Cosmetics Business reveals the 5 latest fragrance trends in new report

Fragrance has been hit hard by the Covid-19 outbreak. This report reveals how digital transformation and re-evaluation of product could prepare the category for the future

Report introduction: At a glance

What's in this report?

Introduction

Top 5 insights:

1. Next stage strategies

2. Home fragrance

3. Multifunctional scents

4. Online opportunities

5. Notes for a new world

Country highlights

Outlook



Global value & growth, 2019

Total fragrances market. Source: Euromonitor International


Key market challenges addressed

From disrupted supply chains to retail closures, the Covid-19 outbreak has created many challenges across the beauty industry, but fragrance has been one of the hardest hit.

According to Mintel Senior Beauty and Personal Care Analyst Samantha Dover, a “particularly slow recovery” is forecast for the category.

As people focused on their health and basic necessities during lockdown and away from products deemed non-essential, fragrances became low priority and usage and purchase of these products fell as a result.

The category has, in addition, suffered due to its reliance on travel retail. Hans Holger Gliewe, Chairman of The International Fragrance Association (IFRA) explains: “Fine fragrance sales are badly affected by the dramatic reduction in air travel, store closures, less social interaction and consumers’ personal financial concerns.”

“We all foresee a decrease in sales in 2020, especially in the fine fragrance segment,” adds Laurent Mercier, CEO of Eurofragrance. “Many countries are sitting on huge stocks. Many brands do not have a strong e-commerce (website or social platforms) and therefore are now lagging behind.

"This is changing the industry’s mind and speeding up digital transformation.” According to Dover, one of the biggest challenges the category faces in a post-Covid-19 world is the difficulty in selling fragrance online. But this is key to the recovery of fragrance sales and an opportunity to shape the category towards a more resilient future.


Fragrance: Top 5 countries by size, 2019

Source: Euromonitor International


“Fragrance already showed signs of fatigue before the pandemic,” says Sandrine Perraud, Global Director, Fragrance at Beautystreams.

“The meaning and very reason of its existence have been challenged for quite a while and fragrance is experiencing a Simon Sinek moment: what is the ‘why’ of fragrance, what does it do for me?”

Consumers’ desire for values such as depth, sincerity and ethics can be reflected by a closer link to the holistic creative context of the category, to the craftsmanship and artistic expression of fragrance creation, she says.

Against a backdrop of conscious consumption, brand purpose becomes a critical purchase credential and the push towards sustainability, transparency and social purpose represent ongoing challenges and opportunities for the category.

Gliewe says: “The pandemic and the ‘lockdowns’ have perhaps taught us all some lessons about the value of our environment, the importance of reducing waste, and considering the necessity of all our actions – something that will then translate into how we do business in a more transformative way.”

Fragrance: Overview

The global pandemic is accelerating trends and wider developments across the beauty industry, and within fragrance, the unprecedented change it has brought to the category will reshape it significantly, from the way fragrances are marketed and sold to the kind of NPD that appeals to consumers.

With travel retail representing up to 20% of the fragrance business (source: ROSAE), and online penetration only accounting for about 6% of retail (source: Phlur), many of the big fragrance brands have been affected in a significant way.

“The year will definitely not be saved by the second half. Even though the signs from China have been good, it will not be possible to recover what has been lost in the space of three to four months,” says Olivier Aron, founder of perfume and beauty research consultancy ROSAE.

“I would project around a 20% loss for the brand companies, but it all depends on the recovery of the travel business. If the restrictions are lifted everywhere, there might be a chance.”

But even as bricks-and-mortar stores reopen and people begin to travel again, the change in the way the fragrance industry has been doing business while shops were closed is set to have an ongoing impact.

Fabio Bernardini, CEO of travel retail consultancy TW.O & Partners says, “More and more shoppers have moved online, and we have seen plenty of fragrance brands take advantage of tools such as social media to engage shoppers with their brand and with new scents.

"I believe digital is an opportunity which brands – and retailers – cannot afford to miss out on today.”

The online shift

Chris Pickthall, CEO of fragrance house CPL Aromas adds: “The move to digital sales was forced on brands and retailers, and I think most are pleased with the results.

"This can lead to a big shift in how fragrances are sold and how fragrance brands can rebuild the category. All will be wondering why they have expensive shops when consumers have got used to buying fragrances online, and brands have the opportunity to make these sales that much more profitable.”

Although fragrance is notoriously difficult to experience in the digital world, more brands have focused on bringing scents to life through social media. Lance Patterson, CEO of Penhaligon’s tells Cosmetics Business: “We have increased our focus on IG Live and IGTV over these past months.

"IG live and IGTV allow us to keep engaged with our community, educate our fans on our fragrant adventures and hopefully entertain them too.”

The brand has run a series of videos including including The Language of Flowers, Notes on Citrus and Scents for Gents.

Jo Malone London is running a Fragrance Discovery and Marbling Masterclass Zoom event this month for consumers to discover its signature fragrances.

Ticket holders are sent vials of five fragrances prior to the session, and during the event also learn how to marble their own notecards using colours inspired by the brand's scents.

Retailers including The Perfume Shop and The Fragrance Shop have also introduced services that enable customers to try fragrances without committing to purchases.

Sanjay Vadera, CEO of The Fragrance Shop says that with its Try It First service, “our customers appear to be shopping more confidently, helping us maintain our online growth – consistently trading at over 300% year on year.

"We’re also set to launch our Fragrance Fittings initiative soon, enabling customers to find their fragrance based on expertly curated questions about themselves or whomever they’re gifting for, offering another engaging way into purchasing fragrance online.”

