Fall 2009 Stamping Out Success Stories
Take one look at the elaborate fingernail art—detailed and colorful flowers, butterflies, seahorses, dolphins, even Santa Claus—and it’s hard to believe that they are a product of a relatively simple (and increasingly popular) nail stamping technique. But it’s true. And the successful company behind it all—Konad U.S.A. Distribution, Inc.—is poised for even more growth this year.
The numbers speak for themselves. Over 112 specialty retailers in shopping centers throughout the country and in Canada, sell Konad’s nail stamping kits—a number that continues to climb. “Every year we’re growing an average of 25%,” says David Ahn, general manager of the company located in Buena Park, CA. Konad reported sales of $4.8 million in 2008 and forecasts 2009 to land near $6.0 million. “It’s still very new, the product hasn’t matured yet,” says Ahn.
Why stamping is superior
Before the revolutionary introduction of nail stamping, consumers had to rely on more traditional methods—such as freehand—to produce quality nail art. With freehand, inconsistent results were often a problem. Since the technique requires a steady hand to paint a near-perfect image, the quality of the design depends on how talented the nail artist is.
Airbrushing is another technique to generate nail art but it has its own disadvantages. “Air brushing only gives you a solid shape,” says Ahn. “There are no details inside the borders unless you use a stencil.” The process, which uses a gun-like instrument and paint canisters, also needs new canisters every time a different color is desired. “It’s very time consuming,” Ahn says.
Nail stamping doesn’t require artistic talent or a paint canister. With Konad’s nail stamping kits, consumers can craft detailed, multi-colored nail art, easily and quickly, in their own homes, avoiding add-on costs at a nail salon visit. “Especially with the economy we have now, customers are looking to save money. Once you have a kit, each application is pennies. One kit can provide 100-500 designs, depending upon how intricate they are,” says Ahn. “Because it’s easy to reapply and remove, you could have a different design every day,” he says.
Nail stamping was invented in 2002 by Dae-Tong Choi, president of Konad Company, Ltd., headquartered in South Korea. The concept has since scooped up many “best new invention” awards, including the Gold Medal award at The Invention and New Product Exposition (in Pittsburgh, PA) in 2006.
Konad made its U.S. debut in 2003 through Konad U.S.A. Distribution, Inc. Initially nail stamping kits were exhibited at gift shows. Specialty retailers attending these events saw the potential, and the rest, as they say, is history. Today, Konad U.S.A. Distribution, Inc. is the exclusive distributor of Konad nail stamping kits in North America. “There’s a large network of distributors worldwide; Konad USA currently covers North America and we plan on expansion into South America,” says Ahn.
From kit to nail: Creating a work of art
Nail stamping works its magic with a nail stamper that, in six simple steps, transfers images from image plates (round stainless steel discs that hold images) to fingernails. The process starts by applying a base coat, or regular polish, to the nail. The next step is to apply “Konad Special Nail Polish” (a special, thicker nail polish) over the desired image on the plate. A scraper is then used to remove the excess polish. In the fourth step, the stamper is pressed onto the plate to pick up the design. The image is then stamped onto the nail with a gentle rolling motion, or by pressing down and lifting up immediately. Finally, a topcoat is quickly applied to seal in the design.
All of the tools used above are contained in each of Konad’s nail kits. There are over 10 kits available. Ahn says retailers are encouraged to sell kits first because when customers purchase items such as stampers and image plates individually, they often use them with regular nail polish and the process doesn’t work.
There are roughly 80 different image plates. The majority of plates hold seven images, the French image plates have six. (“The main trend right now is French tips and pedicures,” says Ahn.) Retail prices range between $15 for small kits and $440 for large, professional kits. Markups range between 500-700%, depending upon the Konad account established—there is different volume pricing.
While designs can be changed daily to match most every outfit, on a prepared nail that is buffed with a base coat and polished, designs are meant to last for 2-3 weeks. Customers can apply designs to their accessories as well. “You can apply it on any non-porous surface. I’ve seen people put it on their shoes,” says Ahn. Other popular accessories include cell phones and sunglasses.
Ahn advises retailers to beware of counterfeits. Some in the marketplace have taken Konad’s copyrighted designs and replicated them. These products don’t work, says Ahn. “There’s a technology behind the images. They can’t replicate what we do,” he says.
Konad’s stamping kits are designed to go the distance and are guaranteed against defects. If a defect is discovered Konad offers free replacements.
Attention to details
Ahn joined the Konad team in 2005. Prior to that, he worked for an electronics distributor. It was there that he learned the all-important basic lesson in salesmanship: The customer is always right. At Konad, Ahn makes special efforts to remember customers’ names and company information. Creating client relationships has enabled him to not only retain the accounts he has, but to generate more, he says.
Ahn says the company has changed a lot since when he first came on board: Sales have doubled from $200,000 per month to $400,000 per month. One of the changes Ahn implemented has been in their kits’ nail color assortments. For example, “The B-set originally came with red, white and blue and blue wasn’t popular—retailers complained,” says Ahn.
After sending email surveys to numerous retailers requesting consumer feedback, they changed the blue color to green. The green works well as the leaf color accompanying the many floral designs in the set.
Attractive and durable packaging and fast shipping are key elements of the Konad success story. Konad’s larger nail stamping kits are packaged for protection in a hard, rectangular box. Smaller kits, retailing from between $20-$50, typically have a see-through window and come in enticing designs. An example is the French Nail Art box, decked in pink plaid and flowers.
