The claws are out and Sally Hansen’s Miracle Gel has a target on its back.
This story first appeared in the July 29, 2015 issue of WWD. Subscribe Today.
“There certainly has been an influx of hybrid or gel polishes at mass lately following the launch of Coty’s Sally Hansen Miracle Gel,” said Carrie Mellage, vice president of consumer products at Kline Group. By last count, at least 10 new versions of “gelish” lacquers that don’t require a UVA or LED lamp are infiltrating retail shelves and salon doors. The list of entries crosses the spectrum from Sinful’s entry-level prices to premium salon launches, such as Jessica Cosmetics. Many salons are even favoring the quick-dry formulas over traditional gel manicures made popular by brands such as Shellac — the process is faster and brings patrons back sooner.
Kline’s Mellage said she expects to see the activity continue to boost nail-polish sales and reverse the softness in the mass market over the past two years.
But retailers fear the proliferation of brands could dilute the market, confuse consumers and cut the sales bonanza short. They point to other categories, such as mineral makeups and BB creams, where imitators flooded the market with low price points or inferior goods, compressing the category life span.
Marketers of the competing gels counter that there’s much more potential in at-home gels, especially those with new technology or a value proposition. They argue the launches will significantly broaden the reach. “The segment has grown increasingly cluttered, but is not fully saturated yet,” said Mellage.
What all agree upon is that Miracle Gel, along with Revlon’s Colorstay Gel Envy, are credited with saving nail-color sales from continuing a downward spiral. For the 52-week period ended June 14 as tracked by IRI in all mass outlets, overall nail-care category sales are starting to recover, up 0.51 percent over the same period last year to $1.6 billion. Nail-color sales were still down, but off 4.3 percent versus a 7.4 percent decline recorded in March. While that might not seem cause to celebrate, retailers said it would have been much worse without Miracle Gel and Gel Envy.
While there could be room on the shelves for one or two contenders, retailers are concerned the rush to distinguish one line from another is only building confusion. Each brand has its own calling card, whether it be price, a one-step process or the promise of longer wear.
“There’s overused terminology of gel and gel-like,” lamented one top chain retailer. Also, many of the niche brands are entering with budget pricing, leaving retailers no choice but to slash prices to compete.
Wal-Mart Stores Inc., for example, knocked its price on MiracleGel down to $7.17 (suggested retail is $9.99) to keep competitive with retailers selling cheaper hybrid gel polish.
“There are some competitors that are either in the market or coming into the market and it is not clear that they provide the same product benefit as Sally Hansen at this stage,” said David Cole, vice president of U.S. marketing for Coty. For its part, Coty is keeping the momentum going with a new stronger topcoat and 20 new colors. Early out-of-stocks caused by the consumer frenzy for the at-home gel manicure have been mostly solved. “The step-two Top Coat is back in stock, but like any color brand, we have our occasional challenges with shades that beat our trend projections,” explained Cole.
But occasional empty shelves haven’t stopped the Miracle Gel phenomenon. The company said the brand already has a 19 percent market share of the business. Cole added Coty will continue to support Miracle Gel aggressively because “penetration and trial levels on this product are still relatively low and so there’s still substantial opportunity for growth.”
Industry sources estimate Miracle Gel is well on its way to hitting the $100 million market, earning the crown as the biggest nail launch in history and more than doubling the original sales goal. Coty would not comment on projections.
Other nail-polish brands want in on the growth potential. Entries were abundant at the National Association of Chain Drug Stores’ annual meeting in April, as well as at the Cosmoprof North American convention in Las Vegas.
“Some of the other introductions are from knock-off brands,” said a drugstore retailer. “Do they mean anything? I don’t know.” Added another buyer, “There are leaders and there are followers. Unfortunately, there are more followers these days and they don’t add anything to the market, they generally bring down the price.”
But many chain executives were quick to add they don’t want to leave out any consumer and indicated they’ll adopt a good, better and best strategy with a wide range of price points. One company hoping to be the entry is Sinful Colors with a new SinfulShine 2-Step Manicure with Gel Tech priced at $2.99.
At the other end of the pricing spectrum, Red Carpet Manicure touts its distinctive Red Carpet Ready line at stores such as Ulta Beauty. The product will retail for $15 excluding a light required to set the gloss. Unlike Red Carpet’s gel system (which duplicates the process used in salons), the new entry does not require nail preparation, a base coat and or a topcoat. “It is a real gel,” said Barry Shields, managing partner for Red Carpet. “It is not one of those pretenders who don’t live up to the hype.”
Markwins hopes to invite more usage through a one-step gel that doesn’t require a topcoat. LA Colors just rolled out a “gellike” polish called Extreme Shine that the company said creates a gel like shine and which sells for around $2.
Essie, a leader in gel systems in salons, offers Essie Gel-Setter, a topcoat said to transform any color into a “gel-like” finish. OPI has a three-step lacquer system called Infinite Shine with a primer, color and topcoat. Target aims to stand out from the competition with an exclusive gel offer called Color Amp’d from Orly, a mostly salon brand. For professionals, Orly markets Epix Flexible Color, a two-step system with properties that bend with the nail to reduce chipping. Cover Girl also has its entry called XL Nail Gel and L’Oréal offers a three-step product called Extraordinaire Gel-Lacquer.
“They can’t all survive and I think some companies hope Coty takes its eye off the ball with all of its new brands,” said a drugstore top merchant, referring to the 43 brands the company is due to absorb from Procter & Gamble. “We just have to hope we pick the right lines to carry.”