Today, L2 released its 2014 Digital IQ Index: Hair Care & Color, which assesses the digital performance of 61 consumer and professional brands in the U.S. Compared to previous years, the study finds brands can no longer rely on a mix of celebrity endorsements and large ad budgets for print and TV. Margins are under pressure, and managers are looking to lock in direct sales by connecting with consumers towards the end of the purchase funnel.
Investment in digital has increased, but remains underwhelming. 57% of brands in the study purchase brand search terms, as prices for many category terms have multiplied by two or three. Email marketing has increased with the average frequency increasing by 0.3 emails per week, but lags behind other Beauty categories.
A 10% decline in salon sales has forced professional brands to up their digital game. 36% of professional brands in the L2 Index have partnered with Loxa Beauty, Sally Beauty Holdings’ newly acquired direct-to-consumer solution for professional Hair Care supplies. However, channel conflict and concerns about the grey market have held the higher end brands back from their full potential. For consumer Hair Care & Color products, the challenges are limited brand loyalty, squeezed margins, and high ship-to-weigh ratios.
Brands are navigating some of those barriers by investing in desktop and mobile sites, and direct-to-consumer e-commerce. More than 10% have updated their brand site this year, mostly with live chat, user reviews and better e-commerce hand-offs. More than half designed a custom mobile site.
For more how Hair Care & Color brands are faring digitally, download the report excerpt.