This feature originally appeared in the May 2007 edition of our sister publication GCI Magazine (www.gcimagazine.com)
The Future of Stars is Not as Certain as it Seems
In recent years, the cult of celebrity has helped drive sales in fragrances with more and more shelf space devoted to pop stars, actors, fashion labels and even authors. Although the risks of celebrity endorsement are apparent—the selling power of a particular icon is only as strong as their image, which can easily be tarnished by bad behavior or a new flavor of the month—the trend currently shows no sign of abating. Kate Moss is the latest star to jump on the bandwagon with an agreement with Coty, which also works with Kylie, Jennifer Lopez, Sarah Jessica Parker and Victoria and David Beckham. Cozying up with celebrities has also proved successful for Elizabeth Arden, which uses carefully chosen stars to generate appeal among a range of consumer groups. With Britney Spears and Hillary Duff targeting the teens to 20s segment, the company is hoping for a hit among baby boomers with its Danielle Steele fragrance. However, this type of marketing does not appeal to every demographic and will never become all-pervasive as manufacturers look to specifically target every consumer segment. In France, for example, the rich and famous do not have the same level of notoriety as they do in countries such as the United Kingdom and United States, and consumers are more sophisticated in their fragrance selection, putting scent above image. As such, celebrity fragrances have not been a major trend there. The coming year could also see the beginnings of what some industry sources suggest is an inevitable backlash against the celebrity trend. Driving this change in demand will be consumers themselves, as their growing sophistication makes them more likely to be persuaded by high-tech ingredients and innovative delivery formats rather than savvy marketing campaigns. However, manufacturers may also start pushing for this shift. Attaching a famous face or name to a new cosmetic or toiletry provides it with a ready-made image and does away with the need for full-scale brand building. Yet celebrity brands do not tend to have longevity, and in fragrances particularly, extending shelf life has become vital in an increasingly fickle market.
Artisanal Fragrances are Stepping Beyond the Niche
A trend that parallels celebrity is the speciality fragrance. These artisinal scents are becoming available to a wider audience and are emerging as a fast-growing industry niche. In November, beauty boutique Studio Fred Segal launched a store-within-a-store called Memoire Liquide, offering bespoke scents at accessible prices (between $30 and $75 for a three-pack). Scent Design also sells custom fragrances on a budget (at $20–$30/oz), as well as offering online advice about blending and layering scents. Even upmarket perfumery Roja Dove, which offers both bespoke services and rare, top-quality perfumes, has expanded from its Harrods home to the less exclusive House of Fraser department store in Manchester, United Kingdom. Artisanal fragrances are helping to revive the industry’s status as an art form, bringing it back to its apothecary roots. Memoire Liquide, for example, consists of a library of 160 scents contained in glass vials complete with stirring rods. Bespoke perfumery, in particular, also helps to educate consumers about the craft—how scents are created, the types of ingredients used and how they react with the body’s own perfume to smell different on different people. This again adds prestige to the industry, potentially on a level comparable with the wine industry. Some consumers have already begun collecting rare scents and some Web sites offer tips on how to source and store them. What this means for the industry is a more discerning consumer, a reinvigoration of the premium fragrances segment and a willingness to trade up for quality. The trend towards less concentrated eau de toilette varieties will also be reversed, with a resurgence of eau de parfum launches. Product life should also increase, bucking the present trend of high launch activity, and advertising budgets could also be cut, with funds instead being more heavily focused on the development side. There may also be a move away from the idea of a fragrances wardrobe as consumers seek out scents with which they have a more personal connection. Roja Dove is heading this trend, offering a service which helps the consumer to identify their signature scent.
According to Euromonitor International’s latest data, fragrances will grow as fast as the overall cosmetics and toiletries market—a more rosy view than that presented this time last year. Manufacturers will need to carefully think about their strategy in emerging markets to keep ahead of the game. China, for example, has a number of pitfalls—the most significant being the lack of entrenchment of fragrances in the culture of the country—which need to be considered in parallel with the obvious potential that exists. Wider industry trends, such as the focus on the consumer and the drive for natural/ethical products, all need to be kept at the forefront of minds alongside those that are specific to the category, including the possible backlash against celebrity and the rise of a more educated consumer. Indeed, there are many factors that need to be juggled to ensure success in this area.