Presentation

HAIR CARE & COLOR: U.S.
RESEARCH BRIEFING | AUGUST 4, 2016
BENCHMARKING DIGITAL PERFORMANCE
RESEARCH
BENCHMARKING
EDUCATION
UPCOMING EVENTS
BRIEFING
BRIEFING
BRIEFING
BRIEFING
DEPARTMENT
STORES
VIDEO
London, Geneva, Paris
DATA &
TARGETING
DEATH OF THE
AD COMPLEX
New York
September 13, 14, 15
New York
London, Paris
September 22
October 4,5
August 11
OCTOBER 20, 2016
The New School
New York
A clinic for L2 members spotlighting
the biggest winners & losers in digital
for retail, media, and social platforms.
Q3 RESEARCH
July
August
September
Digital IQ Index®:
Digital IQ Index®:
Digital IQ Index®:
BEER UK
BEER CHINA
CPG CHINA
Intelligence Report:
Digital IQ Index®:
Digital IQ Index®:
SPECIALTY
RETAIL
HAIR CARE
& COLOR
Intelligence Report:
Digital IQ Index®:
VIDEO
DEPARTMENT
STORES
SOCIAL
PLATFORMS
Digital IQ Index®:
SPECIALTY
RETAIL UK
Intelligence Report:
DATA &
TARGETING
For brands whose bottom line is impacted
by their performance on Amazon
Membership
L2 offers an immersive, longitudinal analysis of a brand’s performance
and delivers tactical recommendations to improve ROI.
Digital IQ
Amazon IQ
Category IQ
Strategy Modules
Executive Education
Understand Opportunities
Audit of Amazon specific investment opportunities.
Track & Benchmark
Longitudinal tracking of brand KPIs, benchmarked
against competitors.
Optimize Results
Investment impact analysis and best-in-class case studies
shape Amazon strategies and direct marketing spend.
HAIR CARE & COLOR 2016
INTRODUCTION
TRADITIONAL CHANNELS CONTRACTING
Beauty US: YoY Change in Share of Retail Value
2014–2015
COLOR COSMETICS
HAIR CARE
3.0%
0.3%
Drugstores
Internet
Retail
Beauty
Specialty
Direct
Selling
Department
Stores
-0.1%
-0.5%
-0.9%
0.2%
Internet
retail
0.1%
0.1%
Beauty Drugstores
Specialty
Supermarkets
-0.2%
Direct
Selling
0.00%
-0.1%
Hair
Salons
HAIR CARE STILL STRUGGLES ONLINE
Beauty Ecommerce Share, by Product Category
US & UK, March 1–April 30, 2016
Share of Traffic
Share of Sales Value
55%
55%
Makeup
Fragrance
11%
Hair Care
11%
Nail Care
Beauty Tools
36%
4%
9%
2%
6%
4%
Source: HookLogic, “Beauty Buyers Shift Online: Category Deep Dive,” June 29, 2016.
TRAILING CONVERSION RATES
Beauty Conversion Rate Index, by Product Category
US & UK, March 1–April 30, 2016
- - - - - Baseline (Indexed to 100)
112
108
89
85
51
Fragrances
Cosmetics
Hair Care
Source: HookLogic, “Beauty Buyers Shift Online: Category Deep Dive,” June 29, 2016.
Beauty Tools
Nail Care
WHY? CONVERSION ASSETS LACKING
Adoption of Content / Conversion Assets Across Beauty vs. Hair Sites
October 2015 (112 Beauty Brand Sites) & July 2016 (72 Hair Brand Sites)
Beauty 2015
Hair Care & Color 2016
59%
48%
44% 42%
35%
28%
26%
19%
23%
16%
9%
Multiple Images
Analysis by L2.
