A charged up fragrance business has stepped into 2021 with an inspired attitude.
“We see a tremendous acceleration of fragrance in general,” said Stéphane de La Faverie, group president of Estée Lauder Cos. Inc. “It’s not only a U.S. phenomenon, it’s global,” with growing markets in China, Russia and the Middle East.
As for the U.S., the prestige fragrance business was up 2 percent for the third quarter of 2020, according to NPD.
In the key month of December, fragrance sales increased by 3 percent in the U.S., while skin care dropped by 9 percent and makeup plunged by 32 percent, according to preliminary figures.
Sales were driven largely by high value products — with heavier concentrations of juice — leading the way. Eau de parfum versions moved better than less expensive eau de toilettes, and the new and the novel also resonated. The apparent taste for a little bit of luxury was matched by desire for comfort, as home fragrances sold well.
“Anything with a higher concentration of fragrance oil has been doing very well and driving growth,” said Larissa Jensen, vice president and beauty industry adviser at NPD.
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Since April, when the COVID-19 clampdown trapped fragrance sales in a deep, minus 68 percent crater, the business rebounded, month by month. By September, sales volume showed a 5 percent monthly gain.
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Fragrance continues to be one of Macy’s strongest businesses, outpacing both skin care and makeup, according to Julie Walsh, divisional business manager for fragrance. The spring lineup of launches includes entries from Versace, Jimmy Choo, Kate Spade and Gucci, among others.
Megan Grant, president of the Luxe Division of L’Oréal USA, noted, that what was “most unexpected” was fragrance’s ability to “make the rebound the quickest.”
The Luxe Division scored a December fragrance gain nearly 2 percent higher than the market increase, boosting it toward 5 percent.
Just as important, there seems to be a shift happening in consumer buying habits. After years of hearing that fragrance can’t be sold online, some executives have noted a cracking of the smell barrier.
During the pandemic, many have pivoted launches to the web. L’Oréal Luxe launched Giorgio Armani My Way women’s fragrance both online and off. Usually the digital penetration of a fragrance is 14 to 15 percent of sales. For My Way, it was 30 percent.
“The discoverability and even the propensity to purchase online was much stronger,” Grant said.
“The way that we brought the fragrance to life online was also very different in terms of really ingredients, the in-real-life imagery of how consumers are using the fragrance, different types of close ups on the bottle.”
Grant also pointed to “a really big evolution in terms of how consumers are digesting the fragrance category and understanding the fragrance elements (online),” adding that L’Oréal is striving to improve content and tools of engagement. The company has experiment with TikTok and influencers, such as with its new Valentino Voce Viva scent.
There also has been an uptick in demand for juices, heavy and light, novel and new. “We saw very intense fragrances doing exceptionally well during the second half of the year, and especially in the fourth quarter with brands like YSL Libre. L’Oréal also registered success with lighter scents like Atelier Cologne’s number one juice California Clementine,” Grant said.
De La Faverie sees several consumer trends in the works, led by a conversion of the luxury high-touch selling model that fired in-store retailing.
“When you used to go to a store with a brand like Kilian Paris or Jo Malone London, you had a tremendous level of experience with storytelling — with the tone of voice, sampling, demonstration,” he said. “We had to move all of that from the store to online.”
De La Faverie said online sales are showing high-double-digit growth, driven by discovery. “It is no longer just for replenishment,” he said. “People are discovering first time fragrances online. We have put a lot of things in to enable that.”
One move was to reinvent sampling by selling small sizes of scents for a low price. The cost can then be applied to the purchase of a larger size.
Environmental fragrance has also seen a boom, powered by consumers looking for a sense of comfort.
“We are putting a lot of innovation on this area of candles, bath and body, body oil, some diffusers — all of these things that accelerated tremendously,” de La Faverie said. “When you combine the idea of home being a safe haven and add the ability to move luxury fragrance high touch from a store to online, you have the perfect equation to accelerate fragrance and engage more consumers.”
De La Faverie believes the momentum is here to stay, sentiments shared by Ulta Beauty. “Candles are on fire,” joked Monica Arnaudo, chief merchandising officer. “Fragrance is a feel good category,” she continued, noting the momentum of brands like HomeWorx and Nest. “We definitely see it as a category of self care and people using fragrance to pamper themselves and feel good,” Arnaudo said.
Home scent also has been a strong performer at Coty, along with the company’s deep portfolio of designer and classic fragrances. Next month, the company will launch Marc Jacob’s Perfect fragrance in China, capitalizing on its number-one position as the top launch for 2020 in the U.S. and the U.K., said Isabelle Bonfanti, Coty’s chief commercial officer, luxury.
“The luxury market is booming,” said Bonfanti, adding that Coty outpaced the market last year.
Looking into 2021, she noted that a number of companies had held back on launches last year, and as a result, the second half of the year is expected to be particularly robust.
Bonfanti stressed that Coty will be on the hunt for innovation, particularly new materials that can yield products for emerging categories like clean fragrances.
“Clean beauty today is about meeting the consumer desire for minimalist formulas and more transparency,” she said. “We can use those natural ingredients. Last year, we got a Cradle to Cradle Product Innovation Institute Award for Ck Everyone.
“We are going to look at our portfolio,” she continued. “What you want is to find a way to create new fragrances with clean ingredients — with renewable ingredients — that bring something new to the market. It is also important that you get the quality of the smell by exploiting (these) new ingredients.”
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