7 Key Issues Affecting the Success of the Fine Fragrance Sector
It’s 24 years since I published the first Premium Market Report. During that time, the premium beauty industry has experienced huge changes.
Changes that are being driven by increased access to products and information and greater choice.
Back in the 90s, when we started out, brands were sold mainly from department stores and glass cabinets. The in-store consultants were the experts and helped shoppers make their selections.
It’s a world away from the way consumers now shop and interact.
With beauty products sold on every major high street and accessible from any mobile device and computer, premium beauty really has become a 24/7 industry.
To ensure you can respond to these changes, we’re producing a series of 4 Premium Market Reports offering a deep dive into key product categories and the important issues facing the premium beauty industry today.
The Fine Fragrance Report is the first in the series.
We want to bring you more detail on the ups and downs, opportunities and risks facing fragrance brands, distributors and retailers. So for the first time, we have conducted exclusive research into consumers’ attitudes, aspirations and buying behaviour.
Let’s look at some of the key issues tackled in the report:
2015 can best be described as lacklustre to say the least. Brands and retailers have continued to struggle to motivate consumers to shop throughout the year for fragrance.
Over half of sales took place in the Christmas period, a significant proportion on discount, which has eaten into margins.
The Internet has yet to impact heavily on fine fragrance, but this sector is growing five times the rate of traditional retail. This upward trend is set to continue with Millennials accounting for much of the growth online. It's now down to brands to up their online game if they are to engage this growing community of buyers.
Over the past decade, we have repeatedly stated that there are too many fragrance launches. Despite this, the number of new launches in 2015 increased to unprecedented numbers and once again failed to energise the market. Frenetic launch activity is the lazy brand’s way to get noticed and it’s time this changed.
Mergers and acquisitions have escalated over the past 18 months and signifies a massive change in the way that the multinationals want to do business. Not content with just launching under their own brand names, they are seeking out successful niche brands that can add value to their fragrance offer.
The Niche Opportunity
With all eyes on the next big thing in fragrance, the niche market and its potential for innovation will continue to be an object of focus for the whole industry. But it’s not all rosy for niche brands. Many are falling into the same trap that affects mainstream brands.
Celebrity partnerships continue to be a force to be reckoned with. But it’s no longer only about movie stars, recording artists and reality TV wannabes. A new style of celebrity is making their mark on fragrance, pushing celebrity fragrance up market and making it more credible for many.
Bespoke is a big trend right now in many consumer markets, but hasn’t really touched fragrance. Tailor-made fragrance is beyond the reach of most consumers, but our research suggests that many are deeply dissatisfied with what is on sale in the shops.
What's Next for the Fine Fragrance Sector
If 2015 has proved anything, it's when you continue to do what you've always done, you don't get what you've always got. You get less.
Without innovation and the will to change their approach, fragrance brands will likely continue to struggle and experience further decline.
The good news is that this is an industry that is ripe with opportunity. One that has the potential for growth in many areas.
To find out how you could take advantage of these opportunities, check out The Fine Fragrance report when it launches on Monday April 4th.
You can get a more detailed overview of what's in the report here.