Byline: Laura Klepacki

WAYNE, N.J. — Target is taking a