The real impact of the pandemic on premium fragrances
8 Jul 2021 --- BPC Insights speaks to Fiona Glen, Head of Projects at The Red Tree about the pandemic’s impact on the premium fragrance market, how we anticipate it will change in the second half of 2021, and how brands can maximize the biggest opportunities available.
As the global population has lived with the COVID-19 pandemic for 18 months, the premium fragrance sector has been in a precarious position and split between those consumers that do not have disposable income to spend on luxury products with those who want to invest in indulgence as treats that provide the feel-good factor.
Mood-based launches
“Increasingly people are looking to fragrance to 'brighten' their mood and as a form of escapism at a time where we can't travel,” points out Fiona Glen, head of projects at beauty brand consultancy, The Red Tree. The premium fragrance industry has seen the arrival and prominence of mood-based fragrance launches in the high-end segment thanks to some notable fragrance launches.
Swedish company, Byredo, has used color in their packaging for the first time during this period, for example. Spanish luxury fashion and perfume, Loewe, has also continued this bright and 'escapism' based fragrance trend, through its objective of 'bottling Ibiza'. Premium fragrance name, Jo Malone, has also begun launching products that are very different to what they have launched before packaging-wise, which as Glen notes: “Is a huge departure from previous fragrances.”
Storytelling and lightweight fragrances dominate
From a messaging perspective, Glen reveals: “We are seeing people moving away from speaking about oriental fragrances as that term is out of date.”
Preserving and maximizing ingredient usage to minimize wastage is prominent in premium fragrances too. Brands like Sana Jardin are driving the upcycling movement, which represents a change in behavior “which will definitely increase,” Glen emphasizes. The brand’s storytelling and purpose also strongly resonate with consumers, who are increasingly seeking these from their selected brands and will be a differentiator from heritage brands.
Trend-wise, the consultants are also seeing fresh and lighter fragrances rank highly on consumers’ premium must-have lists, Glen states: “As they work well on a daily basis compared to deeper, woodier fragrances that are more associated with night-time.”
The impact of the pandemic
There are five key areas and ways that the pandemic is dominating the premium fragrances market, strategic business consultancy The Red Tree’s Fiona Glen outlines:
- The premium fragrances market continues to be heavily impacted by the fact that the travel retail sector has been almost eradicated overnight. This is not something the consultants expect to return rapidly.
- Overall, the consumption of fragrances has been lower as people have been going out less and caring less about the fragrances they wear.
- The pandemic has affected people financially in different ways so some are struggling to justify premium purchases whereas others are investing in themselves.
- We have seen the gap widen between existing and repeat purchases and new fragrances as online sales take up the largest proportion of revenue. In this case, the role of sophisticated sampling, and product descriptions are increasingly important to help consumers make the jump to new fragrances. Sana Jardin and Floral Street have been executing this very well with highly accessible sampling that is redeemable against future purchases.
- Home fragrances have performed well and we expect this to continue.
When the world moves out of quarantines and lockdowns, the consultants expect mixed changes in the premium fragrances market. “Some people will be wanting to invest in themselves, while others have got used to wearing less and have been financially affected,” shares Glen.
Optimizing opportunities and channeling challenges
The digital fragrance arena is set to shape the sector significantly. “Without a doubt, online shopping will remain a huge part of premium fragrance ongoing and therefore the measures that have been put in place to ease shopping will be essential and will need to be improved on,” adds Glen.
However, managing the balance between brick-and-mortar sales with online shopping is not without its hurdles. “The increase in online sales within beauty is something that has been artificially inflated with store closures,” relays Glen. “While this is expected to return, there is a gap in the level that some prestige brands are operating at versus indie brands,” says Glen.
“Similarly, the department store sector has been heavily and irreversibly impacted by the pandemic—meaning that the omnichannel is not just a buzzword but a requirement, particularly for prestige, heritage brands,” adds Glen.
Retailers such as the 400-plus brand, Parfumado, with its online perfume quiz, and monthly designer perfume subscription provider, Scentbox, are tipped as interesting outlets to watch.
Loyalty, lifespan and sustainability lead
“Sustainability remains relatively untapped and I expect this to increase over time, included in this is social purpose and packaging sustainability,” says Glen on the biggest opportunities set to shape the premium fragrances space. Refills also present a promising market, which, to date, have not been executed in the beauty industry as much as they have the potential to be.
Brands that explore the lifespan of fragrances is also an interesting area to look out for, says Glen: “It could be interesting for brands to follow some kind of fragrance amnesty to drive sales by returning products, which could be linked to the education on the recommended life span of fragrances.”
To encourage loyalty from luxury-seeking consumers, The Red Tree expects brands will increase its investment in customer retention, through methods including subscription or sophisticated customer relationship management (CRM) systems.
By Natasha Spencer-Jolliffe, BPC Insights Senior Reporter