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HAIR CARE & COLOR: U.S.RESEARCH BRIEFING | AUGUST 4, 2016
BENCHMARKING
EDUCATION
RESEARCH
BENCHMARKING DIGITAL PERFORMANCE
UPCOMING EVENTSBRIEFING
VIDEOLondon, Geneva, Paris
September 13, 14, 15
BRIEFING
DEPARTMENTSTORESNew York
August 11
BRIEFING
DATA & TARGETINGNew York
September 22
BRIEFING
DEATH OF THE AD COMPLEXLondon, Paris
October 4,5
A clinic for L2 members spotlighting
the biggest winners & losers in digital
for retail, media, and social platforms.
OCTOBER 20, 2016The New SchoolNew York
Q3 RESEARCHJuly August
Digital IQ Index®:
BEER UK
Digital IQ Index®:
SPECIALTYRETAIL
September
Digital IQ Index®:
BEER CHINA
Digital IQ Index®:
HAIR CARE& COLOR Digital IQ Index®:
SPECIALTY RETAIL UK
Intelligence Report:
DATA &TARGETING
Digital IQ Index®:
CPG CHINA
Intelligence Report:
SOCIALPLATFORMS
Intelligence Report:
VIDEODigital IQ Index®:
DEPARTMENT STORES
Membership
Digital IQ
Amazon IQ
Category IQ
Strategy Modules
Executive Education
For brands whose bottom line is impacted
by their performance on Amazon
L2 offers an immersive, longitudinal analysis of a brand’s performance
and delivers tactical recommendations to improve ROI.
Understand OpportunitiesAudit of Amazon specific investment opportunities.
Optimize ResultsInvestment impact analysis and best-in-class case studies
shape Amazon strategies and direct marketing spend.
Track & BenchmarkLongitudinal tracking of brand KPIs, benchmarked
against competitors.
INTRODUCTIONHAIR CARE & COLOR 2016
3.0%
0.3%
-0.9%
-0.5%
-0.1%
0.2% 0.1% 0.1%
-0.2% -0.1%
0.00%
2014–2015Beauty US: YoY Change in Share of Retail Value
TRADITIONAL CHANNELS CONTRACTING
HAIR CARECOLOR COSMETICS
DrugstoresDirectSelling
DepartmentStores
InternetRetail
BeautySpecialty
Super-markets
DirectSelling
Internetretail
BeautySpecialty
Drugstores HairSalons
US & UK, March 1–April 30, 2016Beauty Ecommerce Share, by Product Category
HAIR CARE STILL STRUGGLES ONLINE
Source: HookLogic, “Beauty Buyers Shift Online: Category Deep Dive,” June 29, 2016.
55%
11%
11%
9%
6%
55%
36%
4%
2%
4%
Makeup
Fragrance
Hair Care
Nail Care
Beauty Tools
Share of Traffic Share of Sales Value
- - - - - Baseline (Indexed to 100)US & UK, March 1–April 30, 2016Beauty Conversion Rate Index, by Product Category
TRAILING CONVERSION RATES
Source: HookLogic, “Beauty Buyers Shift Online: Category Deep Dive,” June 29, 2016.
112 108
89 85
51
Fragrances Cosmetics Hair Care Beauty Tools Nail Care
59%
48%44%
35%
23%
16%19%
28%
42%
26%
9%13%
Multiple Images Product Videos Tutorials Link to PDP
Diagnostic Tool Advanced Filters UGC
Beauty 2015 Hair Care & Color 2016
October 2015 (112 Beauty Brand Sites) & July 2016 (72 Hair Brand Sites)Adoption of Content / Conversion Assets Across Beauty vs. Hair Sites
WHY? CONVERSION ASSETS LACKING
Analysis by L2.
US & UK, March 1–April 30, 2016Beauty Digital Shopping Cart Metrics, by Category
WHY? AOV VS. SHIP-TO-WEIGHT
Source: HookLogic, “Beauty Buyers Shift Online: Category Deep Dive,” June 29, 2016
$142.17
$115.33
$97.28
$65.76 $62.45
Fragrances BeautyTools
Cosmetics Nail Care Hair Care
$34.74$20.74 $21.34
$12.33 $10.53
Fragrances BeautyTools
Cosmetics Nail Care Hair Care
AVG. CART VALUE AVG. CART ITEM PRICE
July 2016Sephora, Amazon and UltaTop 10 Brands Accounting for Top-50 Hair Care & Color Products, by Retailer
AMAZON IS A GROWTH CHANNEL
Analysis by L2.
