The category grew 82 percent year-over-year, from January to June 2021.
“It’s completely insane,” she continued, explaining that sales were driven by more expensive products with a stronger concentration of perfume oil, eau de parfum rather than eau de toilette. “The consumer psyche plays a very important role.”
Last year was a time to escape and consumers found comfort in scent, she added. “But it seems to be that for 2021, it’s really about starting fresh, new beginnings.”
NPD Group, which analyzes U.S. sales in prestige beauty, also compared this year’s sales so far with those in 2019.
“That’s a more apples-to-apples comparison in terms of where the market should be,” said Jensen. “And even when we look at it that way, fragrance is up 35 percent, which is, the only word I can think of is unprecedented.”
The company conducted a survey this year asking consumers why they had purchased fragrance in the last month, with half of the group saying the bottle “was a treat for themselves.” It was the number-one reason given, followed by “a gift for someone else,” at 20 percent.
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“To see a big category like fragrance, which is a quarter of total volume, so it’s 25 percent of total prestige volume, growing at that rate is pretty incredible,” said Jensen. (The other major categories in prestige are skin care and cosmetics, which has been down due to COVID-19.)
Since 2019, there have been two major trends: larger bottles, 4.2-oz and above, are selling well, as are already established scents.
Fragrance launches are not a large percentage of sales, representing about 8 percent of sales in total, explained Jensen. “While they do drive excitement and bring innovation, really the bulk of the volume and the growth is coming from what exists.”
As a result, there’s been a series of known luxury brands in the space — like Dior and their Miss Dior perfume and ads, featuring actress Natalie Portman — relaunching scents with new formulations and campaigns.
But artisanal scents are the focus, created by niche companies like Creed Boutique Beverly Hills.
According to Stephanie Wissink of financial services company Jefferies, “craft fragrances” are expected to continue to capture “incremental share.” Since 2019, there’s been a rise of artisanal perfumes and less celebrity-branded launches on the market (along with more attention put on body and home fragrances, as well as “clean” goods).
“They’ve always been kind of a strong performer in the market, but they continue to be very strong,” Jensen said of artisanal brands. “What’s interesting is that they also command a higher price point. So, you’re seeing the theme here…Fragrance, even within prestige beauty, is probably the most luxury of the categories, because it has the highest average price among everything. And then within fragrance, it’s all of the higher price items that are doing well. So, it’s luxury within luxury within luxury. It’s the ultimate luxury, which is really the ultimate treat for yourself.”
When does the bubble burst?
“That’s the million-dollar question that really nobody knows,” said Jensen.
The growth isn’t sustainable, she added: “I can say that since its peak, which was in March of this year in terms of growth, we have seen a downward trend [in fragrance]. Now, that said, it’s still a very healthy double-digit growth.”