Annual global perfume industry sales revenue $27. 5 billion Annual US perfume industry sales revenue $5. 2 billion Percent of American women who don’t use perfume 17 % Number of perfume brands carried by US department stores in 2002 756 Number of perfume brands carried by US department stores in 2010 1,160 Percent of fragrance market held by Coty Inc 13 % Percent of designer perfume brands priced at over $75 46 % Percent of celebrity perfume brands priced at over $75 1 % Marketing Project Management EXECUTIVE SUMMARY TRENDS Fragrances achieved strong growth in 2011.
After experiencing a steep 7% decline in 2009 and recovering by 2% in 2010, sales of fragrances increased by 8% in 2011. Sales of fragrances declined in 2009 due to the economic downturn, as consumers of all economic levels restricted gift-giving and self-purchasing. With an improving economy, high-income consumers felt comfortable spending on themselves and on others once more. As a result they returned to purchasing discretionary items such as fragrances. In turn, total sales of fragrances increased by 8% in 2011, to reach US$5. 8 billion.
COMPETITIVE LANDSCAPE Coty was the leading player in fragrances in 2011, with a 13% value share, down from 14% in 2010. The company is strong in both mass and premium fragrances. In the mass segment Coty markets a wide range of established strong brands, such as adidas, Jovan and Stetson. It also has a significant presence in the premium segment with its Calvin Klein fragrances.
The company has been successful with its Marc Jacobs, Vera Wang and Kenneth Cole fragrances, licensed from successful fashion designers. Celebrity fragrances have been the main focus of the company, as it launched fragrances from Jennifer Lopez, Celine Dion, Sarah Jessica Parker and Tim McGraw.
Despite introducing new fragrances such as Beyonce, Celine Dion Signature, cK One Shock, David Beckham Homme and Heidi Klum Shine, Coty lost share in 2011 due to its underperformance in its mass fragrances division PROSPECTS Retail sales of fragrances are forecast to increase by 6% in constant value terms over the forecast period, to reach US$6. 1 billion. This is a much better performance than the 13% constant value decline in the review period. The 2008/2009 recession contributed to the 13% decline over 2006-2011, and the US economy is expected to make a recovery over the forecast period.
Due to ongoing product innovation in the premium segment, high-income Americans appear to have regained their interest in fragrances. Premium niche fragrances which are sold in limited distribution channels allow affluent consumers to feel that they have made a discovery. At the same time, manufacturers of fragrances will need to address consumer apathy and confusion. There has been an explosion in the use of scents beyond fine fragrances, with everything from hand dishwashing soap to fabric softeners to women’s razor handles now infused with scents. As a result, fragrances have lost their mystique and become less “special” and commoditised.
With more than 100 new launches of fragrances a year, the glut of fragrances in the marketplace has also created consumer confusion. The saturated environment in fragrances has arguably contributed to consumer confusion and apathy, making it very difficult to make a brand stand out. Synopsis? The report presents detailed data on consumption trends in the Female Fragrances category in United States, analyzing consumption volumes and values at segment level. It also provides indispensable data on distribution channels, profiles of companies active in the Fragrances sector, latest industry news and mergers & acquisitions in the sector.??
Furthermore the report enables readers to examine the components of change in the industry by looking at historic and future growth patterns – how consumers’ changes in behavior have affected total volumes, values and type of products chosen.?? Summary? Canadean’s “Female Fragrances Market in United States to 2016” provides detailed data on market dynamics in the Female Fragrances category, providing marketers with the essential tools to understand both their own and their competitors’ position in the market and the information to accurately identify the areas where they want to compete in the future.??
This report brings together Canadean Intelligence’s research, modeling and analysis expertise in order to develop uniquely detailed market data. This allows domestic and foreign companies to identify the market dynamics that account for Female Fragrances sales overall and to discover which categories and segments will see growth in the coming years.?? Scope? “Female Fragrances Market in United States to 2016” provides you with the following: ?? • Historic and forecast growth dynamics by value and volume.? • Historic and forecast segmentation by value and volume.?
• Distribution channel data by value.? • Profiles of companies active in the Fragrances sector.? • Latest news covering the Fragrances sector in United States.? • Latest mergers & acquisitions activity in the Fragrances sector in United States.?? Reasons To Buy? • Enhance your understanding of the value and volume growth dynamics of the Female Fragrances category in United States.? • Promote growth in your business with detailed product sales segmentation for both volumes and values, as well as sales by distribution channel at the product category level.?