The Perfume Shop believes that delivering a seamless omni-channel retail experience will continue to be extremely important and is launching a new app to make shopping online faster and hassle-free.

What is the next step for AI in perfumery?

Postponed launches

New launches are relied on by the fragrance business to drive growth, and the start of 2020 saw some promising developments, including Coach Dreams, which boosted brand sales by 35.9% for the quarter ending 31 March, benefitting Inter Parfums’ US and Western Europe markets.

The fragrance company has however postponed its launches of Kate Spade New York, Jimmy Choo I Want Choo and Montblanc Signature, until next year.

“Many launches have been postponed to 2021,” says Mathilde Lion, Director of Beauty Europe at The NPD Group. “This is a key challenge today and it will also have an impact on communication which may not help for the rest of the year.”

According to Lion, the number of new prestige fragrance launches that were purchased during the month of April across Western Europe’s big five countries were half that of April 2019.

“This means that launches performed even lower than that of total fragrance purchases by four percentage points. As stores were not open, new launches could not be promoted to consumers.”


The top 10 most searched perfumes, Q1 2020

Source: Cosmetify


As footfall continues to be reduced in physical stores both in domestic and travel retail, there are now questions over how new fragrances may be launched successfully over the coming months. Will the industry need to reinvent the way that new launches are discovered by consumers?

“[New scents’] success may be sealed in a brand’s ability to lead the digital conversation,” says Amanda Morgan, UK Managing Director of fragrance brand Diptyque.

“With the [consumer] pushed into digital habits and online community more important than ever, brand identity and equity within a digital landscape is now a hugely valuable intangible asset,” she adds.

Enhancing the online customer experience, by emphasising the stories and ingredients of perfume alongside methods for sampling and trying fragrances if the customers are not physically visiting stores will be key, says Morgan.


“Brand identity and equity within a digital landscape is now a hugely valuable intangible asset" - Amanda Morgan, UK Managing Director, Diptyque


“There must be a shift in how fragrances are sampled,” adds Pickthall. “In store, there will be new techniques used involving less touching and strips but online is still a challenge.

"I see a trend for far more samples, paid samples, where consumers can spend a small amount of money buying samples of many launches that will be redeemed against future purchases.”

Product inspiration

Faced with the recession and more challenging times ahead, fragrance brands will also need to find new ways to pique consumer interest and drive demand, says Mintel.

Senior Beauty and Personal Care Analyst Samantha Dover says: “Faced with less disposable income to spend on beauty, there is a risk that consumers will become less experimental, and will stick to fragrances that they know and trust.

"However, there will be a heightened demand for beauty products that offer more. With this in mind, products that claim to offer emotive and wellbeing benefits will resonate, as will fragrance products that that have multifunctional uses and blur the lines between other beauty categories, such as hair care and body care, whilst eco-friendly and ethical claims will add further value to products in the eye of the consumer.”

As people spend more time at home, home fragrance will also continue to be important. Sandrine Perraud, Global Director, Fragrance at Beautystreams says: “This is the opportunity to multiply fragrance usage occasions and key magic moments where scent is experienced in an emotional and intimate way.”

Cathy Newman, Marketing and Customer Experience Director of The Perfume Shop adds: “As customers feel the pinch we predict we’ll see people look at more affordable ways to enjoy scent.”

There may be more scope within body mists, for example, which have already gained momentum in recent years, with popular brands including So...? and Victoria’s Secret.

The fragrance industry was already experiencing low, if not flat levels of growth, and the damage resulting from the Covid-19 crisis will be significant.

“It will be a challenging year in which some categories will be reinforced, and others will face more difficulties,” says Laurent Mercier, CEO of Eurofragrance.

“A lot of products will disappear because they will not respond to this very precise need consumers have today. But many other types of products will arise and respond to people’s needs,” he adds.

“Companies must be smart and open for change. Traditional ideas and ways of doing things must be challenged every day.”


The crisis has accelerated the consumer shift from offline to online. Developing digital engagement and commerce will now be vital for the future of the industry.

To find new ways to pique consumer interest, fragrance brands can move into adjacent categories. Not only does this reduce a brand’s reliance on any one category, it also increases the number of touch points through which a consumer can buy into and experience a brand.Samantha Dover, Senior Beauty and Personal Care Analyst, Mintel


Top,  Home fragrance,  Multifunctional scents,  >Online opportunities,  Notes for a new world,  Country highlights,  Outlook

Trend 1: Next stage strategies

From the way new launches will be discovered, to the drivers behind consumers’ perfume purchases, the fragrance industry is dealing with a new landscape that requires many players to adapt their approach.

One of the obvious pain points right now, beyond the reduced footfall in stores, is the challenge arising from the altered retail experience that consumers are returning to.

There will be a particular issue around attracting new customers, says Fabio Bernardini, CEO of travel retail consultancy TW.O & Partners.

“The engagement required to introduce shoppers to a new brand will be difficult with the social distancing rules and shoppers’ apparent unwillingness to interact with staff, so they will need to have the brand at the forefront of their mind on arrival.

"This will be particularly key for fragrance brands, since sampling will probably be a more difficult process once travel retail stores reopen. This means shoppers will be less likely to randomly try something they do not know on arrival.”

The efforts of staff and brands in the shop will become even more vital, says Bernardini.

“Contact time and engagement opportunities in-store will be reduced and staff will need training on how to best engage and communicate with potential customers.”

Engage consumers digitally

The key today will be to use digital engagement to introduce new fragrances and build brand awareness before customers even set foot in a store.

“More and more shoppers have moved online, and we have seen plenty of fragrance brands take advantage of tools such as social media to engage shoppers with their brand and with new scents,” says Bernardini.

