Scent is one of the most evocative senses and the market researcher points out that there will be three key trends that will impact the global mass and premium markets in 2015: niche offerings, increased personalization, and innovations in retail experiences.
According to Nicholas Micallef, Beauty and Personal Care Analyst at Euromonitor, consumers are becoming more selective and price sensitive meaning they would rather purchase a low-cost premium alternative or even fine fragrance less frequently, than buy what is perceived as a homogenous scent.
This is seeing niche fragrances become more popular in 2015 as consumers search for individuality and increasingly look for an effective identity and the ability to relate emotionally and personally to a fragrance.
“In line with this, industry players are formulating fragrances with alternative ingredients to meet such demands – we are seeing fragrances formulated with sea salt and saffron for example, which are still alternative ingredients,” explains Micallef.
“Naturally big players are also trying to tap into this lucrative part of the business, as evidenced by Estee Lauder’s recent acquisition of Le Labo and Frederic Malle.”
However, it is worth mentioning that niche fragrances also come with their own set of challenges. More of them in the market means that competition intensifies and in order to meet the challenge, Micallef says fragrance players need sustained niche intent and avoid commoditising the scent to the extent where they compete on price.
Elsewhere, other personalisation we are seeing in fragrance products is in the packaging, an example being the ability to allow the consumer to personalise their own bottles.
For example, My Burberry (the most recent Burberry launch) allows consumers to monogram their own name on the bottle.
Personalisation doesn’t stop at just the product either says Euromonitor. The market researcher tips department stores and specialist retailers to increasingly compete on novel retail experiences to enhance the consumer purchasing experience.
“So we’ve got, for example, New York Saks Fifth Avenue which opened a fragrance library permitting consumers to learn about fragrance heritage behind fragrances and make a more informed decision,” says Micallef.
Curation will also become more prevalent, where consumers will be able to make more direct purchases based on a product that has been specially selected for having targeted qualities.
“Chanel and Dior are the best examples of this – their standalone stores in Covent Garden house the best product mix that is based on key heritage fragrances and fashionable new items, as well as best-selling ones,” he adds.
The video with Nicholas discussing these trends can be seen here.