The number of promotional offers in the haircare sector means brands are struggling to gain customer loyalty.
Some 60% of shampoos and conditioners have been bought on discount or multiple buy over the past year. As well as the obvious profit problems this poses, the number of promotional offers is damaging innovation and preventing growth.
"New products in this category are immediately standardised if they go straight on sale and, as such, become less exciting to customers," says Adam Briggs, hair category director at Unilever. "This means new product development is less likely to happen."
Rather than attempting to launch new brands, relaunches are becoming popular. Timotei and Vosene are among those trying to re-establish themselves.
"Brands that already have recognition among consumers are a good proposition if they are refreshed and their owners listen to what consumers want," adds Guy Revis, managing director of Lornamead, which owns Vosene. Its new message emphasises the shampoo's results and skin-friendly ingredients, while Timotei has been repackaged, resized and given new fragrances that play on natural, food-inspired themes such as kiwi, peach and oatmeal.
Bigger pack sizes have been introduced so that customers spend more with each purchase, and this has had some success in boosting profits. Brand loyalty is still low though, Briggs says, as consumers swap and buy what's on deal.
The brands that are growing are those that tap into the trends seen throughout the rest of the sector. Herbal Essences is doing well, thanks in part to the natural associations of its ingredients. Tresemmé remains popular, which Briggs believes is because its salon-positioned marketing gives consumers a feel of luxury at a value price. Dove and Head & Shoulders have focused their marketing on results-driven formulas.
Premium and specialised brands are also a growth area, with Aussie and John Frieda performing well, according to TNS. Analyst Andrew Russell believes this is because they appeal to shoppers who are serious about haircare.
"It's hard to maintain prestige if you're always on deal," he says. "If you really care about your hair you are more likely to turn to a brand that doesn't discount."
Hair colourants is the most dynamic sector within haircare and hasn't been affected by discounting. Economic instability could help boost colourants further as more people choose to cut costs by colouring their hair at home, say experts.
Briggs also believes conditioner could be a growth area, as the number of people who use the products is still relatively small and there is room for the market to expand. n