Experimental Perfume Club, for example, hosted live sessions on Instagram every Friday during lockdown with founder Emmanuelle Moeglin, covering a different topic every week in order to educate consumers.

A multi-channel reach

Running brand activations across multiple channels instead of focusing on specific social networks will be important to reach a more diverse set of consumers.

Sampling will also need to become more integrated across different channels. Online product sampling company SoPost has recently launched a new solution with Hearst that unlocks publisher websites as a new way to sample.

It has also started rolling out smart filtering technology across its campaigns to allow brands to reach a greater number of consumers and ensure that they are matched with the most appropriate experience – whether that be a deluxe physical sample or a digital-only experience.

Jonny Grubin, founder and CEO of SoPost explains: “It means that brands can talk to a higher number of consumers, but preserve testers for those more likely to convert.”

Subscription-based models will likely grow for sampling too. According to Laurent Mercier, CEO of Eurofragrance these models “enhance a pull scented experience, empowering consumers through education.

Many high-end brands are testing it with positive results thus far.” Online perfume subscription service Sniph, for example, partners with brands including Etat Libre d’Orange, Miller Harris and Sana Jardin.

In-store testing is another key element of the business that will be reinvented with Covid-secure measures in mind. New technological solutions that will enable fragrances to be smelled in a different, safer way are already being developed.

“A growing number of touchless devices are being created and some of them offer or mix many concepts like safe smelling, layering, and/or data/AI, adding the consumer insights that brands are always craving,” says Mercier.

Perfumes with purpose

Brands will also need to accommodate shifting consumer priorities, some of which will accelerate wider issues that the industry has been facing over the longer term.

Angela Stavrevska, Creative Director UK at CPL Aromas says that the fine fragrance market was starting to see sales fatigue even before Covid, probably due to a saturation of new launches, while the events of 2020 are likely to see consumers appreciating new ideas that resonate much more strongly with themselves, their lifestyles and their beliefs.


“Conscious consumerism is not a new trend, but I think recent events will make it much more pertinent" - Angela Stavrevska, Creative Director, UK, CPL Aromas


“As the lockdowns lift people will start to reacclimatise and slowly go back to a potentially less carefree version of their former selves,” she comments.

“Combining this less carefree future with the aftermath of global race demonstrations also taking place I think people will start to question their purchases much more – how will this product benefit me and my family? Will it be good for me, society and the planet? Do I really need it?

“To answer these questions going forward fine fragrances need to offer much more than just marketing hype. Do they convey added benefits, is their story believable and inspiring, do they have a purpose in today’s society, can they do good?

"Conscious consumerism is not a new trend, but I think recent events will make it much more pertinent and brands with a strong social purpose will be sought after,” adds Stavrevska.

Sustainable scents

Clearly, sustainability will play a central role within this picture. According to findings from SONAR, Wunderman Thompson’s proprietary data tool, 83% of consumers say that, when deciding between brands, they’ll always pick the one with a better sustainability record, and 70% are willing to pay more for products and services that help protect the environment or do not infringe on human rights.

Innovations like Maison Sybarite’s new water-based fine fragrance line are geared towards a health and eco-conscious consumer, being alcohol- and cruelty-free and featuring recyclable packaging made with paper from sustainable forests.

Meanwhile Molton Brown recently launched refillable bottles of its EDP and EDT fragrances, and in August will be launching refillable and reusable versions of its luxury fine liquid hand soaps.

“Ethics are the new status symbol for modern consumers,” explains Emily Safian- Demers, Senior Trends Analyst at Wunderman Thompson Intelligence.

“To connect more deeply with consumers and earn their loyalty, luxury brands should prioritise ethos rather than falling back on brand heritage or legacy.”

Stavrevska adds: “Products need to be thought about carefully and have a good reason to exist.”

Launch highlight: HOC (Histoire Olfactive Collective)


Digital has gone from being an opportunity or challenge to be faced, to becoming the next stage of our industry’s evolution and anyone who does not adapt to incorporate it risks being left behind. Fabio Bernardini, Chief Executive Officer, TW.O & Partners

Consumers are gravitating towards brands that reflect their values; in the age of the ethical consumer, brands are finding that status and branding no longer hold as much sway as purpose and principles. Emily Safian-Demers, Senior Trends Analyst, Wunderman Thompson Intellligence.


Top,  Next stage strategies,  Multifunctional scents,  Online opportunities,  Notes for a new world,  Country highlights,  Outlook

Trend 2: Home fragrance

During the bleakest moments for the fragrance category in recent months, one light that shone through was the demand for home scents.

While prestige fragrance sales plummeted by up to a third or more across many European countries, home fragrance bucked the trend, scoring growth of 3% in the UK and 11% in Germany between January and May 2020 according to The NPD Group.

In the month of March, prestige room fresheners rocketed by 37% and candles by 6%, with consumers trading up to more expensive products as part of a home cocooning ritual.


UK: Top 3 bestselling prestige home fragrance brands

Data runs January-May 2020. Source: The NPD Group


Brands including Diptyque, Jo Malone, This Works, Phlur and D.S. & Durga, among others, have seen a spike in sales of candles and other home fragrance products during the crisis.

“Consumers have relied on home fragrances during Covid and post-Covid in order to create their new ‘zone’, their wellness territory that has helped them to build a relaxing and comforting environment where they feel safe and happy,” explains Elsa Rahal, Marketing Manager of CPL Aromas.

Representing just 1% of total prestige fragrance sales, home fragrance would never have been able to significantly limit the fallout of the crisis on the category as a whole, but in countries such as the UK, where it became the only segment still growing in fragrance, it was a much needed boost for the industry and a positive sign for the future.