Product Videos
Tutorials Link to
PDP
Diagnostic Tool
Advanced Filters
13%
UGC
WHY? AOV VS. SHIP-TO-WEIGHT
Beauty Digital Shopping Cart Metrics, by Category
US & UK, March 1–April 30, 2016
$142.17
$115.33
$97.28
$65.76
$62.45
$34.74
Fragrances
Beauty
Tools
Cosmetics
Nail Care
Hair Care
Fragrances
AVG. CART VALUE
Source: HookLogic, “Beauty Buyers Shift Online: Category Deep Dive,” June 29, 2016
$20.74
$21.34
Beauty
Tools
Cosmetics
$12.33
$10.53
Nail Care
Hair Care
AVG. CART ITEM PRICE
AMAZON IS A GROWTH CHANNEL
Top 10 Brands Accounting for Top-50 Hair Care & Color Products, by Retailer
Sephora, Amazon and Ulta
July 2016
Analysis by L2.
“PRO” LINES ARE BLURRING
Self-Described as “Professional” / “Salon
Brand”
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
Link for Salon
Owners in
Primary Nav?
Owned
salon(s)?
Salon locator
on site
Distributing
Officially on
Amazon?
DISTRIBUTION = PRICE STABILIZATION
Amazon.com: Price of Oribe Gold Lust Conditioner
Before and After Oribe Began to Officially Distribute on Amazon Luxury Beauty (Dec. 2016)
---Wholesale Price of Product ---Price of Product Sold by Third-Party Merchant
BEFORE OFFICIAL
DISTRIBUTION
DISTRIBUTING ON
LUXURY BEAUTY
*See appendix for more granular data on Phyto and Oribe pricing
RETAILERS FOLLOWING SUIT
Ulta Removes Pro vs. Consumer Distinctions in Navigation
July 2013:
12 Links
January 2015:
33 links
July 2016 (Today):
36 links
?
…While expanding navigation options for
Treatment and Styling
NEW BUSINESS MODELS
Hair Care: US Google Monthly Search Volume
January 2008–July 2016
Search term ◼ blowout ◼ dry bar
2009
Drybar Launch
2010
2011
2012
2013
2014
2015
2016
BETTING ON OMNICHANNEL
Drybar Path to Growth
2008
Jan 2012
Straight-At-Home
At-home $40 Blowouts
$16M Private Equity
2013
Jun 2014
2016
$20M Private Equity Predicted
$10M Debt Financing
$100M in Sales
and new CEO, John Heffner
Formerly at OPI
Feb 2010
Mar 2013
Apr 2016
First Opening in Brentwood, CA
$250K Investment from brother
+ $50K personal savings
Launches Products
& Styling Tools
in Salons and Sephora
Ulta Launch
May
2013
July
2016
ULTA’S GROWTH DRIVER AS WELL
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)
Source: ULTA Beauty Q3 2015 Earnings Report, as reported by Beauty Store Business.
TV VIEWERSHIP IS DOWN…
Change in Viewership of Top 25 Cable Networks
2014–2015
-7% -7%
-9% -9% -8%
-12% -12%
-14%-14%
-15%-15%
-18%
-20%-19%-19%
-23%
-25% -25%
Source: Nielsen.
TOON
AMC
HGTV
-4%
DISC
-1%
2% 3%
E!
ADSM
FOOD
Disney
LIFE
ESPN
VH1
TBS
8% 9%
Spike
BRAVO
TNT
FAM
NAN
SYFY
FX
TLC
USA
Comedy
MTV
A&E
HIST
15%
BUT 2ND SCREEN EFFECTS PERSIST
Average TV Ad Spend per Channel, by Total Organic YouTube Views
Organic Views Divided by Quartile, Ad Spend for National Airings
April 1, 2015–March 31, 2016, n=200 Brands
$73,793,175
$52,239,509
$35,707,499
$16,551,899
<300K
Organic Views
n=49 brands
300K–1M
Organic Views
n=53 brands
1M–2.7M
Organic Views
n=47 brands
Source: L2 Intelligence Report: Video 2016, June 2016; L2 Analysis of Strike Social & iSpotTV Data.
