Panelists on hand to decipher the code included Ann Gottlieb, president, Ann Gottlieb Associates, Inc., Karen Grant, vice president and global beauty Industry Analyst, The NPD Group, and Catherine Walsh, senior vice president, American Fragrances, Coty Prestige. Each provided insight into the economic realities and perceptual relativity surrounding the current market for fragrance. Grant noted that current statistics from NPD found that while 8 out of 10 women continue to use fragrance, one of the greatest challenges that face consumers today is pricing, adding that sales for the holiday season were down 10-11%.
“Usage is seeing a decline in the number of people using fragrance as well as the number of times it is being used. A certain sameness to fragrance has impacted the performance of fragrance in the marketplace and differentiation is key,” Grant said.
Although there were more than 200 fragrance launches this year, classic fragrances continue to be loved by women, and newer fragrances are facing more challenges.
Grant noted, “A new launch now typically will be off counter in 12 months,” adding that while gift sets are adding appeal, the holiday season is very important, as 20% of the entire year’s sales occur before the holiday.
Catherine Walsh, Ann Gottlieb and Karen Grant provided insight on fine fragrance.
Perspective and Differentiation
Clearly, perspective comes in observing cultural preferences and differentiation, changing research and development schedules and expectations, and expanding views of the marketplace and its diverse consumer.
Ann Gottlieb said, “It is incumbent upon us to figure out why customers are leaving us. For the American market it seems we’ve forgotten to some degree the importance of fragrance, and that it inspires us and should be as beautiful as it can be.” Gottlieb continued, “I also think we’ve abandoned an important part of the market by targeting a younger demographic. Olfactively, there are subliminal reasons why fragrances will be bought. We need to return to when fragrances made women feel feminine and sexy.”
Responding to evidence of growth in niche and high end fragrances, Gottlieb observed that whether the more expensive high end scent, or the appeal of niche to younger customers, interest comes from the fact that these fragrances are not seen everywhere.
“In addition, both quality and holistic packaging are important issues. We are seeing a move back to brands that are part of our heritage; perhaps this will eliminate some of the flankers,” she said. Gottlieb added that market research and upfront testing also contribute to learning more about the consumer and customer’s purchasing behavior.
Catherine Walsh, Coty, said, “If you look at the market in terms of the global picture, the market is not down, although in the U.S. it is down by 10-12%. When you look away from the U.S., some markets are not affected. Australian business is up 2-3%; China is up 2-10%; the UK is still strong, and Germany is as well. Southern Europe is not in great shape, so the market really is all over the place.”
Walsh said that the classics remain strong, citing Chanel, Dior, Armani, Calvin Klein and Hugo Boss in the top five. “D&G had over 30% share last year, and Aqua di Gio, Coco and J’Adore are still strong. If you’re a powerhouse like that you have the ability to stay strong,” she said.
Walsh noted two distinguishing factors—a complementary beauty business and outstanding packaging—among currently successful lines.
“Out of the top five, three have cosmetic lines. Beauty helps fragrance,” she said. “The second thing that’s working is packaging innovation. Bold creativity is working and we’ve seen it with Lola and Ed Hardy. If there is something out there that is absolutely delightful, you want to pick it up,” she said, noting that Coty’s Harajuku Lovers continues to excite retailers. Its newest iteration includes the Harajuku girls in their winter garb, off on a skiing trip. “This kind of innovation helps gain undisputed visibility in the store,” she added.
Know Your Brand
Walsh provided three points to keep in mind, with the first and most important being, “Know thyself and know your brand and its values. Second, Know your audience and take olfactive consideration of your audience. Third, Let it rip, with creativity. You have to bring out the absolutely best product you can.”
She addressed the holiday focus, saying, “We have multiple brands to focus on for holiday, including new brands, Lola and Ck Free, as well as Euphoria. For holiday, we’re trying to be less promotional and are concentrating on quality. It has to knock you out and be the best product it can be.”
In response to audience queries about fragrance creation, Gottlieb noted, “The most important driver is the fragrance itself. The trick is how to touch the consumer. Since there is globalization, fragrances now have to do triple duty in different parts of the world.” Answering a point made from the audience on the enduring Angel fragrance, Gottlieb said, “Times have changed and we don’t have 12 years to work on a fragrance. We need to create something from a business standpoint that also resonates emotionally.” She highlighted differences in consumer response to fragrance, saying, “In France women respect fragrance, and in the US it is different.” Walsh concurred, “I don’t think we’re ever going back to the Angel model. We don’t have that time. Every designer ships 8-10 collections now. Everywhere you look now, it’s all about more, not only in the fragrance industry.”
Grant concluded that the number one driver for buying a fragrance now is the consumer interaction with the fragrance. “People are spending where they feel it is meaningful to them. Shopping is not always predictable, as any woman can tell you. It takes an emotional aspect to tie in with the consumer.”
Additional information may be found at: www.cew.org.