Glowing opportunities

Now, home fragrance represents an ongoing opportunity for industry players. Emily Safian- Demers, Senior Trends Analyst at trend forecasting company Wunderman Thompson Intelligence says: “Continued growth in the home fragrance category will likely be informed by what McKinsey calls the ‘homebody economy’, driven by consumer comfort levels.

"The majority of consumers still express reservations about returning to pre-pandemic habits: 80% of Americans are not engaging in out-of-home activities and 17% are waiting to do so until a vaccine is available (source: McKinsey).

"And, importantly, work from home setups don’t seem to be going away anytime soon: Silicon Valley kingpins like Facebook, Twitter and Square have begun planning for permanent remote work structures. As long as the home remains the nexus of daily life, functioning as everything from the boardroom to the yoga studio to the lecture hall, I would expect this trend in home fragrance to continue.”

The category is also ripe for further development in terms of new kinds of product innovation. One area that brands can explore in more depth is its connection to wellness.

Angela Stavrevska, Creative Director UK at CPL Aromas says: “I think this category offers scope for fragrances with added benefits and wellbeing support in the same way as fine fragrance, so we can expect our homes to smell as happy and healthy as we do.”

Moving into wellness

“There is a huge opportunity for brands to take a more holistic approach to home fragrance,” agrees Fiona Glen, Head of Projects at The Red Tree.

“That link in with wellness is really key. People are reading up on wellness, investing time in aromatherapy and everything else that goes with it and there will be a continued customer demand for it.”


“There is a huge opportunity for brands to take a more holistic approach to home fragrance" - Fiona Glen, Head of Projects, The Red Tree


For example This Works’ Love Sleep range offers a series of products designed to enhance levels of relaxation specifically in the bedroom, including a candle, pillow spray, essential oil and roll-on. Positioned as an antidote to digital connectivity, the ylang ylang, frankincense and patchouli-based range is designed to pave the way for better sleep and better relationships.

Home care presents another area that can be further explored. Le Labo is already doing laundry care while Airwick’s new, well-received brand Botanica which includes candles, reed diffusers, room sprays and scented oils features a packaging design that could easily be mistaken for a CBD beauty brand.

“We are starting to see brands come up with almost hybrid household and beauty products, and this is very interesting,” says Glen.

“There is a huge demand for functional fragrances for the home,” adds Clare Varga, Head of Beauty at trend forecasting company WGSN. “As well as candles and diffusers, home tech devices such as Scentee are using pre-programmed functional fragrances to alter or enhance mood.

"Invigorating scents to wake up to, cognitive-enhancing scents when working and calming fragrances to aid restful sleep. Scent playlists are definitely on the horizon.”


With an increase in home working predicted into the future, I expect this category to still grow very strongly. Angela Stavrevska, Creative Director, UK, CPL Aromas

Consumers have been trading up to more expensive candles, and post-lockdown they will continue to spend more on their homes as they spend more time indoors. Matt Maxwell, Consumer Insight Director, Kantar


Top,  Next stage strategies,  Home fragrance,  Online opportunities,  Notes for a new world,  Country highlights,  Outlook

Trend 3: Multifunctional scents

Fragrances that protect, fragrances that calm, energise or induce sleep. Multifunctionality lies at the heart of fragrance – humans have after all used scent as a sleep aid for hundreds of years.

But in modern perfumery, multifunctional applications have been sidelined as a niche option for fragrance consumers.

Yet the development of wellness and self-care trends throughout beauty and fragrance has brought a renewed focus on the additional benefits that fragrance can offer.

With products such as: The Nue Co’s Functional Fragrance with scientifically proven anti-stress benefits to Sanctuary’s Sleep Mist from its new wellness line that contains a fragrance which has been scientifically proven to help the user fall asleep faster and for longer; to CPL Aromas’ new InsectaGuard insect-repellent fragrances and Firmenich’s Dreamwood ingredient, a sandalwood fragrance said to deliver skin care benefits, the industry is coming up with more solutions that focus on the functional benefits of fragrance.

“Today, consumers want more. Each product must answer to a clear need at a specific time. Perfumes have always been about seduction, but now consumers want to take it further,” comments Laurent Mercier, CEO of Eurofragrance.

“Trends such as aromatherapy and aromachology are revolutionising fragrances and in all categories. Today, products provide a more holistic vision, with some brands even claiming benefits for their fragrances and ingredients.”


“Perfumes have always been about seduction, but now consumers want to take it further" - Laurent Mercier, CEO, Eurofragrance


Calm through crisis

The Covid-19 pandemic has added further fuel to the trend: The NPD Group reported that consumers have been utilising scents to create a calming ambiance at home during the uncertain period.

And data from Chemist4U found that sales of sleep aids including pillow mists and temple roll-ons increased by 708% in April 2020 compared to January 2020.

With more than half of the UK having struggled with sleep during the lockdown (source: Mori Ipsos/ King’s College London) the functional role of fragrance has never been more relevant.


Top 3 mood benefits sought by UK fragrance users

Source: Mintel


Clare Varga, Head of Beauty at WGSN says: “Functional fragrances that are formulated to boost or improve mood or physical wellbeing have been gaining traction and this has been hugely accelerated by Covid-19.

"Fearful consumers are actively seeking beauty products – including scents – that boost immunity in order to future-proof themselves against further outbreaks.”

In April, the BBC reported how in Turkey, sales of traditional Turkish kolonya soared as people turned to using the scent to help protect against Covid-19. With its high alcohol content it acts as an effective hand disinfectant and can break down the virus’ hard shell.

