THE LAUNCHES ARE FLOWING BUT SALES ARE STILL LAGGING
Byline: FAYE BROOKMAN
NEW YORK — Last year’s flood of new mass market scents has resulted in only a trickle of sales. That’s the verdict from many retailers, who said that they are still waiting for a rebound in the mass fragrance market. Although last year saw an increase in major mass launches, retailers maintain that the new contenders have not yet revitalized sales.
In fact, many chains have pared back space devoted to traditional mass brands in order to clear more room for diverted and alternative designer fragrances. The lack of hits had an impact on Christmas — the most important fragrance selling period in mass doors. While many retailers predicted increases in the low double digits, sales last Christmas rose only 6 to 8 percent above 1993. Many retailers credit secondarily sourced scents, which yield lower gross margins than those retailers obtain on a direct basis, with generating most of 1994’s gains. But buyers were quick to add that without the stable of new fragrances introduced in 1994 and some new entries, which bowed earlier this year, their fragrance business would be even more dismal. “Without the new fragrances, our fragrance business would have been terrible last Christmas,” said Sheri Ralston, buyer for Thrifty PayLess in Wilsonville, Ore., who added that without the new scents, the chain’s numbers would have been down in comparison to 1993. Among the new launches that kept her business afloat were Vanilla Musk and Longing from Coty, and Revlon’s Fire & Ice. Alternative designer fragrances also added to results at PayLess. Many retailers noted that the high stakes associated with introducing a mass market fragrance has been keeping most players, with the exception of Coty, out of the fray for the last several years. Even fragrances backed with advertising budgets as high as $10 million couldn’t necessarily compete with the mass market’s slew of diverted prestige fragrances on one end and designer knockoffs on the other. The industry hit rock bottom in 1993, with Coty’s Vanilla Fields being the only women’s scent introduced that year. Its phenomenal success brought a herd of competitors and helped renew interest from vendors in the mass business. Among last year’s new contenders were Coty’s Longing and Vanilla Musk, Revlon’s Fire & Ice and L’Oreal’s V. There were also many vanilla additions, such as Renaissance’s French Vanilla and Naturistics’ Naturally Vanilla. The new vanilla scents were among the top performers at chains such as Thrifty PayLess of Wilsonville, Ore.; Revco D.S. in Twinsburg, Ohio, and Super D in Memphis, Tenn. Unfortunately, none of the major introductions — Longing, Vanilla Musk, V and Fire & Ice — produced strong enough volumes to be considered overwhelming successes. “They layer on some business in a category that is so flat, but they don’t do much to help us from an inventory business,” said Joan Zukor, director of cosmetics for Western Drug Distributors, which operates Drug Emporium stores in the Northwest.
She explained that although the new fragrances bring in some additional sales, they actually add items to a category that already has too many underperforming stockkeeping units. That’s made mass fragrances an area that is not turning rapidly enough to warrant as much space as most mass operators give it. One of the main problems with the category is that escalating prices of mass scents have pushed their price tags closer to those of diverted fragrances, Zukor added. Longing, for example, was sold in mass stores for between $17 and $20. “Why buy a mass scent when for a couple of bucks more you can have Sunflowers?” Zukor asked. Sunflowers made the bestseller list at drugstore chains, including Phar-Mor, Love’s and Drug Emporium. Another hurdle for the big mass launches, buyers reported, came from a lack of promised support. Several buyers said Revlon cut back and delayed its advertising behind Fire & Ice. “We were ready for the advertising in August and they pushed it back to October,” one buyer said. “That hurt early sales.”
A spokeswoman at Revlon denied the company had ever planned to advertise in August, saying the first print ads ran in October books in order to coincide with the product hitting the shelves in September.
She also noted that Revlon pushed up it TV campaign, originally slated for an October premier, to begin airing in September.
Retailers said manufacturers need to employ more of the hoopla associated with prestige launches for mass market introductions, if the category is to be rescued from its slump. “Who hasn’t heard of CK One?” asked Penny Wade, category manager for Harco Drug in Tuscaloosa, Ala. “I just don’t see that kind of support when it comes to the mass brands.” Wade also mentioned that many mass vendors have not made value enough of a priority. “The mass manufacturers are off-base with some of the new launches,” she said. “They haven’t begun to spend what Arden is spending on Sunflowers, but they think because they have a nice-looking bottle and good point-of-purchase materials, consumers will pay $20 for the fragrance. “Why would the consumer pay that much when they can buy Sunflowers for a few dollars more?” she added.
