The category has cooled from double-digit growth the past two decades to more than 4% declines the past two years, according to figures from Information Resources Inc. reported by Deutsche Bank. The primary reason, according to some marketers: The population has aged to the point that more people are giving up hair coloring and fewer are starting.
Trying hard to cover the gray hairs popping up in the business, marketers are trying such approaches as root-touch-up kits, cartoon-decorated temporary dyes aimed at girls as young as tweens and computerized systems online and in stores that let consumers try on hair color before buying it. But they're fighting an uphill battle.
LACK OF INNOVATION
"Since most of the baby boomers are now in the category, the rate of consumers coming into the category has slowed significantly," said Patrice Louvet, VP-global retail hair colorants for Procter & Gamble Co., marketer of Clairol and Wella.
The oldest boomers are now 60, and as they age, more are giving up coloring their hair. Lately, the quitters have begun to outnumber the beginners, said another marketer who asked not to be identified.
In addition to demographics, a lack of innovation combined with rampant price promotion is working against the category, believes Mr. Louvet.
Clairol has been in a decade-long share decline, but its losses slowed in early 2005 and Mr. Louvet said the brand has gained ground on lines, such as Nice `n Easy and Natural Instincts, where it has focused marketing and innovation since P&G took over the brand in 2001. He sees this year's launch of Hydrience with Pantene conditioners delivering similar help for that line.
P&G recently signed celebrity colorist Brad Johns to jump-start innovation and pitch in on marketing and consumer education. Its Nice `n Easy Root Touch Up kit, a first for the category, is modestly exceeding expectations, Mr. Louvet said. Handled, appropriately enough, by Grey Worldwide, New York, he believes the brand has provided incremental revenue that's helping restore modest growth to mass hair-color through the early part of 2005 after the declines of 2003 and 2004.
Innovation needs to come in marketing, design and in-store presentation, too, he said. Having revamped its Web site last year to include a "Try-It-On Studio" where consumers can experiment with coloring the hair on their scanned-in photos, Clairol is testing a similar approach and other new measures in-store, too, he said.
L'Oreal has also struggled, losing share in the past year, though siblings Garnier and Softsheen Carson have made up the lost ground to provide modest share gains overall for L'Oreal USA.
L'Oreal declined to comment, but in its second-quarter revenue report cited professional colorants sold to salons and beauty-supply stores as a growth driver in North America while saying nothing about mass color. In an interview with Advertising Age last year, L'Oreal CEO-designate Jean-Paul Agon cited a shift from home to salon coloring among factors hurting mass hair color.
Consulting firm Kline & Co. also sees such a shift, noting an average 7% annual growth rate in the salon-hair-color business the past five years, compared to 2% for mass, though both sides have slowed the past two years, said Lenka Contreras, VP-consumer products.
L'Oreal has launched L'Oreal Hi-Light Styliste and Garnier Multi-Lights highlighting kits this year in an effort to lure highlighting business to mass from salons. And the brand aimed younger by launching Color Pulse this spring aimed at teens and younger with colors that come out after eight washes. McCann Erickson, New York, handles.
The only marketer seeing robust growth in mass color is Revlon, with sales up 9.2% to $79.4 million in the 52 weeks ended June 12. Unlike its rivals, Revlon has provided only light in-house marketing support behind its upscale High Dimension and value-priced ColorSilk brands, with the latter driving most growth. Revlon is emphasizing its upscale line in launches planned for 2006, including a new line of "Sultry Chestnuts" that are handled in-house.
"More women are going to salons, especially for difficult-to-master techniques such as highlighting," said Debra Dowd, VP-marketing, hair care for Revlon. "However, research and sales data show that consumers do respond to at-home products that are innovative and high-performing."