The industry has seen many multinational and niche perfume houses start producing hand sanitiser sprays and Mercier notes that the need created for new products may “reshape the fine fragrance category towards a ‘multifunctionality’ aspect, bringing not only seduction, but also protection.”

Beyond its protective role, new fragrance developments have a potential to explore many further benefits, says Elsa Rahal, Marketing Manager of CPL Aromas.

Benefits related to emotional wellbeing such as refreshing, calming, soothing or even ‘tactile’ properties, such as being gentle on skin or imparting a caring feeling onto skin could all play a role.

“I think that we will see more and more multifunctional launches post-Covid as this will become a trend for a while,” says Rahal.

Scents with benefits

“In the post-Covid world, consumers are looking for a sense of serenity,” adds Sandrine Perraud, Global Director, Fragrance at Beautystreams. “The pandemic added even more anxiety to our stressful modern lifestyle.

"Therapeutic executions of fragrance appeal to a very large audience and give the category a sense of meaning, depth and connection.”

Perraud notes that CBD fragrances promise benefits that go far beyond a nice smell and consumers now expect formulas to target physical and emotional wellbeing.

“Fragrance has an impact on our emotions and any fragrance brand promoting balance and a new kind of experiential wellness will resonate with consumers’ aspirations to simply feel better.

"Neurosciences reveal neurological mechanisms unknown so far, opening the possibilities to master the genesis of emotions and the way they relate to a fragrant stimulus.

"We see the emergence of ‘fragrance for self’ as opposed to ‘fragrance for self-expression’, moving from a usage where fragrance is used to shape our identity in a social context towards fragrance for introspection.”

Varga says that as people have started to buy perfume for themselves, rather than to make an impression, the demand for mood-boosting transportive fragrances has increased: “Functional fragrances took a more emotive direction during lockdown, providing both a means of escape and connection.”

For example Nivea Sun Edt, which soft launched in the UK exclusively on Amazon in the spring, became popular with consumers for being a nostalgic summer mood-booster at a time when many had to cancel holiday plans.

“With our freedom to explore the outside world or spend time with loved ones curtailed by travel restrictions, FOGO and finances, transportive scents are enabling people to ‘travel’ beyond their home and local environments,” explains Varga.

“Scent is a powerful trigger and one of the core ways we experience life and memory and has also been shown to provide reassurance and comfort in times of stress, something which has been intense during the coronavirus outbreak.

"We’re seeing scents that are familiar – scents of events, festivals, sporting events, foods, people and even everyday normalities like the pub or the cinema.”

Home fragrance brand Earl of East’s Scents of Normality range developed in partnership with Uncommon Creative Studio enabled consumers to be able to smell the places they missed the most during lockdown, with candles including The Local, The Festival and The Cinema.

Now the industry has further opportunity to explore aromatherapy claims, ingredients to help boost energy and help consumers sleep; “Everything related to enhancing day to day lives while creating this ‘wellness bubble’,” says Rahal.

And there is a final reason why multifunctional fragrances will now come to the fore. “Increased financial pressures mean consumers are redefining value beyond cost,” explains Varga.

“Multifunctional products are in demand and this has now crossed into the fragrance sector.” Samantha Dover, Senior Beauty and Personal Care Analyst at Mintel adds: “The looming recession will ensure that value is at the forefront of the consumer’s mind in future.”


The pandemic has made us focus on the psychological and emotional dimensions. New launches must communicate in that direction and show that fragrances play an important role in wellbeing. Elsa Rahal, Marketing Manager, CPL Aromas

There are indications emerging that the fragrance industry will be wrapped into the larger world of health and wellbeing, finding a place in consumers’ newly protective self-care rituals. Emily Safian-Demers, Senior Trends Analyst, Wunderman Thompson Intelligence


Top,  Next stage strategies,  Home fragrance,  Multifunctional scents,  Notes for a new worl,  Country highlights,  Outlook

Trend 4: Online opportunities

Dwindling footfall in physical stores was a key issue that the fragrance industry faced well before the Covid-19 pandemic hit.

In recent years, retailers and brands have piled considerable investment into reviving the in-store fragrance experience to entice consumers into bricks-and- mortar stores, with creative initiatives such as immersive installations and scent creation pop-ups.

And while investment into digital retail has been a focus for many fragrance brands, with some successful results – Molton Brown saw order values increase by nearly 40% in January since introducing social media commerce, for example – the majority of players within the category still depend on department store relationships for primary distribution.

Eric Korman, founder and CEO of US-based direct-to-consumer fragrance player Phlur, seen as a role model for online success within the sector, tells Cosmetics Business that the online penetration rate of the fragrance category is approximately just 5% to 6%, whereas overall online retail penetration is around double that, at about 12%.

“Selling fragrance online is hard – and it requires dedication and focus,” says Korman. “We have seen a lot of effort by other fragrance brands in digital over the past couple of years - but typically only as it relates to digital media.”

Yet with footfall likely to remain considerably lower than before the pandemic as consumers remain hesitant to enter physical stores, retailers and brands will be forced to turn their attention to online, says Samantha Dover, Senior Beauty and Personal Care Analyst at Mintel: “Whilst many fragrance consumers shop online, they tend to use the channel for repeat purchases rather than product discovery,” she adds.

This presents a giant hurdle for the industry to overcome: unless a consumer is buying to replenish, how do they buy a fragrance online that they have never smelled before? The answer holds the key to a glowing opportunity that awaits the fragrance category.

“Brands can still meet their objectives in a digital manner, it’s just not been done as much in fragrance. But to be strong in digital is a real opportunity,” says Fiona Glen, Head of Projects at The Red Tree.

