Soft sales in ethnic hair a challenge to retailers

Drug Store News,  April 3, 1995  by Liz Parks

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This has not been an exciting year for ethnic hair care products. Buyers from across the country report that ethnic hair care sales are basically flat and that nothing new has emerged in the past year to drive sales or liven up the category.

Jim Normandin, ethnic products buyer for Connecticut-based Beauty Enterprises, one of the leading ethnic products distributors, said this year is pretty much "a mirror of last year.

"Styling gels are still hot. Relaxers are doing well. Nothing's different. It's just a continuation of what happened last year," he said

Normandin attributed the softness in the category to the lack of any major new styling trends or product innovations that might create excitement and spark an increase in usage.

Pursuing markets

The vice president of merchandising for one large Midwest-based regional chain said his sales are down, but he blamed the decline on a different reason: "Our own failure to aggressively go after the African-American shopper. In 1995, we're going to make some merchandising and advertising changes to improve that situation. That customer is very important to us, and if we can get her to shop our stores, we can have a major positive impact on our total sales picture."

It's a strategy other chains are following.

Tuscaloosa-based Harco Drug's ethnic hair care buyer Charles Monk also reported essentially flat sales in the category. With hair styles still short and the category maturing, Harco is basically relying on advertising, promotions and events to attract customers, Monk said.

In Powell, Ohio, Greg Hunt, the merchandise manager in charge of health and beauty care for Drug Emporium, said aggressive promotions are helping his chain grow the category. Drug Emporium's sales of ethnic hair care products are up on a comparable store basis, added Hunt.

The gains, he said, are also partly due to ethnic manufacturers getting behind the category and doing a better job with their packaging and their own advertising.

Out in the Southwest, Gary Yowell, vice president of purchasing for Jacks Service, an ethnic distributor headquartered in Oklahoma City, said while sales in the category are flat overall, there is still growth in some key segments, particularly skin care, relaxers and styling gels.

Although relaxers are still a strong segment in ethnic hair care, their unit sales are growing faster than dollar sales. According to Yowell, that's because so many retailers today are using relaxer kits as loss leaders to build traffic.

In 1995, Yowell said some ethnic manufacturers will introduce more lower priced relaxer kits, pre-priced in the $4.99 to $5.99 segment.

"With retailers using relaxers as traffic builders, the margins are being squeezed," he said. "So manufacturers are trying to figure out ways to bring their costs down so they can price their kits at $4.99 and $5.99 and still make money."

Price does play a big role in driving sales in the ethnic hair care categories, but carrying the right product mix and promoting the category often are also important.

Drug Emporium's Hunt stressed that the chain gives its store managers a good deal of flexibility, making it possible for them to modify planograms when necessary, cutting back on general market shampoos in African-American neighborhoods, for example.

"The African-American customer is very important to us," said Hunt. "They spend more on beauty care than the typical Anglo-Saxon consumer. We want to satisfy that customer and build a relationship with them. And I'd say that in the last few years, we may have increased our penetration of that market by 10 percent or more."

Innovative promotions

Drug Emporium stores also do a lot of in-store events with ethnic product manufacturers. They do demonstrations, give out free samples and participate in the Polaroid/Pro Line Easter Bunny promotion, giving away free pictures of children posing with the Easter Bunny in their stores.

The chain is in the early stages of experimenting with some target marketing promotions with manufacturer partners like Colgate-Palmolive and Chesebrough Ponds.

"When we do a mailing to African-American households, we'll talk with these manufacturers to find out which of their brands have a high penetration of African-American households. Irish Spring, for example, is very popular with African-American shoppers," said Hunt.

"The manufacturer tells us which brands do well with a certain demographic group, and then we compare than to our own customer data base. Then we do the mailings just to those households.

"It makes a lot of sense. It gives us another way to be of service to our customers."

This year, Hunt said, he also plans to do a 50-cents-off instant redeemable coupon with Revlon's Creme of Relaxer brand; a bonus offer with Alberto's TCB line at Easter and possibly a J.M. Products promotion that offers free art prints as a purchase incentive.

Innovative promotions

Last fall, Harco Drug staged its first annual Harco Drug Ethnic Beauty Fair at a local mall.