As part of our exploration of all things wellness, Design Project Leader Myree Tydings discusses seven key problems affecting the fragrance market, and what needs to be done to solve them.
Sitting down to research and prep for this article, I felt I already knew a fair amount about the topic due to my experience working with fragrance retailers. I had a few gut feelings about the problems facing the sector, however, I wanted to dig a little deeper. In doing so I found the most blatant issue aligned with my personal shopping experience – the. fragrance. market. is. oversaturated. Surely brands must know this? Yet they can’t seem to break their habit of releasing more perfumes whenever the market is slowing. And it is slowing: “Sales of prestige fragrance grew by 1.4% whilst celebrity fragrances fall by 22%,” reports UK consumer market company, NPD Group.
As far as I can see, there are seven significant reasons for the slump in sales. Here’s how I’ve summed them up:
“The number of fragrance launches is absurd: 2,095 new fragrances launched globally in 2016, compared to 581 in 2003.” ImgoenMatthews.com. Brands need to focus on quality over quantity – build the credibility of existing ranges, focus on engaging stories and ultimately drive second purchases.
“Customers are sometimes more inclined to purchase a fragrance because it’s the latest one or comes with a promotion and less because they actually like the smell. This does not generate the all-important second purchase.” Fabien Callens, Marketing Director, Kenneth Green Associates Source.
Retailers need to keep up in a world of social media and sharing. How is fragrance shared? What is new and exciting to talk about? Creating memorable experiences and new ways of interacting with the customer is essential. I particularly like Diptique’s Soho pop-up store that celebrated 50 years in perfume making. It invited guests to have one of their drawings translated into a personalised scent as well as take a selfie ‘postcard’ to send to a friend. The friend could then receive a free sample on entering the store with the postcard – nice.
The novelty has worn off and people are becoming more cynical of the same product, different celebrity. “We saw it in 2008 right after the crash, and it’s now a given in the US industry that the celebrity market has collapsed. Rihanna and a few others have scents that are doing well, but it’s nothing like before.” Chandler Burr, the former scent critic for the New York Times and author of several books on the subject, source. Building a credible story around the fragrance itself without relying on a famous name to sell it can transform a customer’s perception.
For a product that’s so full of glamour, mystery and delight, the perfume retail experience is largely underwhelming – rows and rows of similar looking and smelling fragrances that are only differentiated by name. How is someone expected to cut through that, let alone be inspired? Brands should be rethinking traditional outdated methods of merchandising and allowing retailers the freedom to creatively sell their product.
Sephora has begun to tackle this, by shifting focus away from the wall bays of bottles and creating a play area called Insta Scent, and Bloom in Covent Garden has merchandised by smell type. Bloom’s focus is on the customer journey – sampling, spending time and finding their true fragrance match. Another good example is the niche but savvy store, Floral Street. It sells a small range of own-label scents that are merchandised by lifestyle and personality.
No matter how beautiful and sexy the model is, or how pretty those flowers are she’s prancing around with, when you see too much of this sort of imagery, it loses its appeal and glamour. That ship sailed long ago. Is there an opportunity to dig a bit deeper? Scratch the surface, to tell your product story and give the consumer a story to buy into. If someone understands the provenance, it gives the product so much more value and depth.
There’s a fine line between discounting a fragrance so much that it loses all worth, and pricing it way out of your target customer’s reach. “Does discounting work? Value sales growth for the total fragrance market has averaged just +1.5% annually over the past three years. Discounting is not the answer.” ImogenMatthews.com, Source.
Know your customer, and think twice about devaluing what is a luxurious treat to a cheap smell. Especially at Christmas – yes, discounts are expected, but if there are too many, perfume becomes a seemingly worthless commodity. This leads me perfectly to the next point…
What was previously considered a great product for gifting, is now considered by consumers to be a risky, or even sometimes a lazy gift idea. How can you guarantee it will be the right scent for them? How do they know it was a considered/personal purchase? Fragrance is such a personal preference; it can easily go horribly wrong.
There are some brands shaking this up, with unique and inspiring ways to make scents a special and moving gift. ScentBird and Commodity Goods are two that come to mind, making samples and testers fun, and personalisation possible with basic, bespoke scent mixing.
Yes, there are very clear problems within the industry, but the answers themselves are actually fairly obvious. It’s much easier for new retailers to come in with disruptive formats and revolutionise how fragrance is sold than it is for established retailers to change their traditional mindsets – it requires a certain amount of bravery on their part. However, only those who can shake things up enough to drive such a change across so many spokes in the wheel have a chance of any future success.
Click here to read more of our thoughts on wellness, and if you would like to talk about anything discussed here please don’t hesitate to email email@example.com.
Happy holidays! Our December 2019 edition of Experiences We Love is a Christmas special, featuring festive decorations at Liberty, a city made of gingerbread, sustainable Christmas markets and some clever word play from Boots...
When it comes to perfume shopping, it can be hard to find 'the one'. Our Associate Director of Creative Strategy, Michelle Bower, contemplates what makes the decision so difficult.
In this month's Experiences We Love, we'll be celebrating some amazing experiences created by others, from Glossier's hotly-anticipated London pop-up, to Porsche's futuristic showroom and a high-end parfumerie from French fas...