“Brands need to think about how to get around testers more cleverly. DTC testing initiatives by companies such as SoPost and Sampler are a good idea for brands to get behind.”

Online sampling surge

According to Jonny Grubin, founder and CEO of SoPost, the forced closure of stores and the lack of testers upon reopening has already resulted in a surge in online sampling.

“We’re also seeing a real increase in retailer-led campaigns, which gives consumers the ability to try multiple scents and allows brands to increase the scale of what they’re doing,” he explains.

The Perfume Shop's Try More service that gives the customer the chance to choose three samples to try for free before they commit to any fragrance purchase , and Floral Street’s mini tester wardrobe The Discovery Set has given online customers a way to try the scents before committing to a full-sized bottle.

Meanwhile Glossier shared innovative scratch n’ sniff samples with its customers when it launched its first fragrance, You.

However sampling is only one part of the much bigger puzzle in getting fragrance to be successful online, and brands need to do more to engage consumers online.

“Unlike other beauty categories, product descriptions, reviews and AR do little to aid the fragrance decision making process, and trust in AI-powered fragrance questionnaires is weak,” says Dover.

“This highlights how much fragrance brands can learn from DTC brands in adjacent beauty categories. It wasn’t long ago that the idea of buying a new foundation or lipstick online was almost unimaginable, but DTC beauty brands have successfully increased consumer comfort with making first time purchases online.

"Leveraging influencer and user generated content has never been more important to reach consumers. Meanwhile, fragrance brands also need to create a more personable online shopping experience, and again can follow the lead of DTC beauty brands that used the lockdown period to establish virtual consultation services.” Sana Jardin is already there – the luxury fragrance brand has launched personal 20-40 minute live online consultations.

"It is also the opportunity to rethink the impact of the evolution of the distribution system where we moved from a personal and tailor-made exchange with the consumer to a self-service culture,” adds Sandrine Perraud, Global Director, Fragrance at Beautystreams.

“This is where online can recreate the connection by helping the consumer to become more literate in perfume and make better, conscious choices.”

Enhancing the experience

Korman notes another opportunity that can be further developed by brands selling online: “Developing a powerful unboxing experience in the home is so often overlooked by the majority of players.

Done correctly, a brand can create a powerful set of signals to postively predispose the customer to like a product before they’ve even smelled it – done wrong, and the customer will likely spray once, and then relegate the sample to just more clutter at the bottom of a drawer.

"If they get the feeling their experience was an afterthought, then they’ll likely make you an afterthought too.”


“Developing a powerful unboxing experience in the home is so often overlooked by the majority of players" - Eric Korman, founder & CEO, Phlur


Brands should be looking at what they can do to both increase the quality of the user experience online, and make it easier to shop fragrance, adds Glen.

“Those that have an online presence should use CRM data to reach those that have purchased previously – it’s an easier way for brands to grow. Brands should have different strategies for those customers who are new and those who aren’t.”

There is also a huge opportunity for brands to rely on social media more to build communities and use it to focus on prominent founders and purpose-driven attributes as seen elsewhere in beauty.

“Fragrance brands really need to throw out the rulebooks. Everything that was previously non-negotiable needs to be looked at in a new light,” says Glen.

Above all, brands need to be prepared for the long-term commitment that is required. Korman says: “Creating an immersive digital (mobile) experience that quickly and conscisely explains to a customer your brand, your products, and how to choose what’s right for them, is something we’ve continuously worked at since our launch a number of years ago, and we still want to improve ourselves.”


Digital has gone from being an opportunity or challenge to be faced, to becoming the next stage of our industry’s evolution and anyone who does not adapt to incorporate it risks being left behind.

Fabio Bernardini, CEO, TW.O & Partners

Everything we are seeing points to exponential growth in online sampling. It’s hard to sell fragrance online without having experienced the scent, and this closes the loop. Jonny Grubin, founder and CEO, SoPost


Top,  Next stage strategies,  Home fragrance,  Multifunctional scents,  Country highlights,  Outlook

Trend 5: Notes for a new world

Fragrance reflects the mood of a particular time. Nina Ricci’s L’Air du Temps, with its light, happy and hopeful scent bottled with a crystal doves stopper, represented the peace that came after World War II.

Jean Patou’s 1930 fragrance Joy, with its intense floral composition containing 10,600 jasmine flowers and 28 dozen roses was designed for Patou’s clients who could no longer afford his haute couture clothes amid the Great Depression.

These are two of the greatest fragrances of all time and it is perhaps no coincidence that they were born out of two of the most significant events in history.

Likewise, today’s global crisis will inevitably influence the fragrances that are to come, from the types of olfactory notes that are used to the packaging and beyond.


“I anticipate a desire for cleanliness from the consumer, one that will come from cologne constructions and ideas" - Olivier Aron, founder, ROSAE


The impact of the Covid-19 pandemic has been felt throughout the world, yet recovery from the crisis brings an opportunity to start afresh, and in fragrance this could be played out in quite a literal way.

Olivier Aron, founder of perfume and beauty research and consulting specialist ROSAE says: “I anticipate a desire for cleanliness from the consumer, one that will come from cologne constructions and ideas.

"So there may be an opportunity for a new fresh trend along the lines of O de Lancôme and Eau de Rochas. A bright and clean unisex cologne may work very well.”

Aldehydic perfumes could also come back, says Aron: “Fresh and aldehydic scents, such as Cristal de Chanel, No 19 and Rive Gauche could be interesting in the future due to the cleanliness that they would provide.”

