The Target-owned brand, its first in nail color, also exemplifies efforts to leverage the synergies in two of Target’s signature categories — fashion and beauty. Chief executive officer Brian Cornell has made it an initiative to find opportunities to offer high-quality affordable products that can only be found at Target. Beauty is among those with big potential, the chain said.
Bearing whimsical pop-culture names such as Rose Ceremony and Real Housewife, the 38 shades, plus top and base coat, will debut at all 1,800 Target stores and online on Jan. 17, retailing for $7.49 each.
“We feel we have an opportunity to provide a high-quality, affordable nail lacquer,” said Dawn Block, senior vice president of beauty for Target. Swimming against a sea of gel polish launches as well as higher-ticket premium brands, she believes the line offers a solution for “time-starved, budget-conscious,” shoppers. “We feel that was missing from the market. We give back time and money in a fun color palette. Within our colors, we think there is something for everyone.”
Market experts think the time could be right for mass merchants to mimic the success of indie nail brands such as Butter London and Bonita, while bringing down price points at a time when branded names are boosting suggested retails beyond the $10 price point.
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While Target would not comment on projections, industry sources said Defy & Inspire, which will be updated seasonally, could achieve first-year sales of $10 million to $15 million.
Defy & Inspire joins a broad selection of nail lacquers at Target including Sally Hansen, Essie and a gel-like exclusive for Target made by Orly called Color Amp’d. Target joins other such as CVS which is the primary seller of Spoiled, Rite Aid which is the dominant outlet for Julie G. and the private-label offers at Sephora and Ulta Beauty.
It is the latest of an industry barrage of proprietary cosmetics brands as chains seek to lure shoppers to their doors versus the chain down the street, while also plumping up gross margins. The margins in nail color are especially attractive — as high as 60 percent — industry sources said, with production costs low versus retail.
“It appears that national brands as we knew them are breaking down and stores are taking the initiative to introduce proprietary brands to differentiate themselves from competitors. In olden days, there was a knock against quality control and thin margins for retailer proprietary brands. Many of the quality issues have been improved by private-label companies and the margins for retailers as large as Target appear to be good,” said industry consultant Allan Mottus. Ulta Beauty and Sephora have strong private-label nail businesses, CVS is the primary seller of Spoiled and Rite Aid is the major chain selling Julie G.
Target is no stranger to nurturing its own logos with strength throughout several categories such as fashion and home. Last year Target purchased the Sonia Kashuk line, credited with being one of the most successful exclusive labels with estimated sales of around $75 million. The deal signified a stronger emphasis on beauty at Target, which plans on using the Sonia Kashuk brand as a platform to develop its own internal product design and development.
Defy & Inspire will get special treatment in 1,000 doors on Target’s newly designed end caps. Online, Target will use the platform to tell the brand story and offer tips and tricks. The collection features a patented, dual polymer technology providing a long-lasting quality without lights or special top coats. The formula is also free of harmful chemicals such as toluene, formaldehyde, formaldehyde resin or camphor and DBP.
The nail color category is showing signs of rebirth after two years of pale sales increases. While Nov. 1, 2015 IRI data showed nail color down 6 percent in multiunit outlets, retailers expect the category to return to black in 2016. “We are pleased with the way nail is performing at Target. It is one of our top-selling categories in cosmetics. We’ve taken a step of differentiation and offer items that aren’t available everywhere. We feel Defy & Inspire is just another step forward.”
Nail color, a source familiar with the category said, is almost 50 percent impulse. “If Target builds a big display and does great ads like they are known for, this will do well,” she said.