“PRO” LINES ARE BLURRING
Self-Described as “Professional” / “Salon
Brand”
Link for Salon
Owners in
Primary Nav?
Owned
salon(s)?
Salon locator
on site
Distributing
Officially on
Amazon?
Award-Winning Professional Hair Care
Products
Macadamia Professional offers salon-quality
hair care
Farouk Systems… is a Houston-based
company that manufactures high-quality
professional hair care products
The Award-winning line is sold through specialty
retailers, professional salons…
Sold exclusively through authorized salons,
spas, retail and department stores
Phyto [is] a leader in… salon-quality formulas
---Wholesale Price of Product ---Price of Product Sold by Third-Party MerchantBefore and After Oribe Began to Officially Distribute on Amazon Luxury Beauty (Dec. 2016)Amazon.com: Price of Oribe Gold Lust Conditioner
DISTRIBUTION = PRICE STABILIZATION
*See appendix for more granular data on Phyto and Oribe pricing
BEFORE OFFICIAL
DISTRIBUTION
DISTRIBUTING ON
LUXURY BEAUTY
Ulta Removes Pro vs. Consumer Distinctions in Navigation
RETAILERS FOLLOWING SUIT
July 2013: 12 Links
January 2015: 33 links
July 2016 (Today): 36 links
?
…While expanding navigation options for Treatment and Styling
Search term ◼ blowout ◼ dry bar
January 2008–July 2016Hair Care: US Google Monthly Search Volume
NEW BUSINESS MODELS
Drybar Launch
2009 2010 2011 2012 2013 2014 2015 2016
Drybar Path to Growth
BETTING ON OMNICHANNEL
Feb 2010First Opening in Brentwood, CA$250K Investment from brother
+ $50K personal savings
2016Predicted
$100M in Sales
2008Straight-At-Home
At-home $40 Blowouts
2013$10M Debt Financing
and new CEO, John HeffnerFormerly at OPI
Jan 2012$16M Private Equity
Jun 2014$20M Private Equity
Apr 2016Ulta Launch
Mar 2013Launches Products
& Styling Tools in Salons and Sephora
May 2013
July 2016
ULTA’S GROWTH DRIVER AS WELL
Source: ULTA Beauty Q3 2015 Earnings Report, as reported by Beauty Store Business.
Salon business growing 20% YoY (10.9% comps)
22k online appointment bookings per month, 67% from new guests
Increase in average ticket driven by growth in add-on services
(conditioning, treatments)
2014–2015Change in Viewership of Top 25 Cable Networks
TV VIEWERSHIP IS DOWN…
Source: Nielsen.
-25% -25%-23%
-20%-19%-19%-18%
-15%-15%-14%-14%-12% -12%
-9% -9% -8% -7% -7%
-4%
-1%
2% 3%
8% 9%
15%
HIS
T
A&
E
MT
V
Com
ed
y
US
A
TL
C
FX
SY
FY
NA
N
FA
M
TN
T
BR
AV
O
Sp
ike
TB
S
VH
1
ES
PN
LIF
E
Dis
ne
y
FO
OD
AD
SM
E!
DIS
C
HG
TV
AM
C
TO
ON
April 1, 2015–March 31, 2016, n=200 BrandsOrganic Views Divided by Quartile, Ad Spend for National AiringsAverage TV Ad Spend per Channel, by Total Organic YouTube Views
BUT 2ND SCREEN EFFECTS PERSIST
Source: L2 Intelligence Report: Video 2016, June 2016; L2 Analysis of Strike Social & iSpotTV Data.
$16,551,899
$35,707,499
$52,239,509
$73,793,175
<300KOrganic Views
300K–1MOrganic Views
1M–2.7MOrganic Views
>2.7MOrganic Views
n=49 brands n=53 brands n=47 brands n=48 brands
2.5
2.5
3.2
3.5
3.9
Living proof.
