Slow economy spurs at-home nail care
The housing market is sagging, energy and food prices are rising and consumers are increasingly looking for ways to trim spending. So what does it mean for the nail care segment? Are money-conscious shoppers forgoing pricey salons?
“I think perhaps what is happening is that women who were going to salons are doing much more of a natural regimen right now, which would talk to the growth we are seeing in natural nail solutions,” said Mike Matulis, senior vice president and category manager for nail care company Pacific World.
According to ACNielsen data for food, drug and mass (including Wal-Mart panel) provided by Pacific World, sales of nail treatments were up 4 percent to $140 million for the 52 weeks ended July 12. More specifically, sales of strengtheners were up 19.6 percent for the 52 weeks and up 23.5 percent for the 12 weeks ended July 12. Meanwhile, such miscellaneous products as nail whiteners and nail biting solutions were up 31 percent for the 52 weeks and up 50 percent for the 12 weeks ended July 12.
Meanwhile, sales of implements inched up only 0.4 percent to $379 million, while color polish was flat at $320 million.
Some of this growth could be coming from salon-goers who are either opting for at-home treatments or are visiting salons less often to cut costs, possibly doing more nail “maintenance” at home in between visits.
Underscoring this notion is data published in Nails Big Book 2007-2008 report. According to the report from Nails, a business publication that serves nail salons, nail technicians, nail product marketers and distributors, “The market is down for the third year in a row. More of you told us that building clientele was the No. 1 challenge you had in business.… A lot of you are in areas hard-hit economically, and your business is suffering as some clients lose jobs and have to cut back.”
According to Nails, there has been a 10 percent decline in dollars spent by salon customers on nail salon services from $6.84 billion in 2004 to $6.16 billion in 2007.
Sales may be slumping for salons, but that doesn’t mean that women no longer care about the health and appearance of their nails. This represents a great opportunity for those retailers who can further promote at-home nail care regimens.
“Consumers are being frugal and holding back discretionary spending—they continue to focus on the basics, which is helping discounters, wholesale clubs and drug stores,” stated Stacy Janiak, the U.S. retail sector leader at Deloitte. “Retailers will need to continue to aggressively woo consumers and find creative ways to present their merchandise in order to get their share of consumer spending.”