Which Part of the US Professional Hair Market Saw the Strongest Sales in 2018?
The first half of 2018 results from a Kline PRO USA report is in. Haircare and affiliated salon services sales in the US saw growth, despite an overall decline in the industry.
Unlike previous years when Q1 sales routinely fall off after strong fourth quarters that are fueled by holiday activity and gift card sales, Q2 historically trends back up with an increase of 3% to 4%. That did not happen in 2018 − Q2 sales fell 0.6%.
The success stories
Colour and care categories
Despite the overall decline, there were pockets of growth and stories of success. The care categories registered gains in Q2 vs. Q1, with conditioners up 1.1% and shampoos surging by 3.7%. The three brands with the highest growth in Q2 are Eleven Australia at +84% (Miracle Hair Treatment was its leading item), Color Wow was up 37% (Dream Coat Anti-Humidity Hair Treatment was the no. 1 item), and Brazilian Blowout increased 36% (Açai Anti-Frizz Shampoo). Within the care categories, products that are focused on colour care still command the highest share of dollars at 20% of the market. Companies continue to introduce products into the colour care segment. Since the last quarter of 2017, new entries into the US market include Redken
Blondage, Matrix R.A.W. Colorcare, Pulp Riot, Paul Mitchell Platinum Blonde, and Amika Vault Color-Lock.
The demand for colour care products goes hand in hand with the investment that consumers make in hair colouring services. Colouring service revenues were up 0.4% in the first half of the year, now accounting for 27% of overall salon revenues according to Kline PRO USA. The average cost of a hair colouring service increased 1.5% from $70.90 in the first half of 2017 to $71.96 in 2018. Colouring services with the highest average price are balayage/ hair painting, ombre and virgin bleach.
The treatment service segment held two other services that experienced growth in both revenue and transaction count in the first half of 2018. In-salon clarifying treatments saw an increase of 17% in both measures. The average price of the service rose slightly to $22.61. Overall, clarifying treatments make up less than 1% of treatments but they are gaining focus as clients are becoming more in tune with the concept of detoxing. Salon products that are designed to clarify hair have seen a bump in sales so far in 2018. Several brands have stepped up to challenge segment leader Paul Mitchell (Shampoo Two and Shampoo Three).
Stand-alone bond builder treatments are the other service that had salons busier and bringing in 12% more revenue in 2018. This is not too surprising given the current trends in hair colouring that are quite extreme and can cause damage to the hair. Bond builder treatments have soared in popularity since the introduction of Olaplex nearly five years ago. Not only has there been an increase in salons performing the service, there has been a surge in the selection of brands to support the in-salon treatment as well as take home products for post-service care. Where Olaplex originally only offered No.3 Hair Perfector for at-home treatment, they are leveraging the brand and now have No.4 Shampoo and No.5 Conditioner. More recently, there are products intended for those that want to tackle re-bonding their hair as a DIY project. One such entry this year is Matrix Total Results Re-Bond line.
While hair colouring and treatment services saw an increase in revenues, that is not necessarily the case with most service categories. Total salon service revenues fell 0.8% in the first half of this year which, while not catastrophic, is still not great news. What is of significant concern, however, is the decrease in transaction count which is down 3.6% year to date. In response, salon owners have increased prices to compensate for the drop in traffic. The key is to find the optimal price point that won’t cause volume to fall even further.
Understanding the professional hair care marketplace is critical for both salon owners and product manufacturers. Kline PRO USA provides transaction-level data updated quarterly and supported by summary written reports. This service is now also available in the United Kingdom and Ireland markets.