Vegas nail salons are in a mini war trying and hoping to get business in their doors. The strategy they’ve chosen is to try and undercut the other salons based on price. Banners on many salons tout $20 pedicures, even $19 pedicures, and $10 manicures.
At the very same time a pedicure on the Strip can be around $50 to $145 and a manicure from $25 to $79. Surely the local salon owner could attract loads of clients with a price less than half of what is being charged on the strip right?
In the short term this price war is good for the consumer. They save lots of money. If you are a regular at any of these salons and you are used to paying more, you’ll get a nice big discount without doing a thing once that banner goes up. Good for you, but don’t celebrate just yet.
If margins on a salon go down they will be forced to lay off people or cut costs somewhere as financial reality and pressures mount. It may take a while but all the salons who participate in the price war will suffer. Those with deeper pockets will last the longest and when salons start closing and the war is over, the prices will again go up.
Salons that have deeply discounted their prices will have unhappy employees as their “cut” of the revenues gets smaller and their income goes down. How would you feel if you were a professional with years of experience but instead of an increasing income and a bright future your income keeps going down? One day you would have enough of the struggle and go do something else. After all bending over for manicures and pedicures and inhaling toxic fumes all day is hard work. Many manicurists do the work because the money is good. As the money dries up, so does the talent. Unfortunately the best nail techs will leave first leaving those with less talent and less skills.
Another less talked about result of reduced revenue is inferior service and materials. Owners will be searching for cheaper supplies and may be tempted to skip sanitizers and to dilute polish, gels, pedicure lotions and baths. It can actually lead to a health hazard when salons skimp on the basics. They may even be tempted to hire non-licensed staff that are willing to work for less.
What can a salon do? What should consumers do in response to the price cuts?
Salons should resist the urge to enter a price war. It’s usually fatal. There are many other ways to compete and perhaps the best way is to increase service, increase the value, and increase the experience without lowering prices. This seems counter intuitive, but sometimes raising prices can attract a whole different client set and perception and actually increase sales.
The salons on the Strip are charging a fortune and are doing quite well. Yes you say, that is because of all the tourists and tourists don’t mind spending money. To some degree true, but have you seen some of the homes here in the valley? Not everyone works at 7-11. There are many people that live here for which price is of no concern. A lot of those people will go to the salons in the luxury strip hotels because they get that special treatment and that special attention.
As a regular customer you may rejoice when the $20 pedicure banner goes up, but if you like your salon complain and advise them not to keep that price for long. Tell them you like the place too much to see it go out of business because of low prices.