Brand-switching consumers and growing numbers of ever more specialized products make the hair care category a hectic one, even as sales continue to underwhelm.
But the outlook for supermarkets is positive, according to health and beauty care buyers surveyed by SN, with stores exploiting built-in foot traffic and manufacturer-supported price promotions to maintain respectable profits.
"There's constant change in the category, and you've got to keep on your toes," said Ralph Blanchard, merchandising coordinator for Macey's, Sandy, Utah, who described his hair care sales as very good. "[Hair care shoppers] are very fickle."
Among manufacturers, said Sam Richardson, HBC director at Harps Food Stores, Springdale, Ark., "you've got so many players in the market, it's very competitive, which is good for the retailer and also good for the consumer."
Multi-outlet shampoo sales were $1.5 billion for the year ended Oct. 26, 1997, a 3.9% increase from the year earlier, according to Information Resources Inc., Chicago. Supermarkets and mass merchandisers ran neck and neck, taking in $600.6 million and $603.8 million, respectively. Drug chains were a distant third, with $311.8 million in sales.
Conditioner sales were $845.5 million, a 4.8% increase. Grocery accounted for $291.5 million, mass for $337.8 million and drug for $216.3 million.
Dollar sales of styling products totaled $433.8 million, a 2.7% rise, with grocery outlets and drug stores generating $132.6 million each and mass merchants outpacing them both at $168.6 million.
In terms of growth, supermarkets posted rates slightly higher than those of the segments themselves, while mass merchants' were roughly double. Drug store sales of shampoos, conditioners and styling products fell by 1% to 4%.
"The category is relatively flat," said Fred Mulfinger, manager of analytical services at Lisle, Ill.-based Gladson Associates, a category-management consulting firm. "Whatever growth there is comes from specialty products that address a specific need."
"The salon category is the one people are really excited about. People want specialty items," agreed Blanchard.
David Himel, HBC buyer for Associated Grocers, Baton Rouge, La., noted that manufacturers like Paul Mitchell and Aveda have led consumers to expect much more from hair care products than just "a detergent for your hair."
He said that, although hair care is a mature category incapable of being greatly affected by any single product, one specialty item poised to become a big seller is ThermaSilk, from Helene Curtis, Chicago. Shipping to stores after the first of the year, ThermaSilk is designed to repair damage done by blow-dryers and curling irons. "It's an extensive line that's supposed to work better than the others that have addressed this before," he said.
Lauri Platter, HBC buyer for Fareway Stores, Boone, Iowa, is bullish on ThermaSilk, as well. She said she planned to carry it, commenting that "it has a different niche that might draw more trials."
But price remains a very important -- if not the most important -- factor in driving hair care sales in mass channels, say buyers, with price-promoted brands like Suave, White Rain and Willow Lake generating the most movement.
"There's a difference between what will create interest and what will sell," said Platter, who noted that her most successful ongoing hair care promotion is an everyday-low-price offer of 99 cents on Suave, her best seller. Shelf signs tout the savings -- about 30 cents, Platter said -- to the consumer.
In late fall, Macey's ran a monthlong White Rain promotion -- 49 cents with a coupon -- that was a big success, said Blanchard, who added that his hair care margins typically run from 20% to 35%. "Even though it didn't seem to fit this time of year, we thought the price was something people would go for, and they did in a big way."
The products were displayed on a self-standing gondola at the Wall of Values section, near where the shopping carts are stored. The display, including shampoo, conditioner, hair spray, gel and mousse, was announced in circular ads, on in-store signs and over the public-address system.
"The consumer who buys [low-priced] items is going to buy them no matter where they are. They're very loyal," said Richardson, of Harps.
Harps, he said, has benefited from TPRs, instantly redeemable coupons, bonus packs and scan-down promotions, in which manufacturers pay the retailer for each unit sold, money that is indirectly shared by consumers in the form of discounts designed to move the product. "This will get the consumer to buy the product long term."
These promotions, coupled with stores' inherent foot traffic, put supermarkets in a strong position relative to competitors in the mass and drug channels, Richardson said.
"Hair care is frequently bought -- the regular consumer has a need for hair care every day -- and consumers know the grocery store is competitive. For a few pennies, they're not going to drive across the street."
Associated Grocers' retailers run hair care TPRs constantly -- Pantene and Clairol's Herbal Essence once a quarter, for example -- and circular ads every other week, Himel said. "We stress it day in and day out."
Himel pointed out, though, that the category has become overcrowded, and managing it is becoming more of a challenge. He said he has significantly weeded out his hair care assortment 10 times in the last two years.
"You can have six kinds of strawberry-scented shampoo on your shelves, and you don't really need that," said Mulfinger of Gladson Associates.
He urged retailers to examine their own frequent-shopper data and to consult with manufacturers, which spend huge sums of money on research, to get a clear picture of what hair care shoppers want.
