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With the economy in a recession, beauty manufacturers are looking to find new ways to innovate in order to attract consumers to fragrance in mass channels of distribution.
This story first appeared in the July 11, 2008 issue of WWD. Subscribe Today.
The overall fragrance category in the mass category has declined, according to ACNielsen. For the 52-week period ended June 14 for drug, food and mass, excluding Wal-Mart Fragrances, women’s fragrances declined 4.9 percent to $451 million, while men’s also decreased 4.7 percent to $141.8 for colognes.
A number of manufacturers agreed that consumers have become more conscious in terms of their shopping patterns when purchasing fragrance. Executives said that they have found that customers are looking more to affordable fragrances when seeking luxury items to buy.
“Consumers are more careful when deciding where to spend money, but I feel the mass channel is positioned well in a tough economy,” said Karen Huntoon, Elizabeth Arden’s director of global marketing in fragrance. “It’s about making sure consumers keep fragrance at the top of their minds and see it as a giftable item for holiday.”
Huntoon added that the company is focusing on supporting the business heavily for the holiday season.
Selective Beauty, which works with United Colors of Benetton, Ferrari and Swiss Army fragrance brands, is looking to bring added value to consumers with new gift sets and limited edition packaging.
“We’re looking to do deeper promotions to offer consumers stronger added value than the past,” said Gregory Black, vice president of marketing at Selective Beauty. “It’s about gifts with purchase that will get the product off the shelf and bring it to beauty aisles of mass retailers to draw attention.”
According to Michael Ferrara, senior vice president of marketing at Coty Beauty, the company’s sales are up about 10 percent. He added that Coty is looking to improve the in-store environment in terms of purchasing fragrance to make it more “shoppable.”
“It’ll never be like the department store environment, but we can do something to bridge the two,” said Ferrara. “Creating a more pleasurable environment will help transform the shopping experience.”
Retailers agreed that the fragrance business is going through a tough period. Some retailers are holding off on purchases.
“We are doing more with trial sizes, which have a lower retail [price] and we are asking vendors to bring designer and celebrity names to us faster,” said a retailer.
Sherry Saffert, category manager at CVS, said she’s pleased with the celebrity fragrance business in the store.
“We find our shoppers respond well to them and we hope to see more scents available to our stores,” said Saffert.
Celebrity and designer fragrances still seems to be driving the business.
“We’re continuing to see more prestigious celebrity fragrances driving the category, however, there’s definitely an opportunity for lower-priced lifestyle brands,” said Black.