Redken
Matrix
DevaCurl
SheaMoisture
June 28–July 17, 2016By Brand, n=18 Brands, n=1.1K PostBeauty & Hair Care: Share of Snapchat Post Volume
VIDEO CONTENT MODELS IN FLUX…
DevaCurl34%
Shea Moisture
19%
Living proof.5%
Redken10%
Matrix8%
Schwarzkopf4%
Schwarzkopf Professional
3%
TIGI Bed Head5%
Toni & Guy Hair Meet Wardrobe
2%0%
Other10%
AVERAGE DAY ACTIVE PER WEEK
EVEN SO…
n=279 Brands, n=8.3M Facebook, 307M Instagram and 92.6M YouTube InteractionsUS or Global Accounts, Q2 2016Share of Posts & Interactions, by Category
HAIR UNDER INDEXES IN SOCIAL
Color Cosmetics
76%Skincare
14%
Fragrance5%
Consumer Hair Care
4%
Professional Hair Care
1%
Color Cosmetics
43%
Skincare24%
Fragrance5%
Consumer Hair Care
13%
Professional Hair Care
15%
SHARE OF INTERACTIONSSHARE OF POSTS
Search term ◼ ouai ◼ jen atkinGoogle Search Volume & Select Instagram Posts
INFLUENCERS STILL THE UNLOCK
706K
758K
950K
@JenAtkinhair Instagram mentions from
Kim Kardashian and Kylie Jenner drive on avg 830K
interactions – amplification of 8.8X @theOuai’s total
community size
JAN ’16 APR ’16 JUL ’16
Guy Tang: Blockbuster Brand Partnerships
SIMILAR IMPACT ON INSTAGRAM
Guy Tang + Pravana Product
Partnership (Balayage Kit)Incentivized to Tag Brand in
Personal Instagram Content
Colorist Content Posted on
Brand Channel
METHODOLOGYHAIR CARE & COLOR 2016
METHODOLOGY
DIMENSION:
SITE &ECOMMERCE
40%
TECHNOLOGY: Response Time, Load Time
SEARCH & NAVIGATION: Filtering/Sorting, Quick View, Keyword Search,
Guided Selling Tools
CUSTOMER SERVICE & STORE LOCATOR: FAQs,
Contact Us, Live Chat, Persistent Store/Salon Locator, Mapping Directions,
Location Type, Product Availability, Functioning Geolocation
PRODUCT PAGES: Content Integration, User Reviews/Ratings, Support for
Offline Path to Purchase
E-COMMERCE: DTC Checkout, 3P Cart, “Buy Now” Links
PRO or CONSUMER ACCOUNT & LOYALTY: Utility
RETAILER.COM (if present): Visibility & Merchandising Efforts on:
- Amazon or Amazon Gray Market
- Walmart
- Target
- JC Penney
- Specialists: Ulta, Sally Beauty, Sephora, Sleek Hair
Note: Colored text represents methodology elements that have been added / changed since 2015.
25%
DIMENSION:
DIGITALMARKETING
METHODOLOGY
SEARCH: Traffic, Web Authority, SEO/SEM, Brand Visibility Across
2,500+ Non-Branded Search Terms in 5 Sub-Categories (where
applicable)
ADVERTISING: Desktop & Video Display Ad Impressions, Creative
Units, Retargeting, Share of Voice within Category
EARNED MEDIA: Reddit and Blog Mentions, Selective Presence on
Industry-Specific Content Aggregating Sites
EMAIL MARKETING: Ease of Sign-up, Frequency, Estimated List
Size, Read Rate, Inbox Placement, Employ of Trigger Tactics
Note: Colored text represents methodology elements that have been added / changed since 2015.
15%
METHODOLOGY
DIMENSION:
SOCIALMEDIA
FACEBOOK: Reach, Total Post Engagement (12-months), Average
Interactions Per Post
INSTAGRAM: Reach, Total Post Engagement (12-months), Average
Interactions Per Post, Post Frequency, Social Commerce
YOUTUBE: Search Visibility, Channel Experience, Video Views (12-
months), Content Sponsorship, Optimization of Most-Viewed Content
TWITTER: Reach, Engagement (12-months), Tweet Frequency,
Programming Tactics
PINTEREST (if applicable): Active Platform Presence, Reach, Support
for Buyable Pins from Mobile App
SNAPCHAT (if applicable): Active Platform Presence, Snap
Frequency, Product and/or Tutorial Snap Content, Paid Activity
Note: Colored text represents methodology elements that have been added / changed since 2015.
METHODOLOGY
20%
DIMENSION:
MOBILE SMARTPHONE EXPERIENCE: Responsive Time, Compatibility &
Functionality, Geolocation, Click-to-Call, Mobile Checkout, Support for
Expedited Payment Methods
MOBILE SEARCH: “Above-the-Fold” Visibility via
Organic or Paid Results Site Identified as “Mobile-Friendly,” Paid Ad
Extension, Brand Visibility in PLAs (if applicable)
MOBILE ADVERTISING (if applicable): Mobile & Tablet Display Ad
Impressions, Creative Units
MOBILE APPS (if applicable): Support for iOS & Android, Rank
History, Featured Status, Notifications, Location Services, Touch ID
Support, In-App Commerce, In-Store Functionality, Loyalty Integration
Note: Colored text represents methodology elements that have been added / changed since 2015.
