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Hair Care Lacks Luster

By: Briony Davies, Euromonitor International
Posted: October 7, 2008, from the August 2007 issue of GCI Magazine.

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Euromonitor International believes that, in the longer term, there is a danger that hair care will encounter the problem of over-segmentation. With hundreds of brands to choose from and in different added-benefit combinations, consumers will become increasingly confused as to which product is right for their hair. Hence, a simplification of supply may well be the way forward.

As a reaction to over-segmentation, the market could see the re-emergence of brands that make simple claims for good all-around results, segmented only by general hair types: normal, oily, dry and color-treated, for example. The market could also see the rise of the all-purpose brand—one that combines benefits so consumers do not have to pick and choose from a variety of products; for example, sun protection conditioner for colored hair, or hydrating and volume boosting shampoo. The relaunches seen throughout 2006—exemplified by Procter & Gamble’s Herbal Essences in the U.S. and Unilever’s Sunsilk—could be seen as an attempt to give brands a more unified look, so that they are clearly identifiable without being overwhelming, despite their highly segmented nature.

Men Offer Room to Maneuver

There is one obvious segmentation opportunity that has of yet been ill-explored, though is expected to become better established in the longer term: men’s hair care. Male-specific hair care sales were worth less than 5% of the global hair care sector. It is also the slowest growing area, by far, of the vibrant men’s grooming products environment. The majority of men’s hair care products consist of male-focused colorants to hide gray hair. However, the men’s colorants segment is nearing maturity. It is expected to see continued growth in coming years as more men buy such products, particularly as a result of the aging population, but it is not likely to be as strong as when these products were first introduced. Therefore, the majority of potential for growth lies with male-focused shampoos, conditioners and styling products.

Male-specific shampoos and conditioners have, for the most part, yet to meet with great success in markets outside of Japan. There is a needs-based question here. Unlike deodorants, where manufacturers have convinced men and women that they need separate products, a division has not been established in relation to shampoos and conditioners. Were manufacturers to push the notion that unisex shampoos are not appropriate for male hair, there might be greater segmentation and an opportunity to develop a new niche.

Megabranding Shows Little Sign of Abating

The continuation of the megabrand trend that began in 2005 was a prominent theme in hair care in 2006, with manufacturers such as Unilever, L’Oréal and Procter & Gamble leading the way. Megabrands have a broad presence across the hair care environment, as well as geographically, and attempt to cater to every hair care need. In a highly penetrated, competitive area, the megabrand enjoys strong recognition, and it provides a more accessible option in an environment where high segmentation is often confusing for consumers. The theory is that manufacturers can milk broader industry trends and target new lucrative groups—ethnic consumers, teens, seniors and consumers with special needs—while reinforcing brand equity. Procter & Gamble’s Pantene Pro-V, for example, benefited from the addition of Pantene Extra Liso for Hispanic women. Procter & Gamble also extended its Head & Shoulders range with the launch of Head & Shoulders Sensitive Care, an antidandruff shampoo designed for consumers with sensitive skin. Unilever is also concentrating on its leading brands, and, following a policy of divesting its poorer performers; its key Dove and Sunsilk brands were extended throughout 2006 while poorer performers Finesse and Aqua Net were put up for sale.