Online Exclusives

A Grim Holiday Ahead?

By Nancy Jeffries, Correspondent | November 24, 2009

Foundation panel looks at what it will take to win consumers in the years ahead.

The economic future of the industry received a sobering update on November 19, 2009, when an expert panel, presented by The Fragrance Foundation at New York’s Harvard Club, gave attendees serious pause for thought at the organization’s annual State of the Industry luncheon.


Rochelle Bloom, president of The Fragrance Foundation, got the discussion underway with upbeat news of the new Fragrance Foundation advertising campaign, One Mighty Drop, designed to revitalize the fragrance market and bring new excitement to the category. More information is available at: www.onemightydrop.com.


However, the input of the distinguished panel put the current state of the economy into perspective, as a discussion focused on unemployment statistics, cost-cutting by retailers, and a future filled with more than a few twists and turns, resonated throughout the presentation. Deirdre Bolton, anchor, Bloomberg Television, introduced the panelists saying, “Everyone wants to know if the worst is over,” noting that after the first quarter of 2010 there might be some light at the end of the tunnel. Panelists, including Susan Babinsky, senior vice president, consumer products, Kline Management Consulting & Marketing Research Group, Ken Goldstein, economist, The Conference Board, and Wendy Liebmann, founder and president, WSL Strategic Retail, addressed the query.

Babinsky noted, “The new normal is redefining relevance in the fragrance industry. The consumer is key and if a brand is not relevant in the industry, you’re facing great challenges.”
 
Presenters at State of the Industry discussion, left to right, front row, Wendy Liebmann, founder and president of WSL Strategic Retail, Deirdre Bolton, panel moderator and anchor, Bloomberg Television; back row, left to right, Susan Babinsky, senior vice president, consumer products, Kline Management Consulting & Marketing Research Group, Ken Goldstein, economist, The Conference Board, and Rochelle Bloom, president, The Fragrance Foundation.ad.
Adding that the fragrance business, at the $5 billion mark, is a big business that has been suffering through declining sales, Babinsky said, “There have been four consecutive years of negative sales growth, so that is not good news. The consumer will definitely be spending more carefully during the holiday season.”


She explained that the areas that continue to be strong are the classics, like Chanel No. 5 and Ralph Lauren, as well as special new players, like Harajuku Lovers and the Ed Hardy line, with its colorful tattoo art packaging. “


These examples attract new users to the market,” she said, adding, “Of course, value works in a down market as well.”


She cited gifts with purchase (GWP) and free shipping, gift sets, and great values at the right price points, to be vibrant in the market.


Babinsky highlighted the role of naturals in the market, citing Givaudan’s Innovative Naturals, to enrich perfumers’ palettes, as well as customization, making purchases relevant and personal, and experiential fragrances, which tell a personal story in fragrance.


“Fragrance could take better advantage of technology, like Lauder’s ‘Let’s Play Makeover’ tool, and the I-Aroma fragrance device, which enables fragrance sampling prior to purchase. Social media also allows the consumer to connect and encourages more interaction,” she said, adding that it was important to look at interesting business models in any industry that encourage proactivity.


Goldstein noted that the consumer wanted to know when the recession would start feeling like it’s over.


“Strong recovery will be slow going, possibly 24 to 36 months down the road. This recession, the worst we’ve had in more than 50 years, has resulted in a fundamentally changed world. A year from now we’ll still have an unemployment rate of 10%. That, combined with demographic change, is why you see consumer confidence so low. We’re moving to being a more saving consumer for the next 5, 10, or 15 years, and money not spent means consumption won’t grow. Relatively depressed spending, since there’s not enough money coming in, means something has to come off the drawing board,” said Goldstein.


He noted that lowered expectations need to be managed and the struggle continues to impact all sectors, including households and businesses.


Liebmann suggested that rather than advising a reset during this recession, as Jeffrey Immelt, CEO of GE had advised, she said the economic situation required a reboot.


"Sometimes you lose things. Sometimes things are saved. That’s what happens when you reboot. What will stick? What will go away? Assume it’s forever and you’ll be safer going forward,” she said.


The results of a recent WSL survey she cited revealed that 80% of women don’t want to shop for anything they don’t need and only 15% said they would go back to spending as soon as they could.


“In reality, keep need in mind as we move through this. Need changes,” said Liebmann.


She explained that 85% of survey respondents don’t want to get into debt.


“They are content spending less and have become used to spending less. When the economy gets better or you feel more comfortable spending, what will you spend on? It’s more about experiences than stuff,” Liebmann said, noting that the top five desired activities are experiential, including vacation, entertainment, clothing, salon services and eating out.


“The notion of experiences rather than stuff is a clue. Where does fragrance fit in? Most women surveyed said they were satisfied to spend less on fragrance even if they could afford to spend more,” she added. This is where the notion of value becomes integral to determining what is a real value today, in a world that has become so commercialized and commoditized.


“If fragrance is all about experience, not just liquid in a bottle, we in this room need to be delivering that experience for fragrance and everything else. Whether it’s the cosmetic floor at Bloomingdale’s or Duane Reade’s new upscale cosmetic and fragrance areas, experiences are key, from mass to specialty to prestige,” said Liebmann. “Especially for the newly-transformed shopper, we need to deliver the real value of fragrance and let consumers know that the experience of fragrance is more than just liquid in a bottle.”


Additional information about The Fragrance Foundation and the new advertising campaign may be found at: www.fragrance.org.

