing.

At Chicago-based Walgreens, spokesperson Michael Polzin reported that ethnic hair care product sales were down this year, and Polzin attributed part of the decline to product usage being down.

"To kick off the category again, we're going to need some new hair styles," he said. "The trend today, especially with men, is for shorter hair, and that means less use of maintenance products."

Many drug chains are hoping that by refining their merchandise mix, expanding into new segments and promoting more aggressively, they will be able to capture a higher share of ethnic product sales.

At Detroit-based Perry Drug, ethnic toiletries buyer Michelle Jones is hoping to see sales grow at least moderately in 1994. "I think the category will do better. People as a whole are much more conscious about the health of their hair. I'm also hoping a new style will come along that will spark sales."