The U.S. nail color and care market fared well during the economic slump, a new report from Mintel, “Nail Color and Care -US, January 2013,” found, while private label nail polish removers benefited most.
The nail color and care market in the U.S. grew by nearly three-quarters (72%) since 2007, with sales estimated at $2.5 billion at the end of 2012. Growth is expected to continue through 2017, albeit at a slower pace than previous years, with sales expected to reach just over $4 billion.
“The beauty industry generally benefits when consumers have higher levels of disposable income; however, the nail care industry has experienced strong growth in recent years, despite the weak economy,” says Shannon Romanowski, beauty and personal care analyst at Mintel, in a press release. “Nail polish offers women an affordable way to experiment with new colors and stay current with fashion trends, often for less than $10 a bottle. The affordability of nail polish, combined with new products and colors, makes nail care a reasonable splurge for lower- to middle-income women.”
While the nail polish remover segment is growing, Mintel reports nail polish remover is viewed as “extremely functional,” and thus private label dominates the market. It has more than an 80 percent share of the FDMx nail polish remover segment, and a sales increase of 18.6 percent in the 52-week period ending Oct. 7, 2012. Additionally, private label nail polish remover gained 5.5 percentage points of share.
The segment has a rather long purchase cycle of 131 days, due in part to its long shelf life. On average, there are only 1.3 purchase occasions during the year. Annual volume is only 1.4 units, with a volume per purchase occasion of 1.1 units.
Private label is the only brand to have both high buying and penetration rates. The household penetration leader at 12.7 percent, private label falls significantly higher than the 0.7 percent for Cutex Quick & Gentle. Onyx Professional is third at 0.6 percent. Private label is also the annual volume leader at 1.4 units. Cutex Quick & Gentle, Cutex, and Sally Hansen Kwik Off are tied for second at 1.2 units, with Onyx Professional and Sally Hansen following at 1.1 units.
In the nail accessories and implements segment, private label is the only player in the segment that has recorded both sales gains and gains in segment share, indicating that consumers are highly motivated by price, rather than brand.
The nail accessories segment has seen sales decline by 4 percent since 2007, with all companies losing segment share in FDMx. The strong functionality associated with this segment is likely driving consumers to private label.
Private label is not among the leaders in the nail polish segment, as consumers have shown a greater interest in branded products. However, retailers are still implementing creative merchandising to draw shoppers into their stores, such as CVS, which announced in 2012 that it was launching Nail HQ in more than 2,000 of its locations. The in-store kiosk showcases the latest trends and innovations in nail care.