Formulate for Success

May 20, 2010
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Whether it’s ketchup, hand lotion or laundry detergent, a product lasts longer when used in smaller amounts at a time. Perhaps this conservation technique explains why sales are down slightly in many hair care categories.

For example, data from Chicago-based SymphonyIRI Group Inc. (formerly Information Resources Inc.) covering the 52 weeks ending Feb. 21 show that dollar and unit sales in the overall hair conditioner/creme rinse category fell 3.0 percent and 4.5 percent, respectively. At the same time, dollar and unit sales in the private label hair conditioner/creme rinse category dropped 5.7 percent and 5.5 percent, respectively.

The overall shampoo category also experienced drops in dollar sales (1.4 percent) and unit sales (3.8 percent). During the same timeframe, the private label shampoo category saw declines in dollar sales (3.0 percent) and unit sales (4.1 percent).

The data do show strong private label sales performance in one hair care category, however: hair spray/spritz. Although the overall category realized drops in dollar sales (0.7 percent) and unit sales (4.7 percent), private label dollar sales rose 19.1 percent, while unit sales increased 9.6 percent.

Don't Give Up!

Poor recent sales performance doesn’t mean retailers should pull out of the hair care category, though. In fact, introducing a quality store brand alternative to a national brand item could be a good idea, says Kayla Fioravanti, chief formulator at Essential Wholesale Labs, Clackamas, Ore.

“The value and premium tiers are the most important factors in the field of hair care,” she says. “There are very few national brands that meet or exceed the organic content, green and toxin criteria that consumers are seeking today. This gives private label brands the opportunity to be the leader.”

According to Fioravanti, many consumers are becoming increasingly concerned that their hair care products might contain potentially harmful ingredients. In response to this fear, retailers could introduce all-natural private label products.

Recently, several new products were developed in response to the underground “No ‘Poo” (no shampoo) movement, which upholds the belief that many shampoos on the market today contain chemicals that do more harm than good to a person’s hair. Fioravanti says Essential Labs is developing a product for a client in response to this trend.

“We’re working on some things for some people that are going to be chemical-free,” Fioravanti notes. “[The products] are basically going to have light amounts of oil for conditioning. Things like broccoli seed oil that are a replacement for dimethicone.”

Kat Fay, senior beauty analyst at Mintel International Group, Chicago, agrees that certain hair-product ingredients could damage a person’s hair, and a “free from” claim could attract attention. Still, she thinks some brands’ “free from” claims are bogus - a product could say it is free from a perfectly harmless ingredient just to scare customers away from a competing brand that contains the said ingredient.

“It’s a very strange fear base,” Fay notes. “Consumers may not know what [an ingredient] is, but if I went through the trouble to tell you it’s not in this product, that can sometimes attract trial.”

There’s more to a hair care product than what is not in it, though. Fay says consumers are demanding certain ingredients - in particular, ingredients such as antioxidants that are normally found in foods and beverages.

“You’re going to see things like acai or the flavor trends - ginger and green tea and things like that,” Fay says, adding that she’s finding many conditioners that contain ingredients such as almond oil, olive oil or avocado extracts.

Skincare trends also seem to be crossing over into the hair care sector. Fay says she has seen “anti-aging shampoos” being advertised, which claim to offer consumers “more youthful hair.”

Another buzzword is “bamboo.” Fay says some hair care brands are incorporating it as an ingredient.

“Bamboo is a naturally strengthening plant,” she explains, adding that consumers often assume that a product containing bamboo will make their hair stronger.

And forget straight hairstyles - Fay adds that these days, curls are in.

“Everybody needs to embrace their waves and their curls right now. We’re seeing an uptick in products that are helping women that have naturally curly hair,” she says, stressing that many of the products allow curly haired women to keep their curls while reducing frizz.

More Than the Right Product

It could take more than the right product to get consumers to stand and take notice, though. The right package also is important, says Al Washington, senior marketing executive at Max Private Label, Chicago.

“You utilize packaging depending on the type of buyer,” he says. “For the high-price-point product, you need chic, fashionable and expensive-looking packaging. You must appeal to [the consumer’s] underlying desire to purchase prestige. Show them prestige on the shelf - possibly on an end cap.”

Washington adds that a value-seeking customer generally has less concern for the package type and is more interested in product volume.

“Appeal to these buyers with bonus packaging stressing quantity for less or equal money,” he says.

And for the more eco-conscious consumer, retailers could offer hair care formulations such as shampoos and conditioners in refill pouches that can be poured into a reusable bottle. According to Mintel’s Global New Products Database, refill pouches are considered niche hair care products, but they have growth potential if they’re marketed on a green and/or value platform.

Speaking of marketing, retailers will want to consider cutting-edge methods to market products in a category as trendy as hair care. Fioravanti believes social media is key to reaching consumers in today’s society, especially when it comes to informing them about hair care products.

“Consumers spend their time online creating relationships with each other and the companies they do business with,” she says. “I believe that today, if a company does not have a blog, newsletter, Twitter and Facebook accounts, it is just as bad as not having a sign on the outside of your store. The key to social media is being transparent and available to consumers.” PLB

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