A nail bar is a nail bar, is a nail bar, right? Wrong, Getenesh “Getty” Gizaw points out with fingernails that end in perfect pale acrylic tips.
The owner of SOHO nail and beauty salon in Sandton City, Johannesburg, South Africa, says the real business of a salon is about delivering an experience. How her clients feel translates into return business and new feet through her doors.
Gizaw, an Ethiopian-American, first founded G2, an events company, in the United States. The company brought to Africa the likes of Samuel L. Jackson, Bill Clinton and Beyoncé. When she convinced R. Kelly to perform his Sign of a Victory song as part of the 2010 FIFA World Cup celebrations, it meant Gizaw had to spend extended periods in Johannesburg for rehearsals for the opening ceremony. The self-confessed manicure- and pedicure-addict was in desperate need of a paint-job on one of these trips.
“The best place recommended to me was shocking. The carpets were green, the walls were pink and they did manis and pedis in a plastic basin, the kind my granny would have used,” she says.
Gizaw decided that Johannesburg was ready for a top-end New York-style salon experience.
“It was a gut reaction to begin with, then you take wise counsel and you work out your numbers and if that still adds up you’ve got a great business opportunity,” says Gizaw.
She shifted her home base from New York to Johanannesburg, which is part homecoming for Gizaw. She was born in Ethiopia, but her family was forced into exile when Gizaw was four. They settled in Liberia before Gizaw was sent to Europe and Canada for schooling. She gained citizenship after studying in the United States, where she graduated cum laude from Long Island University and polished her business management skills at Harvard Business School. Her father has lived in South Africa for 22 years.
When SOHO opened its doors in 2011, it was bright, modern, unisex and there was no cheesy panpipe music. It stocks American luxury products that match the high Living Standards Measure (LSM) of its clients. Oprah Winfrey, Rihanna, John Legend and Naomi Campbell get their nails done at Gizaw’s outlet when in town.
While the celebrity appeal helps, Gizaw knows that quality of service, the products and the added extras complete the puzzle. Her employees undergo a nine-week training course, not just to polish technical ability, but to buy into her service ethic and the brand. The products were imported from the United States, until Gizaw teamed up with a Pretoria laboratory to produce a product line.
Added extras include deluxe pedicure-chairs with massage functions, built-in storage space for bags and shoes, and pull-out tabletops with plug-points for gadgets and devices since the outlet offers free Wi-Fi. Gizaw also offers a ‘gofer’ service – staff collect dry-cleaning, stand in cinema queues, or run errands in the shopping center, while her clients enjoy treatments. She also convinced the center’s management to reserve three parking bays for her clients – a first in the mall’s history.
SOHO has a no-bookings-of-fewer-than-five-guests policy. This strategic move eliminates the hassle of dealing with no shows, and admininstrative work on credit cards and bookings. This way, she also capitalizes on walk-ins, and with 25 full-time staff, she does not turn anyone away.
Responding to a changing market and adapting to customer demands and consumption trends are critical. It is paying off. SOHO’s December 2013 figures showed 559 new clients, 800 return customers and it’s already turning a profit with a gross turnover upwards of R900,000 ($83,870).
There has been marginal growth in the beauty industry for the last five years, says Yolanda Knott, Managing Director of TE Trade Events, that organizes beauty exhibitions in South Africa. Euromonitor International puts 2012 growth in the beauty sector slightly down from 2011, at 10%.
Innovation is key. “Salons that want to survive are catering for everyone from men, to tweens to special packages like the ‘mommy and me’ offerings,” says Knott.
Gizaw is expanding her Sandton shop and has secured a prime location for her Cape Town store. The expansion comes at a time when the salon has scooped up top industry accolades for two consecutive years.
“I am looking for the right investors and partners to roll out stores into the rest of Africa. The health and personal grooming market in South Africa and Africa has been growing at double digits for the last few years,” says Gizaw.
SOHO’s brand is all New York, celebrity culture and the glitz of big city life. Diversification into Africa may require tweaking, but it represents opportunities. With the right financial backers, she will launch a SOHO academy. An offshoot brand aimed at a lower LSM market has already been registered under the name Chelsea, which is the sister suburb to SOHO – it is a clever alignment that maps out perfectly Gizaw’s enlarging business footprint.
Beauty industry still seeing global growth
The global beauty industry continues to experience exponential growth despite changes in consumer spending.
“What we’ve seen at Euromonitor International is that this time, with the recession, it hasn’t been lipstick sales that have been doing well, it’s more nail polish, and this is due to a number of different factors,” says Nicole Tyrimou, Euromonitor International’s beauty and personal care research analyst.
“Firstly, we’re seeing consumers are more concerned about their status and individuality. The rise of nail art has helped consumers use nail polish to express their personality through this. We’re seeing nail polish sales actually doing very well for both premium and mass brands across the world and especially in the United States.”
In the category of beauty and personal care, which is the fastest-growing, nail polish sales have remained strong three years in a row. The rapid increase in nail polish purchases could mean that a Nail Polish Index may replace the Lipstick Index, which was coined in early 2000 to indicate current consumer trends in the market. It was established on the premise that lipstick sales can be inversely correlated with economic health.
According to Euromonitor, the global beauty industry is looking much better than it did during the recession. It has experienced another strong performance ,despite changes in consumer spending and a slowdown in China’s economic growth.
“We’ve also seen at-home treatments, which are both pampering as well as a substitute for salon treatments. Facemasks and hair treatments are doing very well. We’ve also seen a lot of the fashion brands moving or expanding into beauty,” says Tyrimou.
Similarly, Africa’s beauty industry has indicated interesting trends despite its miniaturization, when compared to other international regions.
“Africa is one of the strongest growing regions. Together with Latin America, [they are] the only ones growing with double digit growth in 2013. However, [their industries are] still very small. It’s less than Eastern Europe. In terms of big players, [the continent] is still mainly mass dominated,” adds Tyrimou.
“Players such as Nivea and L’Oréal Paris are doing very well. It’s concentrated on hair care and color cosmetics, which are the two categories performing the best at the moment. We’ve also seen skincare doing better. In particular in South Africa, we’ve also seen premium fragrances doing very well. Companies such as Estée Lauder have really been investing in countries such as South Africa, where premium fragrances are growing very strongly.”