Related End-User Markets:

Related Raw Materials:

blog comments powered by Disqus
  • I Want It All

    I Want It All

    Melissa Meisel , Associate Editor||May 2, 2016
    Skin care moves beyond the basics with pampering formulations with unique components and novel functions.

  • Wacker Builds on Its Success

    Wacker Builds on Its Success

    Tom Branna, Editorial Director ||May 2, 2016
    The silicone maker had a good 2015 and expects the gains to continue in 2016, driven, in part, by success in the Americas and

  • That’s Awesome!

    That’s Awesome!

    May 2, 2016
    Extracts & Ingredients highlights the newest ideas in efficacious oils for the personal care market.

  • At a Loss for Curls?

    April 22, 2016
    Amplixin, a Miami-based maker of hair strengthening products, has a solution for hair loss.

  • Why Look Good, When You Can Look Perfect?

    Why Look Good, When You Can Look Perfect?

    Tom Branna, Editorial Director||April 4, 2016
    A new way to try-before-you buy is capturing the attention of consumers and the beauty industry.

  • NYSCC Explores Product Innovation

    NYSCC Explores Product Innovation

    Christine Esposito, Associate Editor||March 14, 2016
    New product development, formulation expertise and proper preservation are topics of discussion at February monthly meeting.

  • Texture on the Runway

    Nancy Jeffries, Contributing Editor||February 22, 2016
    Au Naturale by Dark and Lovely, Cantu, Creme of Nature, Design Essentials and Garnier create head-turning hairstyles.

  • Buy the Sea, Buy the Sea, Buy the Beautiful Sea

    Buy the Sea, Buy the Sea, Buy the Beautiful Sea

    Tom Branna, Editorial Director||February 9, 2016
    Nova Scotia Fisherman makes a boatload of products that contain sea kelp and a raft of natural ingredients.

  • What

    What's on Tap for 2016?

    Nancy Jeffries, Contributing Editor||February 8, 2016
    CEW and NPD present their beauty industry review and preview.

  • From Research to Retail

    Tom Branna, Editorial Director||February 1, 2016
    What began as research on skin disorders led a dermatologist and his father to create their own skin care formulas.

  • 5 Things I Learned

    5 Things I Learned

    January 15, 2016
    The Avon & Women’s Dermatologic Society Mentorship Program. Dr. Sabrina Fabi (left) and Dr. Kimberly Jerdan.

  • Perfect Timing

    Perfect Timing

    Tom Branna, Editorial Director||January 11, 2016
    New ways of collecting data can help cosmetics companies understand what women really want—and when they want it.

  • When a Cosmetic Becomes a Drug

    When a Cosmetic Becomes a Drug

    Jacqueline Sheridan, Dinsmore & Shohl LLP||January 11, 2016
    The unintentional conversion of personal care products through marketing.

  • Africa, Rising

    Africa, Rising

    December 14, 2015
    Savvy marketers should expand their operations on the continent, according to speakers at a WFFC seminar.

  • Color, Your World

    Color, Your World

    December 7, 2015
    A kaleidoscope of concepts was the conversation at a recent NYSCC symposium.

  • Play Misty for Me

    Play Misty for Me

    Christine Esposito, Associate Editor||November 30, 2015
    Body mists for men and women continue to be the hottest commodities in the mass fragrance market.

  • Hitting a Wall(mart)

    Hitting a Wall(mart)

    November 9, 2015
    Walmart imposes slotting fees and that hurts a lot of Tier 2 and 3 FMCG companies.

  • That’s Quite an Achievement!

    That’s Quite an Achievement!

    Nancy Jeffries, Contributing Editor||November 2, 2015
    The CEW honors seven beauty industry leaders.

  • A Suite Deal

    A Suite Deal

    October 12, 2015
    Image Studios provides an innovative venue for beauty professionals seeking a new way to do business.

  • What’s All the ‘Fuzz’ About?

    What’s All the ‘Fuzz’ About?

    Jeremy Kerstetter, Assistant Editor||September 28, 2015
    Lawyer presents the power and versatility of essential oils by adding them to her own handmade dryer balls.

  • A New Kind of Hero

    A New Kind of Hero

    Tom Branna, Editorial Director||September 14, 2015
    An upstart household product company puts a new spin on the idea of home cleaning.

  • A Panoramic View

    A Panoramic View

    Jeremy Kerstetter, Assistant Editor||September 7, 2015
    ZSS takes a 360° approach to skin health.

  • It

    It's All in the Delivery

    Jeremy Kerstetter, Associate Editor||August 31, 2015
    AlureVé relies on pharmaceutical technology for its anti-aging skin care line.

  • A Brand of Its Own

    A Brand of Its Own

    Christine Esposito, Associate Editor||August 24, 2015
    Amyris creates its own skin care solution for consumers.

  • Eye on Korea

    Eye on Korea

    August 17, 2015
    At the Personal Care Conference in Shanghai there was distinct emphasis on beauty ideas from Korea.

  • No Coasting Here

    No Coasting Here

    August 12, 2015
    A Q&A with Coast Southwest CEO Joseph Cimo.

  • Scoring Big with Women’s Soccer

    Scoring Big with Women’s Soccer

    Christine Esposito, Associate Editor||July 8, 2015
    Carli Lloyd and crew have star power—but will any beauty firm be smart enough sign these soccer stars? Take our poll now.

  • Lux in Flux

    Lux in Flux

    Tom Branna, Editorial Director||July 6, 2015
    FIT graduates detail the changes impacting the global cosmetics industry.