>2.7M
Organic Views
n=48 brands
VIDEO CONTENT MODELS IN FLUX…
Beauty & Hair Care: Share of Snapchat Post Volume
By Brand, n=18 Brands, n=1.1K Post
June 28–July 17, 2016
Toni & Guy Hair
Meet Wardrobe
0%
2%
TIGI Bed Head
5%
AVERAGE DAY ACTIVE PER WEEK
Other
10%
DevaCurl
34%
3.9
DevaCurl
Schwarzkopf
Professional
3%
Schwarzkopf
4%
Shea Moisture
3.5
Matrix
Matrix
8%
Redken
10%
Shea
Moisture
19%
Living proof.
5%
3.2
Redken
2.5
Living proof.
2.5
EVEN SO…
HAIR UNDER INDEXES IN SOCIAL
Share of Posts & Interactions, by Category
US or Global Accounts, Q2 2016
n=279 Brands, n=8.3M Facebook, 307M Instagram and 92.6M YouTube Interactions
SHARE OF POSTS
Professional
Hair Care
15%
Consumer
Hair Care
13%
Fragrance
5%
Skincare
24%
Color
Cosmetics
43%
SHARE OF INTERACTIONS
Professional
Hair Care
1%
Consumer
Hair Care
4%
Fragrance
5%
Skincare
14%
Color
Cosmetics
76%
INFLUENCERS STILL THE UNLOCK
Google Search Volume & Select Instagram Posts
Search term ◼ ouai ◼ jen atkin
706K
@JenAtkinhair Instagram mentions from
Kim Kardashian and Kylie Jenner drive on avg 830K
interactions – amplification of 8.8X @theOuai’s total
community size
950K
758K
JAN ’16
APR ’16
JUL ’16
SIMILAR IMPACT ON INSTAGRAM
Guy Tang: Blockbuster Brand Partnerships
Guy Tang + Pravana Product
Partnership (Balayage Kit)
Incentivized to Tag Brand in
Personal Instagram Content
Colorist Content Posted on
Brand Channel
HAIR CARE & COLOR 2016
METHODOLOGY
METHODOLOGY
TECHNOLOGY: Response Time, Load Time
DIMENSION:
SITE &
ECOMMERCE
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
40%
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.
METHODOLOGY
DIMENSION:
DIGITAL
MARKETING
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
25%
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.
METHODOLOGY
DIMENSION:
SOCIAL
MEDIA
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 (12months), Content Sponsorship, Optimization of Most-Viewed Content
TWITTER: Reach, Engagement (12-months), Tweet Frequency,
Programming Tactics
15%
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
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
20%
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.
CATEGORIZING RESULTS
Brands are Parsed into Five Categories Based on Digital IQ Index® Score
GENIUS
140+
GIFTED
110–139
CHALLENGED
70–89
FEEBLE
<70
AVERAGE
90–109
HAIR CARE & COLOR 2016
RANKING
L2 DIGITAL IQ INDEX®:
RANK
BRAND
64
FEEBLE
Digital IQ
RANK
79
70
Helen of Troy
64
79
High Ridge Brands
70
69
L’Oréal Group
69
68
Dr. Miracle's LLC
65
71
62
72
56
Unilever Group
Henkel AG & Co KGaA
68
Digital IQ
Helen of Troy
77
67
BRAND
High Ridge Brands
Sanofi
66
CHALLENGED
L2 DIGITAL IQ INDEX®:
RANK
BRAND
52
AVERAGE
Digital IQ
RANK
90
57
Guthy-Renker
53
89
84
Miss Jessie's
88
61
83
KMS California
88
62
Unilever Group
81
Ales Group
87
Avlon Industries
85
60
Henkel AG & Co KGaA
57
87
59
Henkel AG & Co KGaA
54
Digital IQ
Pierre Fabre
88
54
BRAND
Shiseido Co Ltd
Pravana
54
CHALLENGED
63
80
High Ridge Brands
L2 DIGITAL IQ INDEX®:
RANK
BRAND
38
AVERAGE
Digital IQ
RANK
99
46
L'Oreal Group
41
97
46
96
49
91
Procter & Gamble
95
49
Shiseido Co Ltd
91
Vogue International
94
Pierre Fabre
92
It's A 10, Inc.
