Salon hair care products set for big growth

Salon hair care product sales in both the US and Europe will
continue to perk up the stagnant hair care segment in the coming
years as more and more hairdressing businesses clue into greater
potential earnings. Simon Pitman reports.

According to the latest research from Datamonitor, the strongest growth is expected in Europe, where the rapidly expanding Central European market is helping to boost figures. Currently standing at $5.42 billion (€4.09bn), the market is projected to grow by 27.7 per cent by 2008 to reach $6.92 billion.

Although not so developed in the US, the $2.5 billion sector there is expected to grow 26.9 per cent to reach $3.18 billion by 2008.

"The products in this category fall into two groups: those that are sold in hairdressing salons and those that are used in the salons," said John Band, market analyst at Datamonitor.

"The product spread is much the same as that found in any high street store selling hair care products: conditioners, shampoos, colourants, relaxants and styling products. Also the formulation is often very similar to that of mainstream hair care products, the difference being the premium price that these products command."

Band says that the global growth of this category has been driven by demand in core emerging markets such as Central Europe and South Africa, where the rapid growth and development of up-market hair salons has fed some of the most significant growth.

"Likewise, growth in the developed markets in the US and Europe has also continued, with hairdressing salons using increasingly sophisticated marketing methods to sell hair care products," said Band. "Now, if you walk in to a top hairdresser's salon in a big Western European city, you can find sections that resemble supermarket aisles, all stacked high with a comprehensive range of hair care products."

What is key to the success of this segment is marketing. In both the European and US markets, Wella and L'Oreal hold the top two positions. Thse companies have benefited from the effectiveness of travelling sales reps, who win hairdressers over with brand loyalty agreements and added discounts.

"Indicative of the size of this category is the fact that advertisements for salon hair care products now appear in consumer magazines," says Band. "The idea behind this is that consumers spending time flicking through magazines while sitting in beauty and hairdresser salons will then be inspired to make on-the-spot purchases."