With a 20,000-square-foot warehouse and distribution center in Buena Park, CA, most shipments are sent out the same day, or the day after, an order is placed. “We have containers coming in twice a month. We restock accordingly. There is perennial product,” says Ahn.
Retailer Jake Campbell in Boise, ID, says he has been selling Konad products successfully for four years now. “Its been great in every mall I have put it in because of its great mark-up and big product selection for those repeat customers,” Campbell says.
Konad’s kits are sold through beauty supplies stores as well as carts and kiosks. But, Ahn says, the stores have not been as successful an outlet for Konad’s products. At the stores, the products sit on shelves unsupported by sales associates and alongside many competing ones. “The nature of the product is that it’s a demonstration product,” says Ahn. Specialty retail venues spark consumer interest by highlighting the product with effective demonstrations among large audiences.
“If you’re able to have a strong sales staff, your chance of success is very high. A lot of people aren’t familiar with it. When they find it on the market for the first time, they want to buy
it,” says Ahn. The majority of our sales come from a good demonstration, he adds.
Konad’s best-performing cart location is in Las Vegas, NV. Other top locations include Nashville, TN and Orlando, FL. “All three locations are major tourist attractions, have a really aggressive sales staff, and are attentive to each customer. The sales team is structured and very informed and the demos are really fast,” says Ahn.
Konad demonstrations involve prepping the nail by applying a base coat, having the customer pick a design, stamping it on and then finishing with a quick layer of top coat. “It’s only a two minute demonstration and the sales associates explain the steps as they go along,” says Ahn. “As customers begin to understand how fast and easy it is, the associate moves on to explaining the various kits that are available.”
“We ask that retailers have a proper demonstration. It’s important for the customer to be educated about the product. If you skip steps, it could be a problem when they get home,” says Ahn. To be sure consumers understand the process before they have left the mall, some retailers also have a self-demo area allowing customers to try the process themselves, after theinitial demonstration. “Even if you see it in person and it’s on your nail, they still don’t understand how it happened. When they do it themselves, they feel confident and are apt to buy it,” says Ahn. (Instructional CD’s are included with the larger kits.) Retailers are encouraged to play a Konad DVD at their carts. This way while one person is having their nails stamped, “another can watch the video and keep their interest alive,” says Ahn.
Retailer Kathleen Highland in Irvine, CA finds Konad really easy to demonstrate. “It is a product I totally believe in. It is easy to demonstrate, fun to sell, but more importantly fun to do and wear,” she says. “It is a good quality product I can proudly stand behind. My customers like the quality, affordability and ease of use,” Highland adds.
Konad doesn’t offer its retailers turnkey startup packages, but they do recommend an assortment of basic kits and accessories for cart retailers setting up for the first time. Opening orders should include kits, individual image plates, special nail polish, and accessories. These cost an average of $3,000. Posters, brochures and display items—such as display “hands” with pre-designed nails and display racks for smaller items—are included with an opening order. Ongoing support for retailers includes updating these materials as necessary, demo CDs and DVDs, and sending out product samples at no cost. RMUs and carts or kiosks are not included.
Specialty retailers can be sure their starter assortment will include a hefty percentage of B and C kits, the two highest selling kits in the Konad mix. The B-set includes four image plates, with images of lips, geometric patterns, flowers and butterflies, three special polishes in white, red and green, one stamp and one scraper. In the C-set, customers will find two image plates, three special polishes, one stamp and one scraper. Image plate designs include flowers, hearts and stars and polish colors come in white, red and blue. Smaller kits, such as the S-set include as little as one of everything and larger sets include extra accessories such as emery boards, tweezers and rhinestones. In addition to kits, retailers can also stock individual items such as rhinestone sets and nail buffers—these offer easy add-on sales.
With the vast array of designs Konad delivers, they reach most every female demographic. “We cover a very large demographic, from teenagers to grandparents. They all do nails,” says Ahn. The French design is most popular among the younger set (high school students to women in their thirties and forties), but all age groups gravitate toward the florals and butterflies.
New image plates are introduced on a regular basis to keep up with the trends, as well as encourage repeat buying. Konad has a design team at their manufacturing headquarters in Korea that scours the market for new ideas. Other design ideas come from customer suggestions.
Licensed images, such as movie characters, are a recent development being incorporated into nail art. Coraline nail art licensed by Universal Studios Licensing LLP, is one such deal. Coraline is an animated character that had her movie debut in February of this year. The company hopes to move into sports teams and other licensed characters to expand their market reach in the future.
In addition to new designs for nail stamping, Konad introduced a small line of cosmetics in 2008, which they are currently testing with a select number of retailers. This cosmetics line is intended to complement nail products and also includes other products such as collagen masks, eye serums, moisturizers and peels. “It’s an easy add-on,” says Ahn.
Konad has also been innovative in attracting specialty retailers. The company currently has an arrangement with General Growth Properties in which retailers from these centers are offered special incentive pricing. “It’s something new we’re working with, in the last six months,” says Ahn, pointing out that they hope to expand their presence in shopping centers through such marketing strategies.
Innovation is only one of the key principles of the Konad story. Konad offers its retailers, and thus its consumers, a product that saves both time and money and delivers professional results in minutes. Add in a Wow!-producing demonstration and specialty retailers are stamping out their own success stories.
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