L'Oreal Group
45
92
46
Fekkai Brands LLC.
44
92
Unilever Group
96
42
Digital IQ
Revlon
Unilever Group
42
BRAND
49
91
L’Oreal Group
L2 DIGITAL IQ INDEX®:
RANK
BRAND
28
AVERAGE
Digital IQ
RANK
110
34
Johnson & Johnson Inc
29
109
102
Procter & Gamble
109
37
101
Unilever Group
108
38
Henkel AG & Co KGaA
99
The Estee Lauder Companies
107
Upjohn
104
36
L'Oreal Group
33
106
35
Procter & Gamble
32
Digital IQ
L'Oreal Group
109
29
BRAND
Combe
Johnson & Johnson Inc
29
GIFTED
38
99
Namaste Laboratories
L2 DIGITAL IQ INDEX®:
RANK
BRAND
15
GIFTED
Digital IQ
RANK
122
22
Unilever Group
17
120
22
117
25
113
Sundial Brands
117
26
Revlon
112
Procter & Gamble
116
Unilever Group
114
Living Proof
Procter & Gamble
21
115
24
Procter & Gamble
19
115
Procter & Gamble
120
19
Digital IQ
L'Oreal Group
John Paul Mitchell Systems
17
BRAND
27
111
L'Oreal Group
L2 DIGITAL IQ INDEX®:
RANK
BRAND
4
GIFTED
Digital IQ
RANK
134
10
L'Oreal Group
5
134
11
132
13
126
L'Oreal Group
130
14
The Estee Lauder Companies
123
Procter & Gamble
130
Kao Corporation
127
Unilever Group
The Estee Lauder Companies
8
127
11
Procter & Gamble
8
129
Moroccanoil
133
7
Digital IQ
Carol's Daughter
Unilever Group
6
BRAND
15
122
Deva Concepts, LLC.
L2 DIGITAL IQ INDEX®:
RANK
BRAND
3
DIGITAL IQ
140
L'Oreal Group
1
1
2
3
PARENT
IN THE COMPANY OF GENIUS
2
3
Advertising features influencers and connects to shoppable how-to content on site.
Embracing rapidly growing Snapchat with native ads in Snapchat Discover stories.
Banner ads and full page displays for product lines drive strong visibility on Walmart.com.
L2 DIGITAL IQ INDEX®:
RANK
BRAND
2
3
PARENT
Procter & Gamble
1
1
2
IN THE COMPANY OF GENIUS
DIGITAL IQ
149
2
The “Strong is Beautiful: Dad-Dos” campaign garnered 7.5 million views on YouTube.
Investments on Amazon, including participation in Amazon Prime and Amazon Fresh, help
drive visibility for category keywords.
Geo-targeted video ads offer coupons and direct viewers to the nearest Costco store.
3
L2 DIGITAL IQ INDEX®:
RANK
BRAND
1
L'Oreal Group
1
1
2
3
PARENT
IN THE COMPANY OF GENIUS
DIGITAL IQ
166
2
Strong product pages feature how-to content, UGC, and live chat
Incentivizes account sign up with personalized offers and samples
Top performance in mobile search with deep links for product pages and store locators
3
DISTRIBUTION: 2015
Hair Care & Color 2015: Digital IQ Distribution
Percentage of Brands Per Digital IQ Class, n=70
Genius
Gifted
Average
Challenged
Feeble
29%
24%
24%
19%
4%
Genius
Gifted
Average
Challenged
Feeble
DISTRIBUTION 2016
Hair Care & Color 2016: Digital IQ Distribution
Percentage of Brands Per Digital IQ Class, n=72
Genius
Gifted
Average
35%
Challenged
Feeble
33%
2016
21%
7%
4%
Genius
Gifted
Average
Challenged
Feeble
44
BIGGEST MOVERS
Biggest Winners & Losers
2015–2016 Digital IQ Percentile Rank
39%
36%
28%
24%
24%
ChallengedGifted
ChallengedGifted
FeebleAverage
AverageGifted
AverageGifted
-39%
-32%
-29%
-25%
-24%
ChallengedFeeble
GiftedAverage
GiftedAverage
GiftedGifted
ChallengedChallenged
ENTERPRISE VALUE
Hair Care & Color: Average Digital IQ Index® Score by Parent Company
July 2016
GENIUS
GIFTED
120
117
115
110
109
AVERAGE
91
88.5
CHALLENGED
74
FEEBLE
Estée
Lauder
(n = 3)
Avg. DIQ % Change
+1%
Proctor &
Gamble
(n = 10)
+6%
L'Oréal
( n = 13)
0%
Source: L2 Inc., Digital IQ Index®: Hair Care & Color 2016.
