December 4, 2011
The dull and dreary economy has taken a huge toll these past few years, but you wouldn’t know it by looking at our fingernails. From Midnight Sapphire to Bang Bang Red to Peachy Parrot, colorful manicures and pedicures have emerged as the go-to indulgence for many women trying to defy the economic doldrums. And the nail care industry is reaping the rewards.
The story may sound familiar: In 2001, Leonard Lauder, former chairman of Estée Lauder, noticed a counterintuitive uptick in lipstick sales during that year’s recession, and subsequently coined what came to be known as the “lipstick index.”
A decade later, it’s nail polish.
Sales are up 59 percent in department stores versus the same time last year, according to market research firm NPD Group. And that’s after a 36 percent increase in 2010 over 2009. Suzi Weiss-Fischmann, executive vice president and artistic director of nail polish brand OPI, says company sales have also done well during and following the recession.
Paws and Claws
But those increases do not mean women are foregoing nail salons for the at-home manicure. Salons, too, are experiencing a bump in business. Over the past five years, revenues are up an average of 2.2 percent annually, despite a small dip in the wake of the financial crisis , according to Caitlin Moldvay, an analyst at IBISWorld. In fact, manicures and pedicures are one of the few luxuries women are holding onto, even as they make cuts in other areas.
“No more Starbucks or bookstore visits,” says Clare Morgan, who lost her job as vice president of marketing for a financial services firm in Tampa, Fla., last February. “If I want a gourmet coffee, I've learned to make it, and I now have a library card.” But Morgan still shells out up to $35 for a monthly manicure and pedicure. “It is the one luxury that is really a necessity,” she says.
IBISWorld analyst Moldvay says that Morgan’s attitude is a common one, and cites affordable luxury – a basic manicure last year cost $18.79 on average – as one reason for its prevalence. “Nail salons allow consumers to indulge a relatively low-cost luxury service, at a time when they’re being forced to cut spending in an array of other areas.” Some other beauty services aren’t faring so well – tanning salons, for example, have taken a hit over the past few years, and the hair salon industry has contracted slightly since 2006.
Some women also find nail care to be a low-cost way to maintain their polish, so to speak, when forging into the job market – and especially when preparing for dreaded job interviews. “During interviews, employers look for little things,” says Morgan, “and mani/pedis fall into that group. How have you maintained yourself?”
OPI’s Weiss-Fischmann describes it as the finishing touch for a put-together look. “While nail lacquer is affordable, it’s also a great fashion accessory and an easy way to … complete your entire look,” she says.
Still, women have reined in their nail care regimes in some ways in response to tough economic times. “Nail salons have seen declining demand for some of the higher cost services,” says Moldvay. Morgan, for one, says she has cut her nail salon visits from bi-weekly to monthly.
In response, salons have accommodated lighter pocket books by getting creative with their discounts and promotions. At the most basic level, they’ve cut prices: The average price for nail salon services declined 13 percent from 2008 to 2009. But Moldvay says they’ve also begun to expand the services they offer, selling more facials and massages, for example. Some have even started membership clubs.
The ingenuity has paid off – the number of nail salons nationally has grown at an average annual rate of 4.8 percent over the past five years. Today, there are over 198,000 of them, compared with 165,000 in 2007. And the number of people employed in nail care has grown by 15 percent, from almost 188,000 in 2007 to a projected 217,000 in 2011, according to IBISWorld data. Further growth is expected over the next few years, making it a rare growth industry – albeit a low-wage one, with an average wage of $10.61 an hour, according to the Bureau of Labor Statistics – at a time when unemployment is still 8.6 percent.
Ultimately, though, the industry’s resilience could come down to that famous recession standby, escapism. Says Morgan: “For that 90 minutes I can turn off my phone, I don't think about laundry or bills, I relax and let someone take care of me.”