L2′s first Digital IQ Index®: Hair Care & Color benchmarks the digital competence of 53 Hair Care & Color brands based on more than 675 data points across four dimensions: Site, Digital Marketing, Social Media, and Mobile.

1. Excerpt from the Digital IQ Index : Hair Care & Color
®
To access the full report, contact membership@L2ThinkTank.com
Hair Care
& Color
February 28, 2013
SCOTT GALLOWAY
NYU Stern
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2. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color ®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Arms Race
Watch the
Hair Care & Color Video
Click to Play
The consumer Hair Care & Color industry is a fair-haired child of broadcast media. For decades, deep-pocketed
multibrand enterprises have followed the same formula: celebrity spokespeople, television, and print ads to
support a plethora of product launches. The result is a media arms race that erodes margins and has created a
sea of (relatively) undifferentiated brands.
W hile nearly every major consumer category
reduced print spend from Q1 2011 to Q1 2012,
Personal Care (including Hair Care & Color) was
up 7.1 percent (Apparel & Accessories was the only other
category to increase spend).1 Similarly, television spend across
generating product content geared toward professionals—all
of which have had mixed success. Product diversion has
also intensified in recent years. A court case in 2010 revealed
that approximately 20 percent of salon category sales have
been diverted through non-authorized channels. Leading
Personal Care was up 8.8 percent in Q3 from a year ago. 2
this charge are online retailers Amazon and Drugstore.com,
With sales across the industry effectively flat, this arms race which have purchased search terms against 74 percent of
is unsustainable. At present, 25 percent of consumer media professional Hair Care & Color brands, despite not being
consumption is spent across digital channels, yet just three authorized distributors.
percent of Hair Care & Color media dollars are allocated to
Sales by Category Paid Media Spend vs. Media Consumption
internet display ads. Hair Care & Color (Percent Growth) Hair Care & Color
2006–2011 U.S., 2012
Investing in Problems, Not Opportunities Percent of Paid Media Spend Percent of Time Spent
5.6%
The professional side of the business faces even more 4.8%
0.8% 0.2% 52%
challenges constrained by a distribution channel that is in
45%
structural decline. From 2006 to 2011, salon Hair Care sales Two-in-One
Conditioners Colorants
Styling
Shampoos Salon Hair Care 40%
Products Agents
declined 15.8 percent as consumers traded down to mass
alternatives. Despite the fall, brands have continued to divert -2.2% 25%
resources away from more effective and lucrative opportunities
and just six professional brands sell direct to consumer. Digital
5%
investment instead has centered on shoring up declining 3%
-15.8%
channels, building portals, updating educational tools and Television Print Internet Display
1. Publishers Information Bureau with Kantar Media as cited by MPA, April 4, 2012. Source: “Hair Care in the US,” Euromonitor International, June 2012. Source: Kantar Media, 2012; “Average Time Spent per Day with Major
2. TVB.org with Kantar Media. Media by US Adults,” eMarketer, October 2012.
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3. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Internet Retailing, as a Percent of Total Sales
Personal Care, by Category, 2011
Sets / Kits Skin Care Fragrance Bath /Shower Color Cosmetics Depilators Sun Care Baby Men’s Oral Care Hair Deodorants
17% 12.1 6.3% 5.1% 5.0% 3.4% 3.0% 2.6% 1.9% 1.6% 0.9% 0.3%
Source: “Hair Care in the US,” Euromonitor International, June 2012.
Disrupters and the Suicide Pact The Opportunity
The common thread among success stories in Hair Care & This study attempts to quantify the digital competence
Color is a refusal to remain part of a suicide pact—relying on of 53 global Hair Care & Color brands. Our aim is to
media and channels in structural decline. Specifically: provide a robust tool to diagnose digital strengths and
weaknesses and help brands achieve greater return
• Estée Lauder brands Aveda and Bumble and bumble
on incremental investment. Like the medium we are
challenge traditional distribution, and buttress strong salon
assessing, our methodology is dynamic and we hope
legacies, by expanding into Sephora and department
you will reach out to us with comments that improve our
stores. Both also maintain robust direct-to-consumer
methodology, investigation, and findings. You can reach
e-commerce businesses.
me at scott@stern.nyu.edu.
• Cross-category consumer players, including L’Oréal Paris
and Garnier, recognize the shifting tides of influence and
have invested in robust online retail partner integration and
tapped into influential vlogger channels. Scott Galloway
Professor of Marketing, NYU Stern
• Guthy-Renker has extended its replenishment model to Founder, L2
its Hair Care brand WEN, coupling direct response and
e-commerce.
• High-growth consumer brand Organix does not invest in
TV, reallocating resources/efforts to print, speed to market
abilities, and product innovation.