Brands are Parsed into Five Categories Based on Digital IQ Index® Score
CATEGORIZING RESULTS
GENIUS140+
AVERAGE90–109
CHALLENGED70–89
FEEBLE<70
GIFTED110–139
RANKINGHAIR CARE & COLOR 2016
L2 DIGITAL IQ INDEX®:RANK BRAND Digital IQ
69Sanofi
79
72High Ridge Brands
77
74Henkel AG & Co KGaA
70
76L’Oréal Group
69
77Dr. Miracle's, LLC
68
78High Ridge Brands
65
RANK BRAND Digital IQ
79Helen of Troy
62
80Strength of Nature
56
FEEBLE CHALLENGED
L2 DIGITAL IQ INDEX®:RANK BRAND Digital IQ
55Pravana
90
58Henkel AG & Co KGaA
88
58Unilever Group
88
58Guthy-Renker
88
58Shiseido Co Ltd
88
63Avlon Industries
87
RANK BRAND Digital IQ
64Pierre Fabre
85
65Kao Corporation
83
65Miss Jessie's
83
67Ales Group
82
68High Ridge Brands
80
69Helen of Troy
79
AVERAGE CHALLENGED
RANK BRAND Digital IQ
49Revlon
92
49Unilever Group
92
49It's A 10, Inc.
92
52Procter & Gamble
91
52L'Oréal Group
91
52Vogue International
91
L2 DIGITAL IQ INDEX®:RANK BRAND Digital IQ
43L'Oréal Group
98
44L'Oréal Group
97
44Unilever Group
97
46Procter & Gamble
96
46Shiseido Co Ltd
96
48Pierre Fabre
95
AVERAGE
L2 DIGITAL IQ INDEX®:RANK BRAND Digital IQ
29Procter & Gamble
110
29Johnson & Johnson Inc
110
31Johnson & Johnson Inc
109
32Henkel AG & Co KGaA
108
33Johnson & Johnson Inc
107
34Combe
106
RANK BRAND Digital IQ
34L'Oréal Group
106
37Procter & Gamble
103
39Unilever Group
101
40The Estée Lauder Companies
100
41Namaste Laboratories
99
41L'Oréal Group
99
AVERAGE GIFTED
L2 DIGITAL IQ INDEX®:RANK BRAND Digital IQ
16John Paul Mitchell Systems
120
16Procter & Gamble
120
18Deva Concepts, LLC.
119
19Procter & Gamble
117
19Revlon
117
19Unilever Group
117
RANK BRAND Digital IQ
22Procter & Gamble
116
23L'Oréal Group
115
24Living Proof
114
25Procter & Gamble
113
27L'Oréal Group
112
27Sundial Brands, LLC
112
GIFTED
L2 DIGITAL IQ INDEX®:RANK BRAND Digital IQ
4L'Oréal Group
137
5Procter & Gamble
134
6The Estée Lauder Companies
133
6Unilever Group
133
8The Estée Lauder Companies
130
9Kao Corporation
128
RANK BRAND Digital IQ
9Moroccanoil
128
9Unilever Group
128
12L'Oréal Group
127
13L’Oréal Group
125
14Procter & Gamble
123
15Unilever Group
122
GIFTED
RANK BRAND PARENT DIGITAL IQ
3 L'Oréal Group 140
L2 DIGITAL IQ INDEX®:
1 Advertising features influencers and connects to shoppable how-to content on site.
2 Embracing rapidly growing Snapchat with native ads in Snapchat Discover stories.
3 Banner ads and full page displays for product lines drive strong visibility on Walmart.com.
IN THE COMPANY OF GENIUS
21 3
RANK BRAND PARENT DIGITAL IQ
2 Procter & Gamble 149
L2 DIGITAL IQ INDEX®:
1 The “Strong is Beautiful: Dad-Dos” campaign garnered 7.5 million views on YouTube.
2 Investments on Amazon, including participation in Amazon Prime and Amazon Fresh, help
drive visibility for category keywords.
