Trading in the UK since 1992, The Perfume Shop is gaining momentum as its profile increases and its marketing becomes more targeted. Katie Middleweek reports on how this unique retail concept is taking an ever stronger foothold on the UK high street
The Perfume Shop is on a mission – to snare the UK’s fragrance consumers while they are still young and keen and then to ensure that they never buy fragrance from any other retail outlet. “Most people still bank with the same bank they opened their first account with and this goes for their phone network too,” explains The Perfume Shop’s managing director, Jo Walker. “And the same also goes for where they buy their first perfume from.
“If they get good service the first time they buy they will keep on coming back and I want to make sure that we are their first port of call.”
Determination like this seems to pay off as the group is experiencing a bumper sales period – Christmas 2009 saw an 8.5% sales increase compared with the previous year and online sales during the same period grew by a staggering 162%.
Walker herself has been with The Perfume Shop for every one of its 18 years, joining the same year the company was founded. Coming from a department store background, she started out as a store manager for The Perfume Shop in Birmingham and moved up through the ranks. Many of the group’s 1,500 staff, it seems, show the same loyalty and there is a real team spirit at the head office in High Wycombe, according to Walker.
A developing offer
When it launched 18 years ago The Perfume Shop, says Walker, set out its stall as offering customers “aspiration, access and accessibility” but as the years have passed the offer has evolved into “price, service and range”. As a retail concept, the chain is fairly unique. The popular open frontage and products on obvious display with minimal fuss, seem to appeal to consumers, particularly to male ones who are often very nervous about going into a department store with its spritzing saleswomen.
Walker comments: “Price is a crucial factor whatever the retail channel in question – and this is never more important that nowadays – but we are sensitive to the fact that every consumer wants something different and our staff identify their budgets quickly and then help them accordingly.
“We have actually seen our format imitated by some of our competitors and we are very flattered as this must mean we are doing something right! The fact remains that we are the number two retailer of fragrance in the UK, behind Boots, and we never take our customers for granted. The challenge we face every day is to keep them coming back and buying with us again and again.”
AS Watson: parental guidance
Asian retailer AS Watson purchased The Perfume Shop in 2005 from the Merchant Retail Group plc. It then took its place alongside the group’s other retail chains in Europe such as France’s Marionnaud and Belgium’s ICI Paris XL. The official spokesperson for AS Watson, Malina Ngai, told ECM that The Perfume Shop fits in well within its portfolio of stores
“The Perfume Shop sits within our luxury division and its appeal is its positioning as the UK’s fragrance expert combined with accessibility and value for money. These stores supply a wide range of the most current and sought after fragrances alongside some great exclusives and designer brands such as Chanel and Christian Dior.
“We are mindful of Europe’s current economic climate at present but we have continued to see strong sales for The Perfume Shop in the past year. It has an aggressive expansion plan in place and will continue to amplify its status as the UK’s premier fragrance retailer through its high quality products and expert staff.”
Walker says the reason The Perfume Shop has been such a success is that it has always stuck to a formula it is good at and it is 100% dedicated to selling fragrance. This has enabled rapid expansion, none more so than in the past few years with 2009 alone seeing five new openings in high streets across the country. “We now have 179 stores across the UK,” says Walker “often in key high street and shopping centre locations and we are opening several more stores this year. The fact that we are good at what we do and the business is profitable has allowed us to do this.”
Survive and thrive
While The Perfume Shop is reluctant to discuss its finances, the fact that so many store openings are in the pipeline can only be testament to the fact that times are good. Certainly a noticeably
stepped up advertising and marketing campaign won’t have hurt this either. Walker will concede however that the start of 2010 was tough: “Compared with last year, the start of this year was a challenge. I feel that 2009 really separated the men from the boys and our staff displayed a real survive and thrive mentality and everyone in the business got behind this.
“But we have seen a distinct lack of new fragrance launches this year which will have an effect long-term. Suppliers have decided to wait until the second half of this year to show their hand somewhat so we shall wait and see how everything pans out.”
Walker remains optimistic though and says that the spike in sales at Christmas has given them hope for the rest of this year, while also recognising that retail is an evolving market and they must stay on top of trends and what customers want at all times if they are to gain sales.
With 179 stores and counting, The Perfume Shop prides itself on offering consumers a wide range of quality scents at a variety of price points
She adds: “Customer loyalty is key and nothing shows this more than increased like-for-like sales. Our fragrance sales have remained high – particularly with our recent Think Big promotions where we offered customers the opportunity to buy 100ml fragrances at discount price. So much so that we are doing this again this month.”She remarks that sales of sets and coffrets have taken a nosedive though but that this is to be expected during a recession as people will always concentrate on buying scents rather than ancillary products. And Walker does feel that while people had a galvanised attitude last year, this year and the general election is has brought with it, has created a definite air of uncertainty among consumers.
“Retail is a business of constant challenges,” she says “but it is also an exciting and dynamic environment to work in and one which has many opportunities.” The Perfume Shop’s formula seems to be working at present – consumers appear to like its mix of good value lines and its direct approach and with Walker at the helm, its direction is assured.
Marketing: getting the right mix
Matt Walburn is The Perfume Shop’s marketing manager. As the group has intensified its marketing activity over the past couple of years, it has been his job to ensure that The Perfume Shop gets the message right and timing is crucial, as he explains
How do you endeavour to get the correct mix of marketing and branding?
With our competitor mix it is essential that we get our branding and positioning spot on. We have invested significantly to increase our brand awareness with some impressive results – our research shows that 80% of the UK population are now aware of us.
Through which different mediums have you communicated this message?
We have made use of radio, television and print advertising which have all been underpinned by our robust and ongoing PR programme. We have also pushed our e-commerce business hard to get our presence out to the online consumer. We operate in an increasingly competitive market and consumers are keener than ever to get good value for money, despite their personal circumstances. They seek out retailers that are relevant to their purchase needs, which are well priced and which offer outstanding service – and we make it our mission to deliver against all three of these needs.
How do you tailor your marketing campaign to the different times of year for purchase?
There are four key events which drive sales for us throughout the year. These are Valentine’s Day, Mother’s Day, Father’s Day and Christmas and these all depend on us presenting compelling gifts to the customer.
We ensure that our stores are properly set up for the gifting market by offering the right products at a range of price points, having compelling price promotions on key lines and by offering added-value services such as gift wrapping and so on.
How important is it to keep an eye on your competitors marketing campaigns?
It is very important. As a business we pride ourselves on swift turnaround and implementation when the market dictates it – this is vital for any retailer serious about success. We plan effectively and are confident in our direction but we stay flexible to allow us to get the most out of an ever changing industry.
How importantly would you rate the internet as a marketing tool?
E-commerce is a key focus for us. We hope that our online store will continue to grow in its own right but it is increasingly a channel for consumers to use alongside their “bricks and mortar” shopping. We have ambitious plans to broaden our offer to consumers.
