Download The explosive growth in sales of professional nail care

External analysis
Economic
Rand has beens trengthning against dollar – cheaper to buy US products
owever, despite such adverse conditions, beauty and personal care increased in current value
by 10% in 2012, one percentage point slower than the growth recorded in 2011. This was
mainly due to aggressive competition and heavy price promotion across various categories.
- euromonitor
Africa’s consumer-facing industries are expected to grow by more than US$400
billion by 2020, according to a recent McKinsey report.
Economies of scale; demand driven by preferences and population growth
The explosive growth in sales of professional nail care products outshined
resilient but modest growth rates in other cosmetics categories, posting
over 25% increase globally in 2012, according
to Kline’s exclusive Professional Nail Care: Global Market Brief.
AFFORDABLE LUXURY
USA average income for nail technician $420.98 Per Week
The nail industry has had “price stagnation” in various service areas for decades.
The price of a full set of acrylics – little adjustment for inflation
has barely changed in 20 years.
The Nail Polish Index: Economy watchers used to say that when times got tough,
women would buy a lipstick, because it was an affordable pick-me-up. Now the
economic barometer is measured by nail polish. When times are tough, women
buy a bottle of nail polish. And when times are good, they buy lots of polish and
go to the salon.

The nail care category and its growth could be on the verge of a tipping point, particularly
given the probability of long-term economic sluggishness in developed markets and the
untapped opportunities presented by emerging markets.

Latin America and emerging Asia continued to prop up the global beauty industry in
2011, driving collectively more than 60% of worldwide incremental retail revenue,
according to data from Euromonitor International. However, developed markets also
played their part, notably the U.S., which posted its best beauty performance in more
than five years on the back of strong sales of premium brands.
Nail polish seems to have replaced lipstick as a more accurate barometer of austere times. In
2011, nail polish recorded global retail growth of 11%, double the growth rate of lipstick,
according to Euromonitor International. And between 2008 and 2011—a period characterized
by the global financial meltdown—sales increased by 43% (based on current U.S. dollar
prices at fixed 2011 exchange rates), compared with 7% for lip products, 11% for facial
makeup and 17% for eye makeup.
Nail polish has become the fastest-growing category in the global beauty market for three
consecutive years. What is most striking—and the reason why nail polish, rather than lipstick,
is a window into the health of the macro economy—is that its heaviest demand over the past
year has come from the U.S. and Western Europe, not from the BRICs.
The U.S. even dethroned Brazil last year to become the largest nail polish market in the
world, with retail value sales climbing by 31% to reach $778 million. At the core of this
bullishness was the growing perception of nail polish as an affordable fashion accessory and
a quick-fix morale booster for these tougher economic times.
The study’s findings reveal that the professional nail care market will
continue to grow, although at the slower pace. Having the right manicure
and color has now become the norm, as opposed to a luxury, driving the
market to prosper.
Technological
Acrylic most often eliminated
Traditional gel nails 2nd most (Biosculpture) – what if trend continues?
Obsolete and new nail technology
Gel-polish is no trend; it’s now an industry standard. The products continue to be
refined, the removal methods faster and safer, and the colors infinite. There are
now 46 brands of gel-polish. You can find lights that are UV, LED, combo
UV/LED, 1-finger, 2-hand — you name it.
However, in some countries such as Brazil, nail gels are not as popular as nail polishes, which are
more affordable. Gel products continue to grow at a stellar rate, posting nearly 30% growth in 2012
Environmental
Hard to make green products – so much paperwork (pdf) “not possible to
develop functional laquers without solvents”
Legal/Ethical/Political
Cosmetics in nail industry don’t require pre-market testing – be careful ?
Focus more on proper training than the fromulas – but this is not happening – pg
22
Cosmetics industry generally unregulated – economy, large company power
Natural/organic – not so much? – “green washing”
Social
Preferences – more gels released – competition
Nailsmag - Nail technicians are predominantly female, early middle-aged, have
finished some college, and have not been doing nails most of their professional
lives. The “average nail tech” is married with kids and she works part-time.
Celebrities help put nail trends on the spotlight
No celebrity this year had more effect on nails than Michelle Obama, who wowed
an international audience at the Democratic National Convention with her
lavender-hued nails. Artistic Nail Design, which made the color she was wearing,
said FLOTUS sent 42,352 new visitors to the company’s website.
Movie tie-ins
DIY has become increasingly popular
Drugstore sales of polish and nail products have soared: polish sales are up 59%,
36% increase in natural nail products, and a 100% increase of top and base
coats. The “mass market” nail care category was augmented by innovations in
application techniques, which could be seen in products such as Sally Hansen
Salon Effects and Nails Inc.’s Magnetic Polish.
In August, the popular but ordinarily snarky blog Jezebel weighs in: “Nail art …
might be the only form of primping and grooming that isn’t rooted in making
oneself more appealing to men or exploiting women’s insecurities. It transcends
skin color and hair texture and face symmetry and body type.”
Instagram very popular with sharing nailcare trents
Demographics – on the nail magazine thing
In the United States and more frequently in Australia, salons are offering
young girls and teens “nail parties” as a novel and successful take on
birthday parties.
Leading professional brands vary by region, with the smaller local brands
often leading within some regional markets. OPI holds a commanding lead
on the overall professional nail care market with near 20% of total market
share, followed at a distance by CND.
Currently, recent product innovations allow nail artists to harness cutting
edge technology, thereby decreasing service times to be cost-competitive.
With this in mind, marketers focus on covering extensive product portfolios
so salons do not have to take on additional brands.
Generation x are entering peak spending years
Ordering nail supplies on the web Iin US – may spread
Salongeek.com – compare tips and stories
Marketing plan
HYPERLOCAL TARGETING specific to stellenbosch
Influencers?
Smaller business can afford to be more edgy and less CSI oriented
More than ever before, the expectation among youth is that brands will respond
to their queries, complaints and interest within minutes. Waiting 24 hours for a
brand to revert with feedback is slacking in the eyes of these millennials. If a
brand insists on leveraging social media networks, they had better be able to
back it up.
Dress code – black with red/turquoise accents
Tone down some swearing
Mobile element on commission
Extend to tanning, dermal, permanent makeup, lashes
Social media overhaul, especially w.r.t getting Instagram
Use “crowd-sourcing” to harness new ideas
On 29 August 2013, Facebook introduced new competition rules which allow you to run a
competition on your page WITHOUT the use of a third party application!
There will always be tomorrow's hotter, sexier platform, with more special effects and better
make-up. Choose specific platforms that make the most sense for the brand and their
audiences. By doing so, you'll see greater returns and less wasted effort.
SIMPLICITY against brand overload
For internal:
Nail technicians are concerned about their health, but they haven’t taken all the
precautions they can to protect themselves from work-related injuries like
carpal tunnel or allergic reactions. Only 21% wear gloves most of the time.
THREAT: SORBET
ATTACH COMPETITOR ANALYSIS AS APPENDIX
Research section:
As I mentioned last year, online surveys are set to supplant other survey modes.
The growth in smartphones and increasing undersea-cable capacity have caused
us to jump to an entirely different diffusion curve. According to Gartner,
smartphones will reach 80% penetration by 2014, a game-changing statistic.1 By
then, I would expect online surveys to have become the datacollection mainstay.