3 Geo-targeted video ads offer coupons and direct viewers to the nearest Costco store.
12
3
IN THE COMPANY OF GENIUS
RANK BRAND PARENT DIGITAL IQ
1 L'Oréal Group 166
L2 DIGITAL IQ INDEX®:
1 Strong product pages feature how-to content, UGC, and live chat
2 Incentivizes account sign up with personalized offers and samples
3 Top performance in mobile search with deep links for product pages and
store locators
3
1 2
IN THE COMPANY OF GENIUS
4%
29%
24% 24%
19%
Genius Gifted Average Challenged Feeble
Genius Gifted Average Challenged Feeble
Percentage of Brands Per Digital IQ Class, n=70Hair Care & Color 2015: Digital IQ Distribution
DISTRIBUTION: 2015
4%
36%
32%
21%
7%
Genius Gifted Average Challenged Feeble
Genius Gifted Average Challenged Feeble
Percentage of Brands Per Digital IQ Class, n=72Hair Care & Color 2016: Digital IQ Distribution
DISTRIBUTION: 2016
2015–2016 Digital IQ Percentile RankBiggest Winners & Losers
BIGGEST MOVERS
40%
-39%
ChallengedGifted
ChallengedFeeble
-29%
34%
ChallengedAverage
GiftedAverage
39%
-32%
ChallengedGifted
GiftedAverage
31%
-25%
FeebleAverage
GiftedGifted
27%
-22%
AverageGifted
AverageChallenged
121116 114
110 109
92 89
74
EstéeLauder
n=3
Proctor &Gamble
n=11
L'Oréaln=13
Unilevern=8
Johnson &Johnson
n=3
Shiseidon = 2
Henkeln=4
High Ridgen=3
Avg. DIQ
% Change+4% +5% +1% +1% -12% -1% +6% -4%
July 2016Hair Care & Color: Average Digital IQ Index® Score by Parent Company
ENTERPRISE VALUE
Source: L2 Inc., Digital IQ Index®: Hair Care & Color 2016.
GENIUS
GIFTED
AVERAGE
CHALLENGED
FEEBLE
KEY FINDINGSHAIR CARE & COLOR 2016
55%
23%
44%35%
23%
71%79%
42%
26%
9%
Tutorials Guided Selling inPrimary Navigation
Tutorials Link to PDP Diagnostic Tool Advanced Filter*
Beauty 2015 Hair Care & Color 2016
October 2015 (112 Beauty Brand Sites) & July 2016 (72 Hair Brand Sites)Percentage of Sites That Employ Guided Selling Feature
FAILING TO CLOSE THE LOOP
Analysis by L2. *Rescored Hair Care in Q1 2016.
BEAUTY OVER-INDEXINGHAIR OVER-INDEXING
29% of Hair Care Tutorials do not link
to PDPs – vs. 11% of Beauty Tutorials
WINNERS DIALING UP CONTENT
New expanded navigation bar includes portal for professionals
Video tutorials with featured products sit in a new inspiration section
BEFORE: JULY 2015 AFTER: AUGUST 2016
ONE-CLICK DIAGNOSTIC
1. Highly visual one-click “diagnostic”
2. Product integrated/shoppable
3. Integrated UGC
4. Video tutorials by curl type – linked from primary
navigation
5. Videos tagged with shoppable product call-outs
6. Promoting sampling set to drive trial
55%
35%
14%11%
4%
53%
35%
14%
7% 9%
Store Locator Any Directions Directions withoutLeaving Site
Live Chat Auto DetectsLocation
2015 20162015–2016, n=68 Brands Present Across StudiesPercentage of Brands with Given Customer Service ImplementationsHair Care & Color; Brand Site Investments
CUSTOMER SERVICE STAGNATES
Source: Hair Care & Color Digital IQ 2016, L2 Inc.