• Identify the future pattern of market trends, from winners and losers to category dynamics; and thereby quickly and easily indentify the key areas in which they want to compete in the future.? • Familiarize yourself with the competition with uniquely detailed profiles of companies active in United States Fragrances sector.? • Improve your knowledge of the latest news and mergers & acquisitions activity in the sector. Fragrance Industry in the United States Niche perfume examples : Amouage, Creed, Juliette has a gun, Annick Goutal, Bond no9, L’artisan parfumeur, the different company, Agonist, Maison Francis Kurkdjian.
It’s been more than thirty years since the ‘niche’ perfume current first swept into the perfume world, and by putting creativity first — above marketing and financial interests — upset traditional perfumery and led the industry in an bold new direction. In the face of giants, niche was small, lively, and potent. Today, niche still generates a powerful buzz despite conflicting opinions about its definition, size, and even its continued existence. Youth Market Today’s teens and tweens are more sophisticated consumers than their predecessors.
According to GCI magazine, a cosmetics industry trade publication, youth between the ages of 13 and 19 years old reflect a global fragrance marketing segment worth more than $250 billion. Fragrance manufacturers have tapped into this younger niche with upbeat fragrances like Valentino’s “Rock and Rose Couture” and Burberry’s fragrance called “The Beat”. These premium fragrance manufacturers have developed products specifically for the youth market, with names and packaging that appeal to young consumers. Celebrity Endorsements According to U. K.
-based fragrance retailer The Perfume Shop, celebrity-endorsed perfumes accounted for 40 percent of the total market in the U. K. in 2007. In the U. S. , celebrity fragrances are readily available as well. Companies who have celebrities endorse their fragrances do need to consider which celebrities will really sell their products. Celebrities should be known globally, such as Charlize Theron or Halle Berry. The celebrity must have a high level of credibility in her field whether she is an actress, athlete or musician.
Factors Affecting Fragrance Marketing Fragrance sales have been hurt by the global economic crisis, Market Research news reports, but the overall outlook for fragrance remains positive. The male consumer has entered the fragrance market as an emerging niche. Men now spend more time on personal care and purchase more personal care products including fragrances, according to GCI magazine. Although still fairly new to the market, fragrances that are marketed toward holistic and aromatherapy niches are also emerging. These fragrances represent part of the emerging market considered mass fragrances, which according to GCI magazine grew by approximately 4 percent in 2008.
Considerations It is especially important for fragrance manufacturers to pay attention to emerging consumer bases. Natural ingredients, environmentally conscious manufacturing and social media are all emerging marketing trends that attract the new generation of fragrance consumers. Consumers equate fragrances with looking nice, supporting marketing that touts beauty as well as delightful scents. Although the male market niche is growing, according to the Market Research News, 2/3 of fragrance consumers are still women.
Women continue to be concerned about their personal appearance and believe fragrance plays a role in this. American Personal Luxury Goods Market trend (2010-2012E, €B) US saw good performance in 2012 inflated by dollar appreciation (€/$+9% vs. 2011) 2nd tier locations increasingly attracting the attention of international brands Good performance of department stores, still a fundamental channel in US Growth in South America driven by Brazil; most brands leaving Argentina after years of disappointing performance Innovation and new launches: the growth levers of beauty
Perfums : 2011: year of ‘line extensions’, while 2012 witnessed several new launches both for men and women New designer brands entering the category Department stores outperforming specialized chains in US Widespread price increases sustaining growth in Europe over relatively flat volumes -High-ticket categories (i. e. cars, yachts, design) striving to grow in line with previous years • From emerging markets to emerging consumers? -Consumers ever more global in their luxury shopping thanks to increasing mobility • Retailization of ‘unexpected categories’.
-All personal luxury goods, including perfumes & cosmetics -Gourmet food, fine wine and restaurants increasingly combined in multi-purpose formats • On-line / Real-time? -Embedded in the product (e. g. from cars, to yachts, to home automation) -Experienced in the store (e. g. digital screens, tablet catalogues)? -Real time communication between brands and consumers (communities, blogging) In this changing luxury world, what has worked so far may not be enough anymore How to succeed in next 10-15 years?
Perfect value proposition -Strategic approach to product offer and price positioning -Innovative marketing levers Enhance customer experience -Insight – segmentation – customized delivery – advocacy virtuous circle -Omnichannel strategy Achieve operational excellence -Customer-centric organization -“Retail impeccability” culture -“Assortment chain” Global Fragrance Industry The world fragrance and perfume industry is expected to exceed $36 billion in 2017, according to research from Global Industry Analysts.
Market growth is fuelled by demand from emerging markets and consumer lifestyle trends granting an increasingly central place to grooming. Market growth is, however, inconsistent across various geographic zones because growth in any one geographic zone depends on the living standards, disposable income and GDP of the country. Consumer demand for fragrances and perfumes is largely dependent on demographics and lifestyle trends, in particular the importance of luxury and status.