Walmart First to Market With New Hair-Care Innovation, Ahead of Frieda

Retailer Imports Fat Foam From Japan for Exclusive U.S. Launch, Beating National Brands to Shelves

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BATAVIA, Ohio (AdAge.com) -- As retail brands chip away at packaged-goods share, branded players can at least claim innovation as their domain. But now retail powerhouse Walmart has done some innovating of its own, with Fat Foam, a no-drip hair color product based on technology the retailer tracked down in Japan and launched in the U.S. more than six months ahead of national brand competitors.

Fat Foam, created and marketed by hair-care marketer Samy and sold exclusively through Walmart, came to market last month -- well ahead of John Frieda Precision Foam Color, a similar product from Japan's Kao Brands that's expected to launch in the U.S. in April.

Fat Foam allows users to go about their everyday lives while the color sets into their hair.
Fat Foam allows users to go about their everyday lives while the color sets into their hair.

Innovation starting in Japan and coming to the U.S. is nothing new, of course. Procter & Gamble Co.'s first Swiffer mop in 1999 was similar to a product Kao launched in Japan years earlier. But a retailer serving as conduit for the global technology transfer, beating national brands to the punch, is rare -- and a potentially sobering sign for packaged-goods players.

Michael Smith, senior buyer for hair care and hair color at Walmart, said the retailer became aware of the technology in Japan. He had just come into the business last year when he was searching hair color and came across a YouTube video from Japan where "the customer is having a very different experience from what we have in the U.S. in hair color, which is not a positive one."

The foam technology lets women put the color in and then "go about their day," he said, without having to worry about it dripping on the floor and staining clothes and furniture.

The company behind the product was Hoyu Co., which worked with Walmart Stores' Seiyu division in Japan. In 2008, in another sign of increasing globalization, Hoyu bought Samy, a "masstige" hair-care brand founded by Hispanic salon stylist Samuel Suarez in Miami more than a decade ago.

Samy planned a 2012 launch of Hoyu's foam hair color in the U.S., but Mr. Smith persuaded the company to launch it instead this September exclusively at Walmart for the first six months.

"We wanted to bring that forward and use our scale and our marketing muscle and everything to bring it early to the U.S.," he said.

Subsequently, Kao announced plans to bring its foam hair color product to the U.S. in April following a launch next month in the U.K. and previous distribution in Japan and Singapore.

Fat Foam isn't a conventional private label inasmuch as Samy eventually will make it available to other retailers next year. But it's a particularly gutsy move for a retailer to lead product innovation with a new brand in hair color, a category that's never had significant private label in the past, said global beauty consultant Colin Hession.

Because of the high risk of failure, hair color is one of the categories with the highest consumer resistance to trying private label or new brands, he said.

Hoyu produced TV ads to back the launch, and Walmart, via the Martin Agency, Richmond, Va., among others, has backed it with testimonial/demonstration videos from the retailer's ElevenMoms network of women bloggers -- all or parts of which are shown on YouTube, on the order page on Walmart.com, in store at endcap displays on the Walmart Smart Network and in rich video digital display ads on the web.

Early results for Fat Foam look positive, according to Carmen Bauza, VP-beauty and personal care for Walmart, who said sales were three times faster than expected in early weeks.

"This is the beginning of the path we're taking to continue to bring to market unique opportunities for our customers," Ms. Bauza said.

"In my opinion, it exemplifies Walmart's willingness and eagerness to partner with all suppliers, even smaller suppliers, to bring our customers true innovation that's exclusive to us for a certain period of time," said Colleen Sheedy, marketing manager for beauty and personal care at Walmart. Besides collaborating on the retail execution, Walmart also collaborated with Hoyu on developing the marketing, using many of its own programs, such as ElevenMoms and the Smart Network.

Online reviews so far, both from bloggers affiliated with Walmart and from others, have been overwhelmingly positive.

Still, neither Fat Foam nor John Frieda may be "much of an immediate threat" to market leaders L'Oréal and P&G, Mr. Hession said, though they'll likely need to respond if the products catch on long term. The fact that two Japanese companies already have the technology suggests it may not be hard for others to replicate.

The bigger threat may be Walmart flexing its muscle as an increasingly aggressive and sophisticated developer of beauty brands. Fat Foam follows Hard Candy, a cosmetics brand formerly sold in prestige outlets such as Sephora, which was converted to a Walmart exclusive brand last year.

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