Retailers, suppliers look to untangle hair care category

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Retailers, suppliers look to untangle hair care category

By Nora Caley - 11/21/2018
Just as hairstyles change, so do demographics and consumer trends — and they all are playing a big role in the future of the overall hair care category.

These simple facts have long forced manufacturers in this complicated, yet profitable, segment to develop merchandising strategies that demand a constant flow of innovation for a wide range of consumers, from selfie-taking millennials and health-conscious shoppers to multicultural consumers of all ages. The bottom line is that the shampoos, conditioners and styling products seeing sales growth are the ones that not only keep up with styles but also with the changing needs of today’s shoppers.

While suppliers have to stay ahead of the curve on new products, retailers are under pressure to make sure their shelves are full of the products these consumers demand, and at price points that will make these shoppers visit another store. Hair care always has been a difficult segment to merchandise in-store, and it may be more complex than ever now.

So how can retailers stay ahead of this category? The answer, many said, is to understand what the trends are and to make sure that store shelves are stocked with the hottest products. Xenia Barth, Henkel Beauty Care’s vice president of marketing for hair brands, for example, said she sees two important trends impacting the category. The first is the longtime trend of consumers seeking natural and organic products. “Beauty products that take inspiration from nature are booming across lifestyle areas,” she said.

This is particularly true of the millennial generation. “We see these consumers as confident and conscious life enthusiasts, interested in health, nature and overall well-being,” she said. “This group is willing to try out new things and they have a strong interest in meaningful products with relevant natural features.”

Barth said that millennials and younger Generation Z shoppers also are driving the second trend, which is the rise in sales of products that promote self-expression. These young consumers have a personal interest in an inclusive culture, she said, so they do not chase after one beauty ideal, but instead express diversity and individuality. They enjoy posting photos on social media, so they look to color and styling products that enable them to experiment and show off their creativity on such social media sites as Instagram and Pinterest.

Barth said these trends are reflected in sales figures. “Although there isn’t much movement in the traditional categories of color and styling, they are being re-dynamized

by trend color and creative products,” she said. Henkel, with U.S. consumer goods headquarters in Stamford, Conn., launched Schwarzkopf’s göt2b Color, which Barth said allows for self-expression with 15 shades of creative and exciting colors, including on-trend metallics and pastels.

Another continuously strong trend is that consumers want natural and organic ingredients, and also beneficial ingredients, such as vitamins and minerals. That is true not just in foods but also beauty products, such as hair care. “Products get absorbed through the scalp, and so do artificial ingredients and chemicals,” said Osman Mithavayani, vice president of OKAY Pure Naturals, based in Miami Gardens, Fla.

Mithavayani said OKAY provides hair care collections that are rich, nourishing and gentle for the hair and scalp. Retailers can benefit by including these natural products in their hair care assortments. “Carrying the OKAY brand lets consumers know that these stores take their consumers’ hair health seriously,” he said.

Multicultural Products
In addition to millennials seeking self-expression and consumers in general seeking natural and organic products, an audience to keep in mind is multicultural shoppers. “The hair care category sees growth every year,” Mithavayani said. “The growth is coming from multicultural consumers [who] are exponentially growing every year.”

He said OKAY is the No. 1 and fastest-growing brand for multicultural consumers. The company recently expanded its men’s care line with natural items that include OKAY Men’s All- Natural Hair and Beard shampoo, All-Natural Hair and Beard conditioner, All-Natural Hair Oil, Men’s Hair and Beard Pomade, and hair and beard gel made with natural ingredients. It also debuted the OKAY Baby line, including OKAY All Natural Baby Shampoo made with natural papaya extract, aloe, grapefruit extract, chamomile and jojoba.

More new products from OKAY include Black Jamaican Castor Oil with Lavender Hair Care and Black Jamaican Castor Oil Coconut Curls collection. The moisture and curling sorbets for curly, coil-shaped and textured hair work to moisturize, hydrate and style multicultural and curly hair. The brand also launched Coconut and Shea hair care, Coconut and Hibiscus hair care, and Coconut Curls Gardenia and Grapefruit hair care. These hair care collections consist of a shampoo, conditioner and leave-in conditioners.

Multicultural consumers are especially interested in natural hair products. According to Mintel’s recent report, “Black Haircare - US - 2018: Consumer market research report,” 40% of black women surveyed said they wear their hair natural — no chemicals — with no-heat styling, and 38% said they wear their hair natural with heat styling. Also, 70% of black women said they prefer to read ingredient labels in hair care products to avoid certain chemicals, and 43% of black women said they use five or more hair care products at home.

Manufacturers said reading labels and looking for healthful ingredients also is a growing trend. “Many people are taking a more customized approach to hair care and are more ingredient-conscious,” said Ebony Bomani, master cosmetologist and product educator at Huntsville, Ala.-based The Mane Choice Hair Solution. “Consumers are interested, more than ever, in using healthier ingredients on their hair. Our products are filled with quality vitamins and nutrients that help to support a healthier hair and scalp care regimen.”

The Mane Choice recently launched the Do It FRO The Culture collection for Afro-textured hair in Sally Beauty. The company also expanded the Tropical Moringa collection, which is for curly and wavy hair and is available in mass retailers.

As with any consumer goods category, innovation is the key to sales growth. “As a brand, we not only aim to fill a need, but also cultivate the desire for excellence,” Bomani said. “By going above and beyond to customize our products for the consumer to improve their experience, they always want to know what’s next.”

Small but Mighty
According to IRI, the Chicago-based market research firm, for the 52 weeks ended Sept. 9, total U.S. multi-outlet sales of shampoo totaled more than $3.16 billion, an increase of nearly 3% compared with the same period the previous year. Sales of conditioner totaled more than $2.19 billion, an increase of 3.2%. While some longtime brands were flat or saw small increases in sales, some newer, smaller brands had double-digit sales gains.

“Today, many niche, indie hair care brands are capturing shelf space, gaining momentum and market share,” said Jaime Kontz, associate director of product innovation at Vogue International, a Johnson & Johnson company. “This shift towards indie brands is impacting hair care sales in a significant way, and is triggering brands to think differently about what type of products they’re creating, who they’re speaking to, how they go to market, and how nimble and agile they can be.”

Kontz said the products that are getting the most at