Supermarkets, drug stores and mass merchandisers are running neck and neck in the race for hair care sales.
But an SN consumer survey, which polled more than 1,000 people, shows the public's money is on mass merchants as the destination of choice for this big-dollar category.
The question looms, then, as to how supermarkets can spur themselves on and open up their lead on the pack in hair care sales. Supermarket retailers who spoke to SN said mass merchants' hair care prices aren't any lower than those of supermarkets. Ultimately, many food retailers find when trying to promote hair care that they are battling consumers' preconceived notions about overall health and beauty care pricing at supermarkets.
In-store displays, price reductions, advertising and coupons are all good bets as ways to catch the fancy of hair care shoppers. A strong selection that reflects market trends and well-promoted, competitive prices, however, is the mechanism to keep shoppers away from other classes of trade, retailers said.
"Mass merchants like Wal-Mart and Kmart really don't rely on advertising to draw customers to buy hair care. They rely on foot traffic," said Rhea Palmer, director of HBC merchandising at McKesson Drug Co., San Francisco. "But nobody has better foot traffic than the supermarket.
"The supermarkets really need to do things in their stores to create excitement in hair care. They must do everything they can to get the consumer to buy hair care when she's already in the store," Palmer said.
SN's consumer survey, conducted by America's Research Group,
Charleston, S.C., showed the majority, 38.9% of those polled, said they were most likely to purchase hair care products at a discount store.
Drug stores were the hair care destination of choice for 25.5% of people, followed by supermarkets, with 24.7% of hair care shoppers.
Beauty/hair salons attract 4.4% of hair care consumers, department stores draw 1.6%, beauty supply stores get 1.4% and club/warehouse stores attract 1.0%, according to the survey.
Sales figures supplied by Nielsen North America, Northbrook, Ill., for the 52 weeks ended March 13, 1994, however, show a much tighter race. When tracking total hair care (which includes shampoos, cream rinses/conditioners, hair color, hair spray, women's and men's hair preparations, home perms and wave setting), Nielsen found food stores had the largest dollar volume, with $1.36 billion, or 35.4% of the market. Drug stores came in second, with $1.27 billion, or 33% of the hair care market, followed by mass outlets, with $1.21 billion, or 31.6% of the hair care market.
Mass merchants, however, are closing the gap quickly, with sales up 11.5% from the previous year. Both supermarkets and drug stores appear to be losing ground in hair care dollar volume, down 1.3% and 1.9% respectively, according to Nielsen.
SN's survey results didn't surprise Jim Key, nonfood direct-store buyer at Community Cash Stores, Spartanburg, S.C.
"Wal-Mart and Kmart and discounters are getting a lot of the HBC and hair care sales just because of price point, which is not necessarily true. We're very competitive in hair care items compared with Wal-Mart and these other discount stores," he said. "But the discounters' edge is part of a perception that's been built in consumers' minds."
Burnie Campbell, advertising director at Big Valu Discount Foods, Lexington, Ky., agreed: "A lot of mass merchants' price advantage is based on perception. But we've really tried to push our prices through in-store promotions and advertising, too."
Indeed, couponing and in-store displays seem to be the key to getting hair care sales out of the starting gate.
When consumers were asked what mechanism would most likely get them to try a new shampoo, even if they were already loyal to a particular brand, 34.6% answered coupons, followed by 27.4% who named an in-store display with a special price.
Palmer of McKesson said using in-ad coupons or planning in-store displays around manufacturer freestanding insert drops are excellent ways for supermarkets to take advantage of their store traffic.
"Most of the newspaper coupons are geared for the supermarket. So if a consumer has all of her coupons together, including a hair care one, wouldn't it be logical that she'd want to buy the hair care at the supermarket instead of making another trip?" Palmer asked.
If supermarket buyers get together with manufacturers and plan in-store hair care endcaps and displays to coincide with FSIs for various products, they can double consumers' interest and excitement in buying the given hair care product at the food store, Palmer explained. She said hair care manufacturers are willing to work closely with food retailers because they "don't want to see all their business end up in just one class of trade."
She also said it is important that when supermarkets run in-ad coupons, they show the value of the coupon, too. With the trend of higher-value coupons, Palmer said, supermarkets can often show consumers their price for a given hair care product will be free, or close to it.
As for those supermarkets who feel they have better ways to use an ad or endcap than to promote hair care, Palmer offered this warning: "Mistake, mistake, mistake. Supermarkets can't expect to sell hair care if they don't create an image that they have the products and that they're in the ballpark [of discounters] on pricing."
Key of Community Cash agreed that promotion is critical to supermarket hair care sales.
"You've got to promote hair care. We've stopped the eroding of sales to the discounters," he said. "We've gotten more competitive on prices and we're offering the variety and sizes that the discount stores are offering. And we're running hot features in our ads and drawing attention to the fact that we do have these products and we do have them at the right prices. We can feature them as cheap as discounters can."
In-store prepack displays, bonus packs and closeout specials that can lend themselves to good values all seem to work well in hair care, he added.
Staying on top of trends in the category is important, too, retailers said.
The majority of consumers polled by SN, 52.4%, said for conditioning purposes, they usually purchase a separate shampoo and conditioner. More than 35% said they use an all-in-one shampoo and conditioner, 5.5% usually use a leave-in conditioning product and 2.2% said they most often use a hot-oil treatment.
Palmer noted, however, that while women say they usually use a separate shampoo and regular conditioner, many also supplement those products with periodic use of hot oil products or leave-in conditioner. Broken down by sex, 41.1% of men said they usually use an all-in-one, compared with only 31.9% of women. More than 7% of women said they usually use a leave-in conditioner, compared with only 3.2% of men.
Asked about what type of styling product they are most likely to purchase, the bulk of consumers, 39%, said they use hair spray, 20.5% said they don't use styling products, 12.6% named mousse, 12.2% said gel, 7.5% said a mousse-gel combo product, and 6.8% said spritz.
While the majority of consumers surveyed, 55.5%, said supermarket HBC selection is somewhat or significantly better than it was two years ago, their assessment of supermarkets' hair coloring departments was not as enthusiastic.
When asked about the selection of those products at supermarkets, 32.2% of consumers said they found a moderate variety, 15.1% said they didn't find enough variety, 10.3% said little or no variety and 8.0% said they found a wide variety. The majority, however, 33.7%, said they do not use the products.
Women, though, had a different slant on the question. Only 24.7% of women said they do not use hair coloring products. The majority, 34.0% said supermarkets had a moderate variety of hair colors, 31.7% said supermarkets had not enough variety or little or no variety, and 9.1% said food stores had a wide variety.
Women who color their hair are more likely to buy additional conditioners and styling products, Palmer said.
The SN survey also found that more than one in five women choose an expensive salon brand when purchasing shampoo.