Clean, green notes

The fragrance market has already started to see a crop of fresh scents launch this year with a focus on green notes, from Stem from Malin + Goetz, which features the stalks of hyacinth and lily of the valley and leaves of freesia, and L’Occitane’s new limited edition Verbena Classic Edt with its lemony fresh scent.

The fragrance is made with organic verbena from its producer’s fields in Provence, which were recognised as a “green oasis” for the local flora and fauna by ecological engineering company Naturalia Environnement in 2018.

This links to another trend that is expected to grow stronger on the other side of the pandemic. Elsa Rahal, Marketing Manager of CPL Aromas tells Cosmetics Business: “I see more and more developments with a ‘natural’ direction.

"During Covid, consumers have seen humans’ impact on the environment, and have noted the decrease in pollution, waste, car circulation. Sustainability will continue to be a trend, and NPD will see green and natural olfactory directions, with scents like tea, pine and thyme.”

B corporation-certified brand Skandinavisk’s new sustainable Next Generation range of home and body fragrances includes Skog, a forest-scented collection with notes of pine needles, fir cones, birch sap and woodland lily of the valley, and the brand, which is planning a pre-Christmas launch of limited edition edts, is available in Denmark and the UK, where it will be opening a pop-up shop in Selfridges London during its Project Earth initiative.

The bottles in the range are made from renewably sourced bioplastics, the diffusers come in recycled refill bottles and the candle glass is designed to be kept and reused.

Shaun Russell, founder of Skandinavisk says: “Covid-19 has followed on the heels of the global climate crisis, and I think there will be a trend towards a deep connection to fragrances that are from nature and that hark back to a more innocent time and away from sophisticated, complex and artificial fragrances.

"Paco Rabanne 1 Million may well have been created within a context of celebrity, with everyone wanting to be a social media star, but the situation with the climate and Covid will mean that a lot of people move toward seeking comfort and identity.

"Consumers do not want excess packaging that wastes the earth’s resources; they want simplicity, with fragrances that do not attract from an ego point of view but connect you closer to nature and yourself.”

Emily Safian-Demers, Senior Trends Analyst also believes that “fresh, green, earthy scents that evoke nature will likely come to the fore,” reflecting how environmental concerns have remained top of mind for consumers.

According to Wunderman Thompson Data, 90% of US and UK consumers say that brands have a responsibility to take care of the planet and its people and the company’s recent AnxietyIndex survey shows that levels of concern among Americans around issues like climate change have remained largely unaffected by the pandemic.

From environmental to social consciousness, the crisis has been said to offer an opportunity to resdesign the future, to make a fresh start. What better role is there for fragrance than to reflect these ideals?


A greater connection with nature, and a desire for simplicity and freshness is expected to shift olfactory trends towards green and bright scents.

As consumers crave comfort in uncertain times, ‘doudou’ or soft scents with cocooning notes could also come to the fore.


Top,  Next stage strategies,  Home fragrance,  Multifunctional scents,  Online opportunities,  Notes for a new world,  Outlook

Country highlights


UK

The Covid-19 outbreak has had a devastating impact on many fragrance markets throughout the world over the last few months, and according to figures from Kantar, the UK recorded its lowest sales in the last five years.

A decline of 38% during the 12 weeks ending 31 May 2020 was reported, while data from The NPD Group revealed that prestige scents declined by 33% between January and May 2020, due to the drop in travelling and duty free purchases as well as high street store closures and loss in usage occasions to wear fragrance.


UK: Total fragrance sales, 2020*

*12 w/e 31 May 2020 vs 12 w/e 30 June 2019. Source: Kantar


The UK has, however, shown greater resistance to the crisis than other countries including France, Italy and Spain, with NPD noting that prestige fragrance sales were less impacted due to the UK’s more developed e-commerce market, and the fact that some bricks-and-mortar pharmacies remained open.

And although fragrance has not typically been a key focus for online beauty retailers, e-commerce sales increased by 100% in May, according to Kantar, while at LookFantastic the same month sales rocketed by 300% compared to last year. The pureplay retailer has been working with its brand partners to expand the category.


UK: Fragrance sales by store type, 2020*

*12 w/e 31 May 2020 vs 12 w/e 30 June 2019. Source: Kantar


“Now is really a time for brands to accelerate their online strategy. E-commerce will continue to be the growth driver of the category as people go online to fulfill these types of purchases,” says Matt Maxwell, Consumer Insight Director of Kantar.

“It would be assumed that the growth was coming from younger Millennials, but there is now huge growth coming from the older generations and there are now opportunities to help these generations buy fragrance online.”

The category has seen some new launches, including Calvin Klein Everyone and CK One Summer 2020 and Dior’s Miss Dior Rose N’Roses, and both brands increased their share of consumer spend on fragrances during the 12 weeks ending 31 May. Calvin Klein’s share rose 1.2% to 6.5% and Christian Dior was up 0.7% to 6%, notes Kantar.

However the drop in new launches and the media presence including TV advertising that would ordinarily run alongside will continue to impact the category.

“The category has previously relied on NPD, which drives growth in fragrance as the vast amount of engagement comes from new products. Without it, the stimulus has been taken away that prompts consmers to buy into the category,” says Maxwell.

Mathilde Lion, Director of Beauty Europe for The NPD Group adds: “We can already forsee that there will not be the same level of investment as there would be in a normal year because companies have had to reduce their spending, cut costs and manage stock levels.

"In a way the category would need a relaunch, a plan to support the industry to get back to a level it was at before.”


France

The French prestige fragrance market was also severely impacted by the crisis, with The NPD Group recording a decline of 38% between January 2020 to the end of May, to a value of €393m.

