Hanging on by a hair
When it comes to hair care products, store brands are not very strong players. Data from Chicago-based Information Resources Inc. (IRI) for the 52 weeks ending May 18 show that dollar sales of store brand hair care products fell dramatically, with most subcategories recording double-digit drops.
One possible reason for declining sales in the store brand hair care category is that several value-positioned national brands are available (e.g., Suave, VO5) at a price that's similar to or even lower than private label products, states Shannon Romanowski, an analyst for global market research firm Mintel. Therefore, consumers don't feel the need to "trade down" to store brands when branded products are available.
Another reason for declining sales could be that consumers are not responding to the "copycat" approach retailers have taken with top-selling brands, she adds.
In this category specifically, national brand equivalent (NBE) messaging is definitely detrimental to store brand sales, says Steve Berry, "The Green Guy" and founder of Auburn Hills, Mich.-based Greenblendz Inc. NBE messaging influences consumers to perceive that the store brand product is substandard to a branded item, even if that isn't the case.
"When a national brand sits next to the [store] brand in a similar bottle, with a similar label — or worse, a callout such as 'compare to' — it diminishes the brand's identity," he adds.
Instead, retailers would do better to bring in a niche "treasure-hunt" brand that is relevant to its consumers' needs and then "get behind it" with promotions, trials and sampling, says Renee Barch-Niles, president, Emilia Personal Care, Dublin, Ohio. Sampling is incredibly important because shopping the hair care category can be an overwhelming experience for consumers. If the consumer gets overwhelmed, she might stick to a brand and product she already knows. But if a retailer could "hook" the shopper on its store brand through samples, that shopper will ignore the competition.
"Nothing is as powerful as a brand that is either niche or exclusive to a retailer once you have the shopper hooked," Barch-Niles adds.
Go way beyond basic
Currently, hair care is getting inspiration for new formulations from skin care, reports Euromonitor International, Chicago, in its July 2013 "Hair Care in the US" report. Recent innovations include anti-aging formulations that claim to restore the properties of youth or to preserve beauty with more natural and less damaging ingredients. With an aging population of women who have "exposed their hair to many chemicals and much heat over the decades," these products have become very popular as they claim to reverse the damage.
Additionally, consumer packaged goods are focusing more often on offering more healthful products. For example, sulfate-free products, natural ingredients and specialty oils are continuing to drive sales, Berry says. Consumers are interested in products that have removed synthetic and harmful ingredients, including parabens, preservatives, artificial fragrances and dyes.
And, of course, hair care products that fill specific needs for consumers remain popular. However, retailers might want to look beyond products that are color-safe or offer split-end repair in favor of products that target hair needs at different life stages, Romanowski states. Forty-eight percent of women aged 55 or older notice hair changes as they get older, and 28 percent think they need different products as they age. With an aging population outpacing total population growth, this consumer segment could present an opportunity for store brand hair care products.
Male-specific treatments that address thinning hair and scalp health could also be a real opportunity for store brands, Romanowski adds. In fact, IRI reported that the only private label hair care category that recorded growth during the 52 weeks ending May 18 was hair growth products.
One example of a national brand that seems to have seen the potential in this subcategory is Head & Shoulders. In February, it launched a Full & Thick Advanced Thickening Tonic for men, which is said to be designed to "thicken each individual strand" of hair.
Retailers might also want to rethink the way they merchandise store brand hair care products, Barch-Niles says. Instead of blocking hair care products by brand, retailers could explore the opportunity to block products by a "need state" or even by hair type. This practice could not only help the consumer to immediately find a solution to her problem, but also could create an added value to shopping one retailer over another.
In addition, retailers might want to take a fresh look at how hair care products are used. In today's on-the-go society, convenient single-use products that allow for easy hair touch-ups at the office, gym or even on public transportation could become a compelling purchase option, Romanowski says. For example, dry shampoos offered in single-dose packaging could work well as a quick and easy way to extend the life of a consumer's hairstyle or spot treat oily or dirty hair while she is away from home.
When it comes to hair care, the consumer is much more willing to experiment than in other categories, Barch-Niles says. She is willing to trade one brand for another if she believes the new brand will address her specific needs and desires. Instead of duplicating what's already on shelves, retailers would do well to be bold and take risks in this category.