A few chains are taking things into their own hands and trying to create excitement with gift-with-purchase programs. Harco offers gifts from International Silver, such as picture frames, while Simon David, a supermarket chain, provides free gift wrap with cosmetics purchases exceeding $10. Despite a less-than-sensational debut for the new players in 1994, the deluge of new scents is even stronger for 1995. “We’re seeing more launches in 1995,” PayLess’s Ralston stated. To get an early jump on sales, several of the new contenders are being launched in time for Mother’s Day. “We’re seeing more products that lend themselves to Mother’s Day promotions,” said Judy Wray, senior buyer for Revco D.S. of Twinsburg, Ohio, adding that she hopes Mother’s Day will help take the pressure off the fourth quarter. Among the lines she plans to tout for Mother’s Day are Lady In Yellow, a Sunflowers alternative to Lady In Red, and Classic Gardenia from Renaissance Cosmetics. Wray will feature Lady In Yellow in special end-aisle displays for Mother’s Day decorated with big sunflowers. Lady In Yellow will also offer a unique flower seed gift set for Mother’s Day. Renaissance’s Classic Gardenia is also expected to get some early sales during Mother’s Day. “We’re dropping scent strips of it into our in-store flyers,” said Robert Germano, president of Harmon Discount Stores in Cedar Grove, N.J. “I think this is an example of a new fragrance and support material done right.” Zukor at Drug Emporium is also bullish about several other launches that will take place this year. “I’ve just seen Perfumer’s Workshop’s Les Girls and I’m intrigued,” she said. “I’ve been a fan of single-note florals. I think it is kicky and fun.” Les Girls consists of five single-note fragrances: vanilla, lilac, citrus, gardenia and peach. The line will be sold exclusively in drugstores. The fragrances were created to be worn alone or in as many as 250 different layered combinations, according to company executives. Buyers said they hoped to see multiple purchases. Zukor also mentioned several classic brands with new ownership as having potential. She cites Renaissance Cosmetics’ efforts behind Chantilly as one example. Last year, the company created new advertising to reestablish the Chantilly name. The new tagline is: “Chantilly: The Spray Lingerie.”
“[Renaissance] did a good job with its Spray Lingerie campaign for Chantilly,” Zukor said. Chantilly was just one of several classic scents Zukor cited as generating in-store traffic last Christmas. “We saw a return to some classics in our stores, and we also did well with classics that used to be department store brands, like Ciara,” Zukor said. Many fragrances once sold exclusively in department stores, now available at mass, are also expected to sell well during 1995. These include Je Reviens from the House of Worth and Raffinee from Renaissance, which one top combination supermarket and drugstore retailer said will “raise our fragrance credibility.” Mass buyers see the retreading of department scents, such as Ciara, as a trend since not as much time and effort needs to go into building the brand as with a new launch. Ciara, which was launched in 1973 with limited distribution in fewer than 500 department store doors, is seen by retailers as a bright spot for Revlon, whose fragrance record has been spotty over the last 10 years.
Many buyers said that they are now insisting that Revlon pare its scented offerings down to only those that turn, while eliminating disappointing entries, such as Downtown Girl and Unforgettable, from the mix.
Now Revlon is hoping to capitalize on Ciara’s cult of loyal followers by launching Ciara Femme Fatale, a line extension intended to draw younger customers. Revlon first used this strategy last year when it augmented the Charlie franchise by adding Charlie Red. June Taylor, buyer for Phar-Mor of Youngstown, Ohio, applauds this direction. “There is no denying the success of the Coty Stetson brands and the Calvin Klein and the Elizabeth Taylor department store franchises,” She said. “It is definitely a way of capitalizing on brand awareness.” Revlon has also created a fragrance fixture housing the scents and testers that can be wheeled around the store. Retailers hope the fixture can be used to expose more customers to fragrances. “They’ve done so well with new cosmetics launches, we hope to see a similar trend in fragrances,” Ralston said. Retailers also hoped to see even more support from Prince Matchabelli, which helped revive Aviance and Wind Song last year. Under the direction of Mark Laracy, president of Parfums de Coeur and now Prince Matchabelli, Aviance and Wind Song were repackaged and backed with a distinctive ad campaign, including a lingerie-clad woman singing she plans to have an “Aviance night.” Growth is coming at the other end of the spectrum, too, from the knockoff companies. “We have the alternative designer fragrance guys knocking our doors down with new launches,” Zukor said. Many of the copycats have jumped on the CK One bandwagon. To date, there have been at least eight imitations of the scent, which reportedly produced sales of $58 million last year. “One of the best is Delagar’s Gender One,” said one buyer. “It has the bottle down pat.” The success of CK One has also encouraged other vendors to launch unisex brands. Richard Barrie Fragrance Inc. of Orange, Conn., for example, is aiming for both male and female customers with its new Melrose Place scent.
In addition, mass market suppliers are trying to build fragrance volume by targeting shoppers who haven’t traditionally bought alternative designer fragrances — customers in their 20s and early 30s. One of the most aggressive is Fragrance Impressions, which hopes to encourage these shoppers to try knockoffs with its new Designer Mists. The fragrances are modeled after scents such as Sunflowers and CK One that attract so-called Generation X shoppers. The alternative designer scent manufacturers have also been busy preparing less costly versions of Yves Saint Laurent’s Champagne and Arden’s Sunflowers. Designer Quality Impressionists, for instance, has its version of Champagne called Chambord. Despite new mass launches, secondarily sourced fragrances continue to be an important area for the mass market. “The sales trend is moving in favor of prestige fragrances,” Phar-Mor’s Taylor said, noting that Phar-Mor has added more space in its stores for prestige fragrances. Drug Emporium has also significantly pared back its space and inventory commitment to mass fragrances in favor of secondarily sourced goods. Lines of distribution on the diverted scents remain open, Zuker said, who added, “The only two tough to get are Lauder and Calvin Klein.”