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What to Watch: Focus on Fragrance

Beauty companies will continue homing in on newfangled ways to experience perfume.

In 2019, companies will continue homing in on newfangled ways to experience perfume as the fragrance category, historically the beauty industry’s cash cow, continues to lose ground to its rivals, the skin-care and makeup categories.

In today’s selfie-ready, Instagrammable, beauty tutorial-filled world, fragrance’s multifaceted — yet invisible — complexion gets comparatively little play, to the detriment of its business.

According to data from market research provider Euromonitor International, worldwide fragrance sales in 2017 grew 5.5 percent to $49.38 billion versus color cosmetics’ 7.1 percent gain to $66 billion and skin care’s 6.1 percent advance to $124.36 billion. Last year, skin care’s pace picked up even more, executives said.

So beauty companies are focusing on new ways to create and sell fragrance.

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L’Oréal, for instance, in December revealed it had launched a venture capital fund called BOLD Business Opportunities for L’Oréal Development, which is taking minority stakes in start-ups with high growth potential. Its first investment was in Sillages Paris, a French start-up with an online service to create customized fragrances based on artificial intelligence and machine learning with input from perfumers.

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“What we wanted to do was revise French high perfumery through digital,” the company’s founder, Maxime Garcia-Janin, told WWD.

“We haven’t changed the way of creating and selling fragrances for the past 40 years,” he continued, ticking off mainstay elements such as ambassadors and retailing through perfumeries, which have fast been shedding clients — not least of which are Millennials. “So I was like ‘I think there is something to do here.’”

Also in December, Coty Inc. debuted a multisensory fragrance discovery experience in Buenos Aires that uses mixed reality technology for people to better pinpoint their ideal scent through senses and emotion rather than the traditional semantics of luxury fragrance.

People wear a virtual reality headset, choose a textured scent stone and then are propelled into an environment linking sight with fragrance and sound. Beauty consultants can use resulting feedback to recommend a perfume. The response to Coty’s test has been positive, and so the company is now looking to scale the experience in different geographies and retailers.

Earlier in 2018, Puig said it was shifting its focus from storytelling to enriching consumers’ overall experience with a new collaborative platform, called Puig Features. It is three-pronged, involving new “disruptive” business models, partnerships with companies and taking minority stakes in third-party enterprises related to the fragrance category.

Puig said there is plenty of frustration in the purchase and usage process related to perfumes. To help combat this is the Airparfum dispenser system using a touch screen, recently created under Puig Features. It has a patented device that transforms previously purified air into fragranced air, allowing consumers to sample perfumes in-store without the risk of olfactory fatigue. Puig believes that the technology, the seeds of which were planted by investors who approached the company, will revolutionize point-of-sale testing.