Over a decade ago, Leonard Lauder of Estee Lauder, made an astute observation. Lipstick sales went up when the economy went down. When belt tightening restricts a Middle American woman from buying designer clothes, shoes and handbags, she seeks inexpensive ways to add luxury to her life. The answer. Cosmetics.
Have to wear a tired old suit and 2” black pumps to an interview? Add a pop of color. Dress it up with a fresh new shade or your favorite cosmetic.
Leonard Lauder dubbed the phenomenon the lipstick index. Now a sister indicator has surpassed lipstick. Renato Semerari, president of Coty Beauty, the parent company of top-selling brands like OPI and Sally Hansen calls it the lacquer index.
Nail polish and associated products have had a meteoric 65% rise in sales since 2008. Market researcher NPD Group cites nail polish sales up 63% from last year.
The increase in sales of nail polish can be attributed to the fact that many American women view it as a cosmetic staple. When thinking of cutting back on the family budget, they’ll forgo the professional manicure or pedicure and invest in a few bottles of nail polish instead.
Today that cosmetic staple is one of the most affordable fashion statements a woman can make. To the manufacturers’ delight, women are no longer sticking to one look. Fashion identities and nail preferences are becoming “as fluid and interchangeable as the wallpaper on one’s computer screen,” explains Peter Philips, Chanel Makeup’s creative director.
According to NPD, 627 new nail polish colors were introduced in 2011, as compared to 263 in 2010. The average cost of a bottle of nail polish is anywhere from $8 to $30, but prices have crept up upwards as new “features” are added. It’s reported that pop music sensation Rihanna showed up on the red carpet at the Grammy’s with her nails painted in a 24 carat gold infused gel, retailing at $5,000 per bottle. Rihanna characteristically pushed it even a step further. In need of more bling, she added a dollar sign to her pinkie finger.
Colors aren’t the only thing new about the nail product lines. Long-lasting gels, art materials and application instruments, three-dimensional and special effects have contributed to a 67% increase in the sales of department store brands over 2010, and a 29% increase in mass-market chains. NPD tallied these add-on sales at $710 million.
The real story here isn’t about consumer behavior in poor economic times, as it is about feverish and spot on product extensions and innovations. The cosmetics industry has been able to capture lightening in a bottle with the convergence of consumer sentiment, and economic and fashion tends all perfectly aligned.