Unilever
(n = 8)
-1%
Johnson &
Johnson
(n = 3)
Shiseido
(n = 2)
-16%
-3%
Henkel
( n = 4)
+5%
High Ridge
(n = 3)
-6%
46
HAIR CARE & COLOR 2016
KEY FINDINGS
FAILING TO CLOSE THE LOOP
Percentage of Sites That Employ Guided Selling Feature
October 2015 (112 Beauty Brand Sites) & July 2016 (72 Hair Brand Sites)
Beauty 2015
Hair Care & Color 2016
29% of Hair Care Tutorials do not link
to PDPs – vs. 11% of Beauty Tutorials
79%
71%
55%
44% 42%
23%
35%
26%
23%
9%
Tutorials
Guided Selling in
Primary Navigation
HAIR OVER-INDEXING
Analysis by L2. *Rescored Hair Care in Q1 2016.
Tutorials Link to PDP
Diagnostic Tool
BEAUTY OVER-INDEXING
Advanced Filter*
WINNERS DIALING UP CONTENT
BEFORE: JULY 2015
AFTER: AUGUST 2016
New expanded navigation bar
includes portal for professionals
Video tutorials with
featured products sit in a
new inspiration section
ONE-CLICK DIAGNOSTIC
1. Highly visual one-click “diagnostic”
2. Product integrated/shoppable
4. Video tutorials by curl type – linked from primary
navigation
3. Integrated UGC
5. Videos tagged with shoppable product call-outs
6. Promoting sampling set to drive trial
CUSTOMER SERVICE STAGNATES
Hair Care & Color; Brand Site Investments
Percentage of Brands with Given Customer Service Implementations
2015–2016, n=68 Brands Present Across Studies
55%
2015
2016
53%
35%
Brands pulling back
investments in Live Chat
35%
14%
Store Locator
Any Directions
Source: Hair Care & Color Digital IQ 2016, L2 Inc.
14%
Directions without
Leaving Site
11%
7%
Live Chat
9%
4%
Auto Detects
Location
REDKEN REFRESH: PRO & CONSUMER
REDKEN.COM
REDKENSALON.COM
Features updated pro
education portal and
business tools
New best-in-class
salon finder with
directions on site
PRO HAIR CHANNELS PROLIFERATE
Hair Care: Distribution Channels, by Category
June 2016, n=43 Consumer Brands, n=29 Professional Brands
Consumer
Professional
86%
70%
62%
42%
12%
7%
Amazon
38%
37%
Sleek Hair
Ulta
J.C. Penney
9%
14%
Sephora
HENKEL WINNING ON ULTA
Hair Care: Visibility and Page Rank, on Ulta
June 2016, n=42 Brands, n=981 Results for 59 Category Keywords
Average Page Rank
Henkel
Kao Corp.