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4. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
About the Ranking
The Methodology
35%
40% 25%
30% 20%
20% 20% Media
10%
Site Digital Marketing
Digital Marketing Mobile
Mobile Social Media
Social
Effectiveness of Brand Site 75% Search, Display, and Email Marketing Efforts
Search, Display, and Email Marketing Efforts Compatibility, Optimization, and
Compatibility, Optimization, and BrandBrand Presence, Community Size,
Presence, Community Size,
Site Technology Content 88%
Functionality & and Tablet Experience Search:
Search: Marketing on on Smartphones, and Tablets
Marketing Smartphones and Tablets Content, and Engagement
Content, and Engagement
Site Search Navigation & Product / Site Search,
Technology, and Navigation Traffic, SEM, SEO, Web Authority
Traffic, SEM, SEO, Web Authority Mobile Site:
Mobile Site: Facebook:
Facebook:
Reservations
Customer Service & Store/Salon Locator, Product Compatibility, Functionality, Transaction
Compatibility, Functionality, Transaction Likes, Likes, Growth,& Applications,
Growth, Tabs Tabs & Applications,
Advertising and Innovation:
Advertising and Innovation:
Property Pages and Destination Guides
Page, E-Commerce & Transaction Orientation, Capability
Capability Responsiveness, Interaction Rate Rate
Responsiveness, Interaction
Display, Retargeting, Cross-Platform Initiatives
Display, Retargeting, Cross-Platform Initiatives
Customer Service
Account & Personalization, EU5 Footprint iOS Applications (both iPhone & iPad):
iOS Applications (both iPhone & iPad): Twitter:
Twitter:
Account Functionality and Loyalty Programs Blog && Other User-Generated Content:
Blog Other User-Generated Content:
Professional Resources (professional brands only) Availability, Popularity, Functionality
Availability, Popularity, Functionality Followers, Growth, Frequency,
Followers, Growth, Frequency,
Mentions, Sentiment
Mentions, Sentiment
Brand Translation 25%
Brand Translation 12% OnlineOnline Voice
Voice
Innovation:
Android:
Aesthetics Email:
Email:
Aesthetics, Messaging & Visuals Geolocal, Recent Brand Initiatives
Availability, Popularity, Functionality YouTube:
YouTube:
Messaging and Visuals Frequency, Content, Innovation Segmentation
Frequency, Content, Innovation,
(provided by Code and Theory) Search Visibility, Views, Number
Search Visibility, Views, Number
(Provided by SapientNitro) and Trigger Emails Innovation:
of Uploads, Subscriber Growth,
of Uploads, Subscriber Growth,
Geolocal, Recent Brand Initiatives
Viral Videos
Viral Videos
Emerging Social Media:
TripAdvisor:
Instagram,and Social Pinterest, Tumblr
Site Google+, Media Integration,
Brand Responsiveness, Number
of Reviews
Emerging Social Media:
Instagram, Google+, Pinterest, Tumblr
Digital IQ Classes
Genius 140+ Gifted 110–139 Average 90–109 Challenged 70–89 Feeble < 70
Digital competence is a point of Brands are experimenting and innovating Digital presence is functional Limited or inconsistent adoption of Investment does not
competitive differentiation for these brands. across site, mobile, and social platforms. yet predictable. Efforts are mobile and social media platforms. match opportunity.
Creatively engineered messaging reaches Digital presence is consistent with brand often siloed across platforms. Sites lack inspiration and utility.
consumers a a variety devices and in
travelers onon variety of of devices and image and larger marketing efforts.
many online environments.
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5. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Digital IQ Ranking
Genius, Gifted
GENIUS
RANK BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ L’Oréal Paris
Aveda
Redken
Genius Gifted GIFTED
1 Dove
4 136 11 122 Kérastase
Garnier
L’Oréal Professionnel
Unilever Procter & Gamble Pantene
Bumble and bumble
Matrix
171 Nice ‘n Easy
Wella
4 136 12 119
Head & Shoulders
AXE
Herbal Essences
L’Oréal Procter & Gamble John Frieda
Neutrogena
Revlon
L’Oréal TRESemmé
AVERAGE
6 135 13 116 Schwarzkopf
WEN
2 L’Oréal Unilever
American Crew
Carol’s Daughter
Paul Mitchell
Moroccanoil
Ojon
Shu Uemura Art of Hair
151 7 130 14 114 Sebastian Professional
Aussie
Pureology
L’Oréal Procter & Gamble CHALLENGED
Joico
Nioxin
Suave
Clairol Professional
Estée Lauder Companies 8 128 14 114 Aveeno
SoftSheen-Carson
Living proof.