Brands pulling back investments in Live Chat
Features updated pro education portal and business tools
REDKEN REFRESH: PRO & CONSUMER
New best-in-class salon finder with directions on site
REDKEN.COM REDKENSALON.COM
June 2016, n=43 Consumer Brands, n=29 Professional BrandsHair Care: Distribution Channels, by Category
PRO HAIR CHANNELS PROLIFERATE
70%
42%37%
12% 9%7%
86%
62%
38%
14%
Amazon Sleek Hair Ulta J.C. Penney Sephora
Consumer Professional
ABBA
AG HAIR
PHYTOBATISTE
NOT YOUR MOTHER’SCHI
SHEA MOISTURE
SEXY HAIR
ALTERNAJOHN FRIEDA
REDKEN
PUREOLOGYOGX
LORÉAL PARIS
CAROL’S DAUGHTER
NIOXINCLAIROL
1
3
5
7
0% 1% 2% 3% 4% 5% 6% 7% 8%
Ave
rage
Pa
ge
Ra
nk
Percent of Total Results
Henkel Kao Corp. L'Oréal Group Procter & Gamble Unilever
June 2016, n=42 Brands, n=981 Results for 59 Category KeywordsHair Care: Visibility and Page Rank, on Ulta
HENKEL WINNING ON ULTA
Avg. Reviews for Top 5 Products
REDKEN SALONS
ALTERNA OWNING BEST SELLERS
…and owns 39% of top results for trending “natural hair products”
Consistently
featured in
category
best-sellers
carousels
June 2016 Avg. Reviews for Top 5 Productsn=51 Brands, n=1,075 Results for 59 Category KeywordsHair Care: Visibility and Page Rank, on Amazon
AMAZON FUELING INDIE BRANDS
ARTNATURALS
L’ORÉAL PARISGARNIER
TRESÈMME
JOHN FRIEDA
PURA D’OR
CLAIROL
MANIC PANIC
MAJESTIC PURE
MOROCCANOIL
ARCTIC FOX
BIG SEXY HAIR
NIOXIN
REDKEN
REVLON
FEKKAI
MATRIX
1
3
5
7
9
11
13
15
17
19
0% 1% 2% 3% 4% 5% 6%
AV
ER
AG
E P
AG
E R
AN
K
PERCENT OF TOTAL RESULTS
AMAZON
L’ORÉAL PARIS
GARNIER
SALLY BEAUTYYOUTUBE
AMAZON
SEPHORA
L’ORÉAL PARIS
YOUTUBEPINTEREST
AMAZON
YOUTUBEULTA
AMAZON
ULTA
SEPHORA
WALMART
L’ORÉAL PARIS
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0% 10% 20% 30% 40% 50% 60% 70% 80%
PA
ID V
ISIB
ILIT
Y
ORGANIC VISIBILITY
Color Conditions Multicultural Styling TreatmentJune 2016, n=2,824 KeywordsPercentage of Non-branded Search Queries for Which Site AppearsGoogle Organic and Paid Search Visibility: Hair
& DOUBLING DOWN ON THE CATEGORY
Source: L2
Change in Visibility, Q1 2016 vs. Q2 2016, n=263 KeywordsBeauty: Category Search
WINNERS & LOSERS: STYLE / CARE
WINNERS
HAIR CARE
ORGANIC PAID
BRAND Δ BRAND Δ
+10% +29%
+5% +20%
+4% +15%
+3% +8%
+3% +8%
LOSERS
HAIR CARE
ORGANIC PAID
BRAND Δ BRAND Δ
-6% -21%
-5% -16%
-4% -13%
-3% -6%
-2% -6%
Search term ◼ cowash ◼ co wash
January 2004–July 2016Hair Care: US Google Monthly Search Volume
AMAZON’S BLIND SPOT?
JULY 2016
2005 2007 2009 2011 2013 2015
VS. FAST FOLLOWERS
CLAIROL
CLAIROL PRO
GARNIER
L’ORÉAL PARIS
MADISON-REED
MATRIX
REDKEN
SCHWARZKOPF
WELLA
AVEDAHEAD & SHOULDERS
L’ORÉAL PARIS
MATRIX
SOFTSHEEN-CARSON
GARNIERL’ORÉAL PARIS
GARNIERL’ORÉAL PARIS
MATRIX
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
PA
ID V
ISIB
ILIT
Y
ORGANIC VISIBILITY
Color Conditions Multicultural Styling TreatmentJune 2016, n=2,824 KeywordsPercentage of Non-branded Search Queries for Which Brand AppearsGoogle Organic and Paid Search Visibility: Hair
DISRUPTORS EMERGING
Source: L2
DIVERSE & AUTHENTIC INSTAGRAM
Innovation and Customization Drive Organic Visibility
THERE’S AN APP FOR THAT
DIAGNOSTIC TOOLS ON SITE TOP-RATED MOBILE APP
L’ORÉAL PROFESSIONNEL
PUREOLOGY PRAVANA
OUAI
BUMBLE &BUMBLE
KÉRASTASE
LIVING PROOF
FEKKAI
SHU UEMURA
PAUL MITCHELL
REDKEN
MATRIX
DR. MIRACLE’S
MISS JESSIE’S
DEVACURL
MIZANI
CAROL’S DAUGHTER
GARNIER
NEUTROGENA
DOVE
TRESEMME
PRO
MULTICULTURAL
CONSUMER
0%
5%
10%
15%
20%
25%
30%
35%
0%10%20%30%40%50%60%70%80%90%100%
RE
AD
RA
TE
AVERAGE EMAIL SEGMENT (PERCENTAGE OF TOTAL LIST SIZE)
Q2 2016, n=25 Brands Max List SizeProfessional: Segmentation of Email vs. Read Rate