L'Oréal Group
Procter & Gamble
Unilever
Avg. Reviews for Top 5 Products
1
CAROL’S DAUGHTER
PHYTO
NOT YOUR MOTHER’S
CHI
BATISTE
AG HAIR
3
LORÉAL PARIS
5
CLAIROL
REDKEN
NIOXIN
OGX
JOHN FRIEDA
SHEA
MOISTURE
BIG SEXY HAIR
PUREOLOGY
ALTERNA
REDKEN SALONS
ABBA
7
0%
1%
2%
3%
4%
5%
6%
7%
8%
Percent of Total Results
ALTERNA OWNING BEST SELLERS
Consistently
featured in
category
best-sellers
carousels
…and owns 39% of
top results for trending
“natural hair
products”
AMAZON FUELING INDIE BRANDS
Hair Care: Visibility and Page Rank, on Amazon
n=51 Brands, n=1,075 Results for 59 Category Keywords
AVERAGE PAGE RANK
June 2016
1
3
5
7
9
11
13
15
17
19
Avg. Reviews for Top 5 Products
PURA D’OR
ARTIC FOX
MANIC PANIC
FEKKAI
ARTNATURALS
TRESÈMME
CLAIROL
REVLON
NIOXIN
MAJESTIC PURE
GARNIER
JOHN FRIEDA
L’ORÉAL PARIS
BIG SEXY HAIR
MOROCCANOIL
REDKEN
MATRIX
0%
1%
2%
3%
4%
5%
6%
PERCENT OF TOTAL RESULTS
& DOUBLING DOWN ON THE CATEGORY
Google Organic and Paid Search Visibility: Hair
Percentage of Non-branded Search Queries for Which Site Appears
PAID VISIBILITY
June 2016, n=2,824 Keywords
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Conditions
Multicultural
Styling
Treatment
L’ORÉAL PARIS
AMAZON
GARNIER
AMAZON
AMAZON
AMAZON
L’ORÉAL PARIS
L’ORÉAL PARIS
SEPHORA
SEPHORA
WALMART ULTA
0%
Source: L2
Color
10%
20%
30%
YOUTUBE
SALLY BEAUTY
ULTA
YOUTUBE
40%
50%
PINTEREST
YOUTUBE
60%
70%
80%
ORGANIC VISIBILITY
WINNERS & LOSERS: STYLE / CARE
Beauty: Category Search
Change in Visibility, Q1 2016 vs. Q2 2016, n=263 Keywords
WINNERS
LOSERS
HAIR CARE
HAIR CARE
ORGANIC
BRAND
PAID
Δ
BRAND
ORGANIC
Δ
BRAND
PAID
Δ
BRAND
Δ
+10%
+29%
-6%
-21%
+5%
+20%
-5%
-16%
+4%
+15%
-4%
-13%
+3%
+8%
-3%
-6%
+3%
+8%
-2%
-6%
AMAZON’S BLIND SPOT?
Hair Care: US Google Monthly Search Volume
January 2004–July 2016
Search term ◼ cowash ◼ co wash
JULY 2016
2005
2007
2009
2011
2013
2015
VS. FAST FOLLOWERS
DISRUPTORS EMERGING
Google Organic and Paid Search Visibility: Hair
Percentage of Non-branded Search Queries for Which Brand Appears
PAID VISIBILITY
June 2016, n=2,824 Keywords
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Conditions
Multicultural
Styling
Treatment
L’ORÉAL PARIS
GARNIER
SOFTSHEEN-CARSON
L’ORÉAL PARIS
L’ORÉAL PARIS
GARNIER
GARNIER
L’ORÉAL PARIS
CLAIROL PRO
REDKEN
MADISON-REED
WELLA
HEAD & SHOULDERS
MATRIX
MATRIX
AVEDA
CLAIROL
SCHWARZKOPF
0%
Source: L2
Color
2%
4%
6%
8%
10%
12%
14%
MATRIX
16%
18%
20%
ORGANIC VISIBILITY
THERE’S AN APP FOR THAT
Innovation and Customization Drive Organic Visibility
DIVERSE & AUTHENTIC INSTAGRAM
DIAGNOSTIC TOOLS ON SITE
TOP-RATED MOBILE APP
EMAIL SEGMENTATION EFFORTS VARY
Professional: Segmentation of Email vs. Read Rate
Q2 2016, n=12 Brands
Max List Size
MATRIX
30%
OUAI
25%
SHU UEMURA
BUMBLE &
BUMBLE
20%
KÉRASTASE
DOVE
GARNIER
PRO FEKKAI
CONSUMER
DR. MIRACLE’S
L’ORÉAL
PROFESSIONNEL
LIVING
PROOF
MIZANI
100%
PAUL
MITCHELL
90%
80%
70%
PRAVANA
60%
CAROL’S
DAUGHTER
10%
MULTICULTURAL
NEUTROGENA
PUREOLOGY
15%
50%
DEVACURL
40%
MISS
JESSIE’S
5%
TRESEMME
REDKEN
30%
0%
20%
AVERAGE EMAIL SEGMENT (PERCENTAGE OF TOTAL LIST SIZE)
10%
0%
READ RATE
35%
WINNERS FOCUS ON DATA CAPTURE
Implementing a Segmentation Strategy
What services are you interested in?