However some positive news shone through: stronger concentration men’s perfumes, which represent 5% of men’s fragrances, bucked the trend and posted growth of 24%, due to the continued positive performance of number one fragrance Dior Sauvage Edp.

According to NPD’s Mathilde Lion, the introduction of edp concentrations of men’s fragrances has been a “big success” for brand leaders Dior, with Sauvage, and Chanel, with Bleu.

“These launches have been much stronger than others. It shows there is room for strong concentrations in the market,” says Lion.


France: Male and female fragrance performance, 2020*

*Prestige sales, January-May 2020. Source: The NPD Group


The women’s fragrance market has been more difficult. Sales of gift sets have been particularly low (-50%) and without this promotional lever, which is important for sales of female scents, the women’s category declined by a total of 40%.

“We were seeing more weakness on women’s fragance even before Covid,” says Lion, There has been around 40 launches since the beginning of the year, which is lower than the same period in 2019, although a few notable new scents included Muglier Alien Mirage, Boss Alive, Hermes L’Ombre de Merveilles and Wanted Girl Tonic by Azzaro.

Lion notes that the reopening of stores in France at the end of May has helped it to reduce the sales decline compared to other countries that reopened later, however she notes: “Even if consumers have been saying that they want to catch up on their purchases since before the Covid period, we haven’t seen much of an acceleration in sales.”

Germany

Although consumer uncertainty remains in Germany, there has been cautious optimism about an economic turnaround since lockdown measures eased. Its fragrance category has, as a result, been in a more favourable position for recovery than other countries.

According to The NPD Group, sales of total prestige fragrances declined by 22%, with female scents shrinking by 23% and men’s scents by 20%.


Germany: Top 3 prestige fragrance launches*

*At the end of May 2020. Source: The NPD Group


“Germany has performed better than other European countries due to several factors: its lockdown finished earlier and some stores remained open, such as drugstores which were deemed essential businesses, while other stores reopened in May which also impacted the trends,” says Lion.

There was also positive news from men’s perfumes which reported an impressive gain of 57%, while home fragrances posted an increase of 11% as consumers looked to create a comforting atmosphere while they stayed at home.

“Sales were mainly driven by candles and room fresheners, with the most popular brands including Rituals, Ipuro and Jo Malone. Although home scents are a small category in Germany, it is interesting to see that it is a category that has benefited from the situation.”

While Germany’s economic outlook is better than other countries, the category is nevertheless expected to post a negative performance at the end of the year, albeit a softer decline than elsewhere.


Christmas will as always be a crucial period for the fragrance category. Brands should look to providing support for new products ahead of this time.

The UK has seen online sales of fragrance overtake offline sales. It is crucial for fragrance brands to get their online strategies right to tap into the growth that will continue going forward.Matt Maxwell, Consumer Insight Director, Kantar


Top,  Next stage strategies,  Home fragrance,  Multifunctional scents,  Online opportunities,  Notes for a new world,  Country highlights

Outlook

Transformation has come to the heart of fragrance. Changes to the way that perfume is discovered and purchased have been sudden, yet they will play an ongoing role in the category’s future.

Sharing the spotlight is conscious consumption, sustainability and transparency, all of which have grown even more important through the crisis.

Hans Holger Gliewe, Chairman of The International Fragrance Association (IFRA) says: “The reduction in pollution that results from a fall in economic activity and travel is one of the few bright spots to emerge from the past few months.

"Coupled with a growing acceptance recently of the ‘climate emergency’, we are likely to see greater efforts to balance environmental and economic sustainability.”

And the intention of the fragrance industry to do so is clear: IFRA’s new joint Sustainability Charter with flavour industry organisation IOFI, launched earlier this month, highlighting the sector’s commitment to greener sourcing and production, employee wellbeing and economic sustainability.

Research shows that consumers favour brands with better sustainability records, and the pandemic has accelerated this even further. Sanjay Vadera CEO of The Fragrance Shop tells Cosmetics Business: “One thing we’ve seen blossom since Covid-19 is the sustainable and clean side of beauty and how customers seem to be ‘going back to basics’ in all sorts of ways.”

And Laurent Mercier, CEO of Eurofragrance, says that such is the demand for “green and healthy” products that, “Many retailers in the UK have already told their clients that if their product is not green, they will not be able to participate in some promotions, for example, at Christmas.

Here I am specifically thinking of Boots and Selfridges, which have quite a relevant share in this market. Consumers are reshaping the whole industry.”

Less packaging, more support

A reduction in plastic packaging, and the amount of packaging that is used, is expected, while waterless fragrances – dry or more concentrated products – are also likely to emerge more strongly.

CPL’s EcoBoost fragrance technology supports the use of ten times’ less fragrance in a product, while Eurofragrance’s Sensolab has developed a technology which requires less water in the formulations of many applications.


“I expect to see more fragrances with tangible benefits, socially conscious fragrances and less luxury for luxury’s sake" - Angela Stavrevska, Creative Director UK, CPL Aromas


Another trend that is expected to continue to influence the fragrance industry is the compassion that many brands have shown during the pandemic. Fiona Glen, Head of Projects at The Red Tree says, “Fragrance has reflected the kindness movement, and this will only continue.”

There have been dozens of examples of community support, from Acqua di Parma, which donated 100% of its online profits of sales of its home collection, Barbiere and personal care products to its home country, to LVMH’s production of hand sanitiser for French hospitals.

“I think consumers will want more thoughtful products going forward,” explains Angela Stavrevska, Creative Director UK of CPL Aromas. “I expect to see more fragrances with tangible benefits, socially conscious fragrances and less luxury for luxury’s sake.”

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