Fragrance sales plummet in US despite strong global figures

By Guy Montague-Jones

- Last updated on GMT

Fragrance sales in the US slump as the booming European and
emerging markets contribute to strong global figures for the fast
moving industry.

The value of the US market fell by 4.5 percent last year to $5.9bn, while fragrances performed well on a global level with sales growing 6 percent to $30.6bn, according to a recent Euromonitor report on the industry.

Celebrity endorsed perfumes have been invading US stores in greater and greater numbers over the past few years, but the signs are that the concept is beginning to bore the American consumer.

The celebrity perfume was conceived in the US, but has been embraced in several Western European countries where it continues to be a key driver for growth in the overall fragrance market.

"Western Europe was far more dynamic than America in 2006.

What's behind the declines in the US are steady or even declining unit prices, over saturation of new products and low brand loyalty," said Diana Dodson from Euromonitor.

Dodson said the negative effects of over saturation and low brand loyalty were being exacerbated by the celebrity fragrance trend because celebrity perfumes tend to have short shelf lives and consumers rarely remain loyal to the same signature fragrance.

The reasons put forward by Dodson for the US downturn are similar to the ones she used to explain the strength of the world market.

Talking about the fickle fragrance consumer, Dodson said: "Fragrance has become the accessory that completes an outfit and these consumers update their scent wardrobe almost as often as they update their look."

While her US equivalent is tiring of the endless product launches, the fickle fragrance consumer continues to queue up for the latest celebrity perfume or limited edition scent in Europe.

However, there are variations within the European market.

The UK consumer is splashing on the celebrity scents while the French, who are less celebrity obsessed and know more about perfumery have not latched on to the trend.

The UK market for celebrity perfumes has grown 2000 percent since 2004 and there have been over 30 such product launches so far this year, according to the UK retailer The Perfume Shop.

These figures indicate that the UK market for celebrity scents continues to march onwards.

The Euromonitor report also mentioned the emergence onto the market of perfumes that tap into the latest consumer trends in other markets like the scents produced by the US-based firm Arlyessence, which tap into the latest color and food fads.

Such products feed off a similar consumer to the celebrity perfume buyer because they are short-term launches whose commercial value lies in their ability to tap into the latest fashions.

As for the future, the Euromonitor report is optimistic for the global market predicting growth of 3 percent a year until 2011, while the value of the US fragrance market is expected to fall slightly by 1 percent annually.

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