(Please check all that apply)
Haircuts
Perms and relaxers
Styling
KeraTriplex© Treatment
Hair color
Blow-out
Men’s Services
Wash House™
CUSTOMIZATION REQUEST
HOW WOULD YOU DESCRIBE
YOUR HAIR COLOR?
SEGMENTATION STRATEGY
MOVE TOWARDS TARGETING
FOCUS ON REPLENISHMENT
/ TRAVEL SIZES
TRIGGERED EMAIL
/ DISCOUNT
TRIAL-ORIENTED
SAMPLING
DRIVING TRIAL ACROSS CHANNELS
Q2 Advertising Push: Sampling and Curls
SAMPLING PUSH
CURL-ORIENTED CONTENT / SAMPLING
SAMPLING LANDING PAGE
Bumble & bumble owned 99% of competitive
impressions in Q2 through ads purchased 100%
via indirect (programmatic/ad network) channels
BRANDS ADAPTING TO PAY-TO-PLAY
Hair Care & Color: Facebook Engagement by Quarter
July 2015–2016, n=41 Facebook Pages with Complete Data
Likes
Comments
Shares
Q4 2015
1.6M
Q3 2015
1.2M
Q1 2016
1.8M
633K
619K
530K
392K 382K
Posts per Week
439K 446K
Q2 2016
2.0M
Q3 2016
To Date
20.0
895K
15.0
616K
579K 585K
484K
490K
Index
Average:
6.6 Posts
5.0
per Week
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
Source: L2 Inc., Digital IQ Index®: Hair Care & Color 2016.
10.0
66
0.0
Beiersdorf
Coty
ELC
Fashion
Indie
J&J
L’Oréal Group
LVMH
P&G
Shiseido Co.
INDIE PRO BRANDS ACCELERATE
Share of Total Facebook Interactions by Brand
Professional Hair Brands
Q1–Q2 2016
Q1: SHARE OF INTERACTIONS
Moroccanoil
3%
Other
Zotos
23%
0.03%
Olaplex
JOICO
31%
2%
Other P&G
6%
Nioxin
2%
American
Aveda
Pravana
Crew
14%
6%
2%
Matrix
Other
Paul
2%
L'Oreal
Mitchell
Bumble
and
Redken
Group
3%
Bumble
3%
1%
1%
Kerastase
2%
Q2: SHARE OF INTERACTIONS
JOICO Zotos
1%
Other P&G 2%
2%
Olaplex
9%
Other
10%
Sebastian
Professional
3%
Nioxin
4%
American
Crew
12%
Other
L'Oreal
Group
2%
Moroccanoil
11%
Matrix
2%
Redken
5% Kerastase
5%
Pravana
8%
Paul
Mitchell
6%
Aveda
17%
Bumble and
Bumble
2%
Unilever
PRODUCT-CENTRIC HERO STRATEGY
Moroccanoil Facebook Interactions per Post
January 1–July 25, 2016
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
4/1/16
Interactions
4,276
5/1/16
Interactions
4,283
6/1/16
Interactions
5,873
7/1/16
Vogue Int’l
Coty
ELC
Henkel
Indie
J&J
L’Oréal Group
Revlon
P&G
Shiseido Co.