EMAIL SEGMENTATION EFFORTS VARY
Implementing a Segmentation Strategy
WINNERS FOCUS ON DATA CAPTURE
HOW WOULD YOU DESCRIBE
YOUR HAIR COLOR?Haircuts
Styling
Hair color
Men’s Services
Perms and relaxers
KeraTriplex© Treatment
Blow-out
Wash House™
What services are you interested in? (Please check all that apply)
CUSTOMIZATION REQUEST SEGMENTATION STRATEGY
MOVE TOWARDS TARGETINGFOCUS ON REPLENISHMENT
/ TRAVEL SIZES
TRIGGERED EMAIL
/ DISCOUNT
TRIAL-ORIENTED
SAMPLING
Q2 Advertising Push: Sampling and Curls
DRIVING TRIAL ACROSS CHANNELS
SAMPLING PUSH
SAMPLING LANDING PAGE
CURL-ORIENTED CONTENT / SAMPLING
Bumble & bumble owned 99% of competitive
impressions in Q2 through ads purchased 100%
via indirect (programmatic/ad network) channels
Q3 20151.2M
Q4 20151.6M
Q1 20161.8M
Q2 20162.0M
0.0
5.0
10.0
15.0
20.0
Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16
Likes Comments Shares Posts per Week
July 2015–2016, n=41 Facebook Pages with Complete DataHair Care & Color: Facebook Engagement by Quarter
BRANDS ADAPTING TO PAY-TO-PLAY
Source: L2 Inc., Digital IQ Index®: Hair Care & Color 2016.
IndexAverage:6.6 Posts per Week
66
392K 382K439K 446K
633K
530K
619K579K 585K
484K
616K
895K
490K
Q3 2016To Date
Q1–Q2 2016Professional Hair BrandsShare of Total Facebook Interactions by Brand
INDIE PRO BRANDS ACCELERATE
Q1: SHARE OF INTERACTIONS Q2: SHARE OF INTERACTIONS
Moroccanoil13%
Olaplex11%
Pravana9%
Paul Mitchell
7%
Kerastase6%Redken
6%Matrix
3%
Other L'Oreal Group
3%
American Crew15%
Nioxin5%
Sebastian Profession
al4%
Other P&G 3%
JOICO2%
Zotos1%
Bumble and
Bumble2%
0% 0%
Other12%
Vogue Int’l Coty ELC Henkel Indie J&J L’Oréal Group Revlon P&G Shiseido Co. Unilever
Moroccanoil5%
Olaplex0%
Pravana12%
Paul Mitchell
6%
Kerastase4%
Redken5%
Matrix3%
Other L'Oreal Group
2%American
Crew3%
Nioxin3%
Sebastian Professional
1%
Other P&G 10%
JOICO3%
Zotos0.06%
Bumble and Bumble
2% 0%0%
Other41%
January 1–July 25, 2016Moroccanoil Facebook Interactions per Post
PRODUCT-CENTRIC HERO STRATEGY
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
4/1/16 5/1/16 6/1/16 7/1/16
Interactions 5,873
Interactions4,283
Interactions 4,276
Q2 2016Hair Care & Color Brands n = 66Share of Total Instagram Posts and Interactions by Brand
PROS & COLORISTS DRIVING EMV
Q2: SHARE OF POSTS Q2: SHARE OF INTERACTIONS
Olaplex22% Drybar
5%
SheaMoisture4%
Ouai3%
Pravana3%
DevaCurl2%
Living Proof
1%
Moroccanoil
1%Oribe
1%
Miss Jessie's
1%0%
L'Oréal Paris16%
Carol's Daughter
8%
Redken2%
Matrix1%
Garnier1%
Revlon7%
Bumble & Bumble
3%
Aveda2%
Other16%
Olaplex3%
Drybar3%
SheaMoisture2%Ouai4%
Pravana0%
DevaCurl2%Living
Proof2%
Moroccanoil2%
Oribe2%
Miss Jessie's
7%
0%L'Oréal Paris9%
Carol's Daughter
4%Redken2%
Matrix3%Garnier
2%Revlon
2%
Bumble & Bumble
4%
Aveda2%
Other46%
0%0%0%0%0%
Vogue Int’l Coty ELC Henkel Indie J&J L’Oréal Group Revlon P&G Shiseido Co. Unilever
Olaplex: Top Engaged Instagram Posts Q2 2016
PRO-ORIENTED CONTENT
Top-engaged Olaplex content feature UGC by stylists, featuring no-frills treatments
/ transformations, with Pro-oriented descriptions specifying detailed coloring processes
2.2% 2.1% 2.1%
AUSSIEAVEENO DOVE
GARNIERHEAD & …
KMS CALIFORNIA
L’ORÉAL PARIS
PANTENE
PRAVANA, JOICO,TONI & GUY,BIG SEXY HAIR,ORGANIC ROOT STIMULATOR
REVLON
0%
20%
40%
60%
80%
100%
(5,000,000) - 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000
% V
IEW
S V
IA O
RG
AN
IC
TOTAL VIEWS
June 2015–June 2016, n=64 Brands with Complete DataHair Care & Color: Reach, Post Frequency & Engagement
VIRAL VIDEO MYTH
Source: L2 Analysis of Strike Social Data.
