Modern Salon - March 2008 - (Page 96)

White Paper HAIR COLOR BUSINESS: GREAT GROWTH By Cyrus Bulsara he hair color category has been one of the saving graces of the U.S. professional salon industry. This is true for both hair care service revenues and for product sales in particular. During the 2002-2007 period, when the all hair care products taken together grew only 3.2 percent, hair color product sales grew at 6.3 percent, nearly double the overall market growth rate. Hair color remains the largest major hair care category, showing consistently excellent and solid growth. It also propels hair care service revenues at salon level, with hair color revenues growing at around 5 percent over the last five years. At $644 million in 2007, it is the largest salon hair care product category. In the salon, hair color is projected to grow at approximately 5.5 percent over the next five years, with most of the business, understandabley, on the service side. In 2007, $590 million in product sales came from service or backbar products, T while $54 million came from sales of salon-retail hair color refreshers designed to keep hair color “salon fresh” between services. This projected growth is based on the demographic and fashion trends that have fueled the color business over the last 15 years. Salon gray coverage for an aging U.S. population will continue to grow, as the youngest of the baby boomers enter their mid-forties and millions remain in their high-spending fifties and early sixties. Young women and men alike use fashion color in following trends, like the shiny blonde “Beckham bob.” New technology accelerates growth, and much is coming through the pipeline this year. Groundbreaking R&D innovations like Proctor and Gamble’s “10-minute hair color,” initially launching this month in the mass retail market, will be adapted to salon color to drive traffic and volume. Finally, at-home hair color refreshers— COLOR LEADS THE BUSINESS Retail $54 (Backbar) Service $590 Color product sales at manufacturers’ $s (in millions) shampoos and conditioners that contain pigments, reflectors and conditioners that extend times between salon visits—are a secret profit asset, projected to grow salon retail hair color at double-digit rates. Going Up In 2007, hair color services at salon level grew by 5.3 percent from $12.54 billion to $13.20 billion. At the grassroots salon level, some new forces are working to expand color business. While several chains have integrated simple color services into their traditional cut-and-go operations, the real story is happening among independent contractors. Booth rental salons are the major new salon industry growth phenomenon in hair color. Continued on page 98 Service Type Cutting & styling Hair coloring Perming & relaxing Total of hair care services FASTEST GROWTH 2006 2007 25.85 12.54 8.64 47.0 Client dollars, in billions % Increase 2.7 5.3 2.0 3.3 26.55 13.20 8.81 48.6 96 PROCESS/MARCH 2008 www.modernsalon.com http://www.modernsalon.com

Table of Contents Feed for the Digital Edition of Modern Salon - March 2008

Modern Salon - March 2008 Contents Behind the Cover Notebook @ModernSalon.com Contributors Your Turn New-Now-Next Modern Portfolio Modern Reports Ask the Experts Choose Beauty In Full Bloom Color Fact Pack The Facts: Fact Pack Hair Color Business: Great Growth The Future of Color Case Study: Bad Hair Gone Good Professional Profile The List Metropolis Pleated Color Modern Update The Goods Personal Style

Modern Salon - March 2008

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