Unilever
PROS & COLORISTS DRIVING EMV
Share of Total Instagram Posts and Interactions by Brand
Hair Care & Color Brands n = 66
Q2 2016
Q2: SHARE OF POSTS
Olaplex
3%
Other
46%
Drybar
SheaMoisture Pravana
0%3%
2%
Ouai
0%
DevaCurl
4%
2% Living
Proof
2%
Moroccanoil
2%
Oribe
2%
Miss
L'Oréal 0% Jessie's
Paris
7%
9%
Carol's
Daughter
Redken
4%
Aveda
2%
2%
Bumble &
Matrix
Bumble
3%
Revlon Garnier
4%
2%
2%
Q2: SHARE OF INTERACTIONS
Other
16%
Aveda
2%
Bumble &
Bumble
3%
Revlon
7%
Garnier
1%
Matrix
1%
Redken
2% Carol's
Daughter
8%
Olaplex
22%
Drybar
5%
SheaMoisture
4%
Ouai
3%
L'Oréal
Paris
16%
Miss
Jessie's
1%
0%
Pravana
3%
DevaCurl
Moroccanoi 2%
l
1%
Living
Oribe
Proof
1%
1%
PRO-ORIENTED CONTENT
Olaplex: Top Engaged Instagram Posts Q2 2016
2.2%
2.1%
2.1%
Top-engaged Olaplex content feature UGC by stylists, featuring no-frills treatments
/ transformations, with Pro-oriented descriptions specifying detailed coloring processes
VIRAL VIDEO MYTH
Hair Care & Color: Reach, Post Frequency & Engagement
June 2015–June 2016, n=64 Brands with Complete Data
% VIEWS VIA ORGANIC
LACKING SUPPORT
100%
ORGANIC HIT
KMS CALIFORNIA
PRAVANA,
JOICO,
TONI & GUY,
BIG SEXY HAIR,
ORGANIC ROOT STIMULATOR
80%
60%
LIMITED ROI
PAYING TO PLAY
40%
REVLON
AVEENO
20%
L’ORÉAL
PARIS
DOVE
AUSSIE
PANTENE
HEAD &
SHOULDERS
GARNIER
0%
(5,000,000)
-
5,000,000
Source: L2 Analysis of Strike Social Data.
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
TOTAL VIEWS
LONGTAIL OF ORGANIC ASSETS
Pantene: “Strong Is Beautiful: Dad-Do” Campaign
January 2016
30-SECOND TV SPOT
ADDITIONAL ORGANIC ASSETS
876K Views (51% Organic)
531K Views (51% Organic)
597K Views (52% Organic)
381K Views (57% Organic)
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
VLOGGERS OWN YOUTUBE SEARCH
Top Channels by Average Daily First Page Search Ownership
May 25, 2016–June 7, 2016
n=48,236 First Page Video Search Results, n=50 Hair Care & Color Keywords
n Influencer Channel
4.8%
Cute Girls Hairstyles
1.6%
1.6%
Guy Tang
Nicole Skyes
MakeupWearables Hairstyles
Bebexo
BuzzFeedVideo
AlexandrasGirlyTalk
Luxy Hair
Sayria Jade
Blonde
Source: L2 Intelligence Report: Video 2016, June 2016.
1.0%
0.9%
0.9%
0.9%
0.8%
0.8%
0.7%
PARTNERSHIPS IN PLAY
Guy Tang: Blockbuster Brand Partnerships
1.3M Subscribers
75.0M Channel Views
SHIFT TOWARD MOBILE
Hair Care & Color: Mobile vs. Desktop Search Volume
2014–2016, n=1,000 Category Keywords
◼ Mobile ◼ Desktop ◼ Tablet
Tablet
7%
Tablet
8%
Tablet
9%
Desktop
32%
Smartphone
59%
2014
Desktop
22%
Desktop
26%
Smartphone
66%
Smartphone
71%
2015
2016
OPTIMIZING FOR MOBILE
Customizing the Consumer’s Path-to-Purchase
2-CLICK COMPARISON
CONSUMER EDUCATION
3RD PARTY ECOMMERCE
HAIR CARE & COLOR 2016
CONCLUSIONS
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: 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.