ORGANIC HITLACKING SUPPORT
PAYING TO PLAYLIMITED ROI
January 2016Pantene: “Strong Is Beautiful: Dad-Do” Campaign
LONGTAIL OF ORGANIC ASSETS
30-SECOND TV SPOT ADDITIONAL ORGANIC ASSETS
97 National Airings (Including Super Bowl 50)
7.5M Views
92% Paid Views
Pantene invested heavily in its “Strong is Beautiful: Dad-Do” video series featuring NFL players,
but achieved organic traction with supplementary “Dad-Do” videos
876K Views (51% Organic) 531K Views (51% Organic)
597K Views (52% Organic) 381K Views (57% Organic)
n=48,236 First Page Video Search Results, n=50 Hair Care & Color KeywordsMay 25, 2016–June 7, 2016Top Channels by Average Daily First Page Search Ownership
VLOGGERS OWN YOUTUBE SEARCH
Source: L2 Intelligence Report: Video 2016, June 2016.
n Influencer Channel
0.7%
0.8%
0.8%
0.9%
0.9%
0.9%
1.0%
1.6%
1.6%
4.8%
Blonde
Sayria Jade
Luxy Hair
AlexandrasGirlyTalk
BuzzFeedVideo
Bebexo
MakeupWearables Hairstyles
Nicole Skyes
Guy Tang
Cute Girls Hairstyles
Guy Tang: Blockbuster Brand Partnerships
PARTNERSHIPS IN PLAY
1.3M Subscribers75.0M Channel Views
◼ Mobile ◼ Desktop ◼ Tablet
2014–2016, n=1,000 Category KeywordsHair Care & Color: Mobile vs. Desktop Search Volume
SHIFT TOWARD MOBILE
Smartphone59%
Desktop32%
Tablet9%
Smartphone66%
Desktop26%
Tablet8%
Smartphone71%
Desktop22%
Tablet7%
2014 2015 2016
Customizing the Consumer’s Path-to-Purchase
OPTIMIZING FOR MOBILE
2-CLICK COMPARISON CONSUMER EDUCATION 3RD PARTY ECOMMERCE
CONCLUSIONSHAIR CARE & COLOR 2016
CONCLUSIONS
Playing With a Handicap: The Hair Care category faces inherent e-commerce challenges. AOVs are lower than any other Beauty category, flying in the face of already undesirable ship-to-weight ratios, while an average item price of $10.53 suggests the category e-commerce is still overwhelmingly driven by lower-margin consumer brands.
But Still Incremental Gains to be Made: Brands can still unlock whitespace with conversion optimization. Investments in tablestakes Beauty assets (multiple images, video, diagnostic tools, UGC) have not penetrated Hair Care & Color yet.
Amazon Threat is Very Real: Best-sellers in Hair on the Amazon platform are a 50/50 split of brands that do / do not officially distribute. Discounting can be up to 70% off MSRP, with associated counterfeit / expired product risks as well. Category search visibility is clear priority for Amazon, and the giant continues to bid indiscriminately on brand terms.
Move to the Middle, with Channel Implications: Blurring lines between consumer and professional haircare has incentivized newer “pro” brands to drive growth (both sales / awareness) on the Amazon platform, with less risk of damage to brand equity. Retail channels are also ground zero for new brands in the category, and these organizations have also begun to downplay the bifurcation of professional vs. consumer.
Television Not Going Anywhere, But… Traditional media budgets are still the unlock for second screen effects and longtail organic asset awareness. However, brands are increasingly experimenting with digital-first / digital-only blockbuster campaigns; newer entrants to TV have prioritized deeply integrated campaigns with cascading social amplification.
Prestige Earned-Media-Leaders Follow Makeup Category Trends: Visual content, coupled with tapping into key stylists / colorists and consumer communities, has allowed brands such as Pravana and Olaplex to drive outsized reach. 1-to-1 relationship of EMV vs. growth in the category also mirrors trends seen in makeup with indie brands.