BW Confidential - Issue #9 - March/April 2012 - (Page 38)

Insight: Make-up Nails Growth at your fingertips The nails market is still seeing a strong performance, and while high double-digit increases may level off slightly, growth is still on the cards by Oonagh Phillips The nail phenomenon continues apace. Sales of nail products on a global basis were up by 10.8% in 2011 to €5.46bn, according to Euromonitor. Growth has been strong in most markets, confirming that the sales spike is the result of a real consumer trend. Markets that stood out last year were Latin America (+25.8%) and the Middle East (+12.9%). In prestige, growth has been even more impressive. In US prestige, sales were up in the 50 to 60% range in 2011. The prestige category there has been driven by brands such as Chanel (which came out with an entertaining YouTube video to showcase different colors in the form of an old-style dance number, with the fingers doing the dancing), Lauder and Deborah Lippmann. The question is how long this growth can last. “You could think that this [double-digit] growth can’t go on indefinitely. However, 2012 is unlikely to see any major change, but over the next two to three years the trend should begin to slow,” says makeup formula supplier IL Cosmetics marketing manager Aurélie Ignaccolo. Analysts say there is still much room to expand, especially in prestige. They compare nail products’ trajectory to lip gloss, which 10 years ago wasn’t considered a prestige item but then took off and became an established market segment. For nail products to reach the same sales levels as prestige lipgloss, there are many years of growth ahead. Swiss brand Mavala export manager Doris Maute Bobillier agrees: “[Growth in] the nail category is sustainable. Well-groomed nails have become a part of a woman’s overall look.” Higher growth, more brands A slew of new brands have come onto the market, many with an aggressive pricing policy. Even some of the smaller players have managed to carve out strong position in the market, with retailers reporting that what were little-known names just a few years ago are now making the best-seller lists. However, 38 T industry watchers say many of these new lines have banked on one-shot launches aimed at capitalizing on a high-growth trend rather than wooing a loyal consumer. Mavala, which has been in the business for 50 years, foresees a ments. She adds that while the trend for strong colors (such as oranges or bright pinks) will continue, there will also be more neutral and natural shades on the market this year. Newness drives growth As well as accessible prices, growth has been driven by innovation. This began with unusual colors and nail art, and moved on to items like crackle polish, 3-D designs glitter polish and magnetic varnish, where a small magnet is held over the polish and pulls at the iron powders in the formula to create a marbled effect. Meanwhile, in the professional arena, OPI claims to have come out with what it calls “a new business opportunity” for salons with its new GelColor product—essentially a gel and color in one, which is said to last up to twoto-three weeks without chipping. “GelColor by OPI allows consumers to have OPI shades applied for weeks of wear; it offers a new choice to the consumer and will be an industry game-changer in 2012. It will also give retailers a push to open new nail bar locations for fast, 30-minute services,” comments OPI vice president international sales Christian Lacheny. Industry watchers say the technology from salon products is likely to make its way into the retail market. This, combined with nail polish’s status as a fashion accessory and its affordability will mean strong sales for some time to come. n March-April 2012 - N°9 - BW Confidential “ Growth is sustainable. Well-groomed nails have become a part of women’s overall look Mavala export manager Doris Maute Bobillier return to better quality products. “Budget brands are offering poor-quality products. In the long run, consumers will see this, and won’t be fooled for very long. So logically these budget brands will disappear,” says Maute Bobillier. IL Cosmetics’ Ignaccolo is already seeing a change in consumer behavior. “Consumers seem to be returning to a more classic use of nail polish. We are seeing an increase in demand for long-wear formulas, whereas this feature took a back seat during the boom for unique colors and fast-dry products,” she com- ” s Mavala sees a return to better quality products, while OPI says innovation will drive growth

Table of Contents for the Digital Edition of BW Confidential - Issue #9 - March/April 2012

Cover
Comment
Update - Brand & retail news recap
- Companies on the move
Take note - Market facts, figures & trends
Best of BW - Highlights from our e-publication
Launches - The latest in fragrance, skincare & make-up
Interview - HSN gm of beauty & merchandising strategy Betsy Olum
Insight: Make-up - Category overview
- Nails
- Retailing
- The latest trends
Wellness - Online marketing
- Spa case studies
Retail - Pos technologies
- Store concepts
Digital - Social media strategies
Market watch: Brazil fragrance - Country overview
- Fragrance industry roundtable
- Prestige fragrance retailing
Strategy spotlight - Case studies to inspire
Travel retail - Americas regional overview
- Brazilian travelers
- Interview: Nuance Group North America...... Andrew Rattner
Radar - Six up-and-coming beauty brands
Packaging - Electronics in beauty packs
- Latest innovations
Last word - Crépuscule ceo Christophe Lerouge & creative director Olivier Boré

BW Confidential - Issue #9 - March/April 2012