Procter & Gamble Procter & Gamble Alberto VO5
Fekkai
Mizani
3 Catwalk by TIGI
Nexxus
9 126 16 112 Pravana
FEEBLE
Rogaine
145 The Estée Lauder Companies Kao Corp Just for Men
TIGI Bed Head
got2b
Infusium 23
Organix
9 126 16 112 Pert Plus
Finesse
Selsun Blue
L’Oréal L’Oréal Johnson & Johnson L.A. Looks
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6. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Digital IQ Ranking
Gifted, Average, Challenged
GENIUS
Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ L’Oréal Paris
Aveda
Redken
Gifted GIFTED
Dove
16 112 25 100 31 87 Kérastase
Garnier
L’Oréal Professionnel
Revlon Moroccanoil Procter & Gamble Pantene
Bumble and bumble
Matrix
Nice ‘n Easy
Wella
19 111 26 97 33 85
Head & Shoulders
AXE
Herbal Essences
Unilever The Estée Lauder Companies Unilever John Frieda
Neutrogena
Revlon
Average TRESemmé
AVERAGE
20 109 27 96 34 84 Schwarzkopf
WEN
American Crew
Henkel L’Oréal Procter & Gamble Carol’s Daughter
Paul Mitchell
Moroccanoil
Ojon
Shu Uemura Art of Hair
21 108 28 94 35 82 Sebastian Professional
Aussie
Pureology
Guthy-Renker Procter & Gamble Johnson & Johnson CHALLENGED
Joico
Nioxin
Suave
Clairol Professional
22 107 29 93 36 81 Aveeno
SoftSheen-Carson
Living proof.
The Colomer Group Procter & Gamble L’Oréal Alberto VO5
Fekkai
Mizani
Catwalk by TIGI
Nexxus
22 107 30 92 37 80 Pravana
FEEBLE
Rogaine
Carol’s Daughter L’Oréal Living Proof Just for Men
TIGI Bed Head
got2b
Challenged Infusium 23
Organix
24 105 31 87 38 79 Pert Plus
Finesse
Selsun Blue
John Paul Mitchell Systems Shiseido * Unilever/High Ridge Brands L.A. Looks
* Ownership by High Ridge Brands in the U.S. and Puerto Rico; ownership by Unilever outside the U.S. and the Puerto Rico
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7. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Digital IQ Ranking
Challenged, Feeble
GENIUS
Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ L’Oréal Paris
Aveda
Redken
Challenged GIFTED
Dove
39 77 46 64 53 16 Kérastase
Garnier
L’Oréal Professionnel
Procter & Gamble Unilever Golden Sun Pantene
Bumble and bumble
Matrix
Nice ‘n Easy
Wella
40 76 47 58
Head & Shoulders
AXE
Herbal Essences
L’Oréal Henkel John Frieda
Neutrogena
Revlon
TRESemmé
AVERAGE
41 75 48 48 Schwarzkopf
WEN
American Crew
Unilever Helen of Troy Carol’s Daughter
Paul Mitchell
Moroccanoil
Ojon
Shu Uemura Art of Hair
42 74 49 46 Sebastian Professional
Aussie
Pureology
Unilever Vogue International CHALLENGED
Joico
Nioxin
Suave
Clairol Professional
42 74 50 38 Aveeno
SoftSheen-Carson
Living proof.
Pravana Helen of Troy Alberto VO5
Fekkai
Mizani
Feeble Catwalk by TIGI
Nexxus
44 67 51 37 Pravana
FEEBLE
Rogaine
Johnson & Johnson Lornamead Just for Men
TIGI Bed Head
got2b
Infusium 23
Organix
45 65 52 ® 35 Pert Plus
Finesse
Selsun Blue
Combe Sanofi L.A. Looks
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8. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color ®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Key Findings Site
Content and Commerce
More than half of the brands in the Index provide
instructional content on their sites, including text, videos, or
interactive tools, such as a diagnostic quizzes. A majority Instructional Content: Consumer Brands
of consumer brands feature interactive tools (57 percent), January 2013, n=30
while professional brands favor both text and video content. Presence on Site Link to Product Page Buy Online Button
However, this content is often poorly integrated with the
purchase experience.
60% 50% 57%
Of brands with interactive tools, just 16 percent save 33% 33% 40%
7% 0% 23%
product recommendations to the user’s account for future
reference. Fifty-two percent prompt the user to print
results, and no more than a third encourage sharing via
social media or email.
Instructional Text Instructional Video Interactive Tool
Instructional Content: Professional Brands
January 2013, n=23
Presence on Site Link to Product Page Commerce (Buy Online/Salon Locator)
61% 57% 35%
48% 26% 22%
43% 9% 22%
Visitors who view how-to content in
Bumble and bumble’s lookbook can
add related products directly to the
shopping cart.
