Hair color innovation drives sales in drug chains

Drug Store News,  June 25, 2001  

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It's a colorful world for hair care this year. The hair coloring segment of the business began to show significant signs of growth toward the latter half of last year. According to several retailers and suppliers Drug Store News spoke with, this burgeoning segment of the business will continue to post strong gains as the calendar rolls on, driven largely by a woman's desire to experiment with new, radiant color for fun, instead of just for simply covering gray hair. "Permanent hair color is the biggest segment of the category, and it continues to grow. Consumers are now using these products more for cosmetic reasons," according to Mike DeAngelis, a spokesman for CVS.

According to numbers compiled at Information Resources Inc., the hair color segment grew 3.7 percent for the 52 weeks ended March 25 in U.S. drug outlets. Certainly, that growth was even more pronounced in drug chains, which serve to bring up the total average in the drug channel by overcompensating for their underperforming independent counterparts. Though drug chain numbers were not available for this same time period, results for the 52 weeks ended Dec. 31, 2000, showed drug chains had grown sales 8.2 percent, according to IRI. During that same period, hair color sales were up only 4.2 percent in the overall drug channel (including independents)--and the chains accounted for nearly 79 percent of the $567.4 million drug rang up in hair color purchases last year.

And with all the growth in the category, suppliers are seizing the opportunity to come to market with new product lines this year to keep the consumer's interest piqued. "This is the biggest year ever for new item activity in this category," DeAngelis noted.

Clairol, a major player in hair color, recently introduced Herbal Essences Color, following up the launches of the ethnic brand Textures & Tones. The company, which is being sold to Procter & Gamble, also unveiled new shades of red in its Hydrience line. L'Oreal's newest hair color, which is called Open, will launch next month. Even Revlon, which hasn't introduced a new color line in four years, is staking a claim in this burgeoning segment of the business. In August, the company will introduce a 10-minute hair color treatment called High Dimension (for more, see New Products on page 145.) Garnier introduced Lumia, a hair-brightening formula in April. Nutrisse, its first entry into hair color, emerged last November.

In light of the current dynamics at play in the category, Drug Store News conducted a series of store tours in mid-April, with an eye trained on examining how three of the nation's top drug chains--Rite Aid, CVS and Walgreens--go to market in hair color. The stores examined were located in the greater New York area (excluding the borough of Manhattan).

One key characteristic that ties all of these chains together is their ability to strike when the iron is still hot--a distinction shared by at least one other chain, according to suppliers--Eckerd. Perhaps the reason the business continues to favor the chains is that they continue to move fast on new product introductions, seizing the earliest opportunities to participate in supplier promotions aimed at supporting the new launches.

One recent example comes by way of Clairol's Herbal Essences launch into hair color. "We created a gorgeous oval floor stand that holds 60 pieces of product [to support the launch]," explained Perry Sansone, director of business development and promotional services at Clairol. The unit also holds a shade swatch ring and a mirror for customers to get a sense of whether a particular color works for them, as well as free consumer hair color selection literature.

"Both CVS and Eckerd reported selling out of several [items] even before their first ads broke," said Sansone, who added that the floor displays went almost immediately into 6,500 CVS and Eckerd stores combined. He added that Walgreens and Rite Aid began running display programs in May.

These chains seem to be more or less on the same page when it comes to merchandising the category. Front and center in every location Drug Store News recently visited were Clairol's most popular brands: Hydrience, Ultress and Natural Instincts, which assumed the eye-level position on shelves, along with L'Oreal's Casting ColorSpa and Feria. L'Oreal's Preference and Excellence cream also had similar positioning.

When it comes down to men's hair coloring products, there is a kind of "Mason Dixon line," insofar as merchandising to this decidedly split consumer audience. While the more fashion-forward male has no difficulty venturing into the hair color aisle for the Feria for Men shade he is looking for, his more conservative counterpart tends to look for products such as Casting ColorSpa for Men and Just For Men in the grooming aisle. "We merchandise Casting ColorSpa for Men in the men's grooming aisle," explained a L'Oreal spokeswoman, because it's for the older male looking to cover gray hair.