Pricier perfumes, with their big names and bigger ad budgets, have fared far better, with premium fragrance sales in the United States climbing 16 percent since 2000 to a record-high $5.2 billion last year. But for mainstream scents, a less-smelly America, and the rival products that have allowed it, has undermined their entire industry.
“The explosion in the use of scents … has led fragrances to be more commoditised. As a result, fragrances have lost their mystique and have become less ‘special,'” Euromonitor analysts wrote in an industry report last year. “The saturated environment in fragrances has arguably contributed to consumer confusion and apathy, making it very difficult to make a brand stand out.”
Big companies have helped deflate the scents industry by piling on with their own special smells. Verizon Wireless last year trademarked a “flowery musk” spritzed in some storefronts that, as Verizon lawyers said in trademark filings, help distinguish the cellphone giant from all the others.
United Airlines wants to trademark the fragrance it pumps into lounges and jet bridges at Chicago’s O’Hare Airport, an herbal aroma the airline calls Landing that smells of cedar, sandalwood and orange peel. The smell, the airline has said, was designed to create “positive transition moments” for travelers by keeping them happy — or at least less peeved by potential delays.
This kind of “fragrance commoditization” has torpedoed firms like Coty, the Paris beauty-products giant, which has lost market share in recent years to competitors like L’Oréal because of the crumbling sales of its mass fragrance division, which includes Adidas, Jovan and Stetson. The firm has instead refocused its efforts toward more prestige and celebrity fragrances, including scents for Beyoncé, David Beckham and Katy Perry.
For younger customers, celebrities (and their marketing empires) continue to jump onto shelves with branded scents of their own. Boy band One Direction in recent months launched Our Moment, an eau de parfum by Elizabeth Arden. Music mogul Jay Z (Gold Jay Z), pop singer Justin Bieber (The Key) and rapper Nicki Minaj (Minajesty) have followed suit.
But even some celebrity fragrances are slowly losing popularity, as their target market of tweens and teens choose to spend less of their dwindling disposable cash on fragrances (and more on, say, mobile apps). “The mass fragrance part, in particular on the celebrity side in the U.S., is in decline,” Coty chairman Bart Becht said on a February call with analysts.
The big money in perfumes and colognes has always been in the designer labels, which are still growing because of some adept image control. They are often bolder or more pungent, making it harder for rivals to co-opt their special sauce. And many are sold in limited-distribution channels, like luxury makeup counters or boutiques, which analysts said allows “wealthy consumers to feel that they have made a discovery.”
Premium scents like Chanel No. 5, Acqua di Giò and Donna Karan Cashmere Mist have years of prestige, marketing and brand loyalty to boost their sales. Others invest heavily in marketing: For its Flowerbomb perfume, lesser-known fashion house Viktor & Rolf dressed sales associates in pink outfits and had them offer free hand massages with its scented body cream. (The $106.99-per-3-ounces is an eye-catcher all on its own: Its glass bottle is shaped like a hand grenade.)
While rich and discerning perfume lovers are happy to spend more to not smell the same as everyone else, analysts said, value shoppers couldn’t care less. Most skip the cheap perfume and get the same scent from sweet-smelling deodorants, body lotions, body washes and body mists. If they do splurge, data show, they buy up smaller, cheaper vials of designer perfume for just a whiff of the cachet.
“The mainstream market is being held back by a strong perception [that it’s] just another beauty product,” said Nicholas Micallef, Euromonitor’s global beauty and personal care analyst. But premium “niche fragrances do not just sell scent — they sell a story, an artisanal work of art and an experience.”
When Americans want to smell good, what we reach for is changing, too. Women’s sales of cologne, the lightly scented fragrance, have doubled since 2010 to about $70 million last year, data from market researcher NPD Group show. That dovetails with the rapid growth of softer scents and sprays for women seeking to show off less-scented “natural beauty,” global beauty industry analyst Karen Grant wrote in an NPD report this month.
Meanwhile, men’s sales of eau de parfum, the richly potent musk just a step below perfume, have grown from $15 million a year to more than $50 million in the United States over the last five years, NPD data show. Men are spending more than ever on clothes, shoes and style and, “by all appearances, it seems that men are establishing a new relationship with fragrance, and their level of experimentation and sophistication has risen,” Grant wrote.
Therein lies the secret of the scent, analysts said, and its power to conjure a lifestyle from a simple spritz. It’s the main reason why low-cost fragrances with no marketing budgets struggle, while pricier “lifestyle” brands have climbed. Few middle-class shoppers can afford a Giorgio Armani suit, but they can still afford the designer’s cologne.