Money Down The Drain?

A new report by management consulting firm A.T. Kearney found that in 2015, there were more than 100 new fragrance launches and brand extensions, backed by significant media and promotions, however, there has been little change among the top fragrance brands.  In fact, four out of the top five women's fragrances in 2015 held the same spot as in 2010, according to the Chicago-based firm.
 
Fragrance brands and retailers make significant marketing investments, but much of this spending is wasted, according to the firm which contends its new report provides recommendations on how fragrance marketers can deliver a more targeted marketing approach that is more efficient and delivers results.
 
In a survey of prestige fragrance sector shoppers, the study found that one-third of fragrance purchasers are loyal to an existing brand—34% of in-store shoppers say their last purchase was to replenish their favorite fragrance.
 
The survey also found that another one-third of survey respondents also purchase fragrances on an impulse or as a gift, suggesting that there are opportunities to influence consumers' decisions at the point of sale.
 
When asked what motivated their latest in-store purchase, 21% of shoppers point to a product trial, either in the form of in-store testing and sampling or a magazine insert.
 
“Fragrance manufacturers are stuck in an expensive marketing cycle that rarely turns brands into new best sellers,” noted Hana Ben-Shabat, A.T. Kearney partner and co-author of the report. “There are opportunities for marketers to optimize these investments by better understanding what resonates with shoppers.”
 
Despite the large share of the fragrance marketing budget spent on point-of-sale materials, training and staffing of retail sales specialists, and sampling, the survey found that fragrance shoppers find more value in promotions, discounts, gifts with purchase, and customer service provided by beauty advisors. The latter play an important role as every sixth respondent points to a sales associate when asked why they switched to another fragrance product or make an incremental purchase, noted A.T. Kearney.
 
With regard to marketing programs, fragrance shoppers are most heavily influenced by promotions and discounts. In response to the question, “To what degree did in-store factors influence your purchase decision?,” promotion and discount received the highest score for “Influenced me strongly” at 32%, followed by service (25%), free gifts (20%), samples in-store (22%), spritzers (12%), and POP ads or materials (12%).
 
The study found that a significant portion of point-of-purchase (POP) advertising is wasted. As many as two-thirds of shoppers do not notice in-store advertising or are not influenced by it—some even consider it unpleasant, according to the company.
 
Samples represent the most alarming waste, considering the effort and cost of producing them and of hiring, training, and managing retail sales specialists, according to A.T. Kearney. Less than one in two samples (45 percent) given out in stores leads to a purchase.
 
The “Dollars and Scents: Winning in Fragrances” study is based on an online survey of 844 shoppers 18 years of age and older (72% women and 28% men). Respondents talked about what draws them to perfume counters, what keeps them buying fragrances, and how they feel about buying fragrances online. The report identifies steps that perfume brands and retailers can take to enhance the consumer experience while maximizing their return on marketing investment.