Instructional Text Instructional Video Interactive Tool
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9. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Key Findings Site
You’ve Got Mail
Health and beauty consumers consult brand emails to
research products more than any other source, except
Consumer-Facing Account Data Capture
websites.3 Sixty-three percent of consumer brands provide
Consumer and Professional Brands
newsletter signup, either directly (27 percent) and/or in tandem January 2013, n=23
with the account (37 percent). Consumer brands Carol’s
Daughter and Ojon notably streamline the process to occur on
39%
the homepage, rather than via a link. 22%
Professional brands segment between consumers and 17%
salon professionals by offering distinct accounts for each
(26 and 78 percent of brands, respectively). Advanced data 4%
capture is not common; less than a quarter of professional
accounts capture salon location or product usage patterns.
For the 23 consumer-facing accounts, just 39 percent
Hair Type Product Usage Country Selection Language Selection
capture hair characteristics and 22 percent collect product
usage details.
Abandoned-cart emails generate higher conversion rates
(21 percent) than loyalty and bulk email combined.4 WEN,
Ojon, and Aveda stand out for their timely abandoned cart
emails, and all three receive an above-average proportion Professional-Facing Account Data Capture
of site traffic from email, though none surpass Carol’s January 2013, n=18
Daughter’s 25 percent. 83%
44%
22%
17%
6% 6%
WEN sends a trio of
Professional Country Salon Product License Salon Size
abandoned cart emails to
recapture lost sales.
Position Selection Location Usage Number
3. “Summer 2012 Online Shopper Intelligence Survey,” Compete, August 16, 2012.
4. “Shopping Cart Abandonment Emails Generate $17.90 per Email,” SeeWhy, June 22, 2011.
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10. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Key Findings Mobile
Mobile
Consumer Brands Mobile Site & HTML5 Adoption Mobile Application Adoption Rates
While more than a fifth of global monthly searches for brands Consumer Brands Consumer Brands
January 2013, n=30 January 2013, n=30
in the Index occur via a mobile device, only 47 percent of
consumer brands have invested in mobile-optimized sites. 47% 23%
Furthermore, 20 percent of these brands fail to redirect users Mobile Optimized
to the mobile-optimized version.
Ojon, Neutrogena, and WEN have implemented m-commerce.
Most consumer brands face the challenge of integration with
online retailers and only five (Aussie, Dove, Garnier, Nice ‘n Easy,
17%
and L’Oréal Paris) have optimized the process for mobile.
43% 13%
The dollar value of mobile’s influence on in-store sales will Not Mobile Optimized
dwarf that of m-commerce.5 Consumers who read product
reviews on their mobile devices view 21 percent more pages
7% 3%
per visit.6 Catering to this trend, 80 percent of mobile sites HTML5 Partial
provide user ratings and reviews, though just 33 percent
include an option to filter or sort.
Less than a quarter of consumer brands have released
apps for iPhone, iPad, or Android. Apps generally feature
one-off diagnostic tools and product recommendations.
Aveda’s are the only consumer-facing apps to integrate with iPhone iPad Android
the user’s desktop account.
iOS Functionality: Consumer-Facing Apps
Percentage of Consumer and Professional
Brand Apps with the Following Features
January 2013, n=17
41%
29% 29% 29% 18%
123
How-To Content Diagnostic Quiz Salon / Store Locator Product Catalog Virtual Makeover
5. “The dawn of mobile influence: Discovering the value of mobile in retail,” Deloitte Digital, July
2012.
6. “User reviews play critical role in getting mobile commerce to scale,” Lauren Johnson,
February 14, 2013,
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11. Digital IQ Index®:
Excerpt from the Digital IQ Index : Hair Care & Color
®
February 28, 2013
To access the full report, contact membership@L2ThinkTank.com
Hair Care & Color For Membership Inquiries Contact Info@L2ThinkTank.com
Key Findings Social Media
Facebook continued
With more than 20 million fans across its 45 international
pages, AXE tops the Facebook fan race. AXE also registers the
largest individual page, followed by three other multicategory Top 5: Facebook Brands
brands (L’Oréal Paris, Garnier, and Neutrogena). Accordingly, Consumer Brands: Number of “Likes” by
the Unilever brand receives more traffic from social properties Aggregate Global Community Size
than any other brand, at 21 percent. January 2013
Dove and Shu Uemura Art of Hair have adopted
Facebook Global Pages, enabling easier page management
while still delivering locally relevant content.
20,270,841 likes 15,126,474 likes 12,528,651 likes 6,965,946 likes 6,591,634 likes
AX E L’Oréal Paris Dove Pantene Garnier
Key
Europe
North America
Asia
South America Top 5: Facebook Brands
Africa/MENA
Professional Brands: Number of “Likes” by
Global
Aggregate Global Community Size
January 2013
Total “Likes”
1,276,479 likes 1,207,353 likes 799,256 likes 718,224 likes 664,870 likes
Wella L’Oréal Professional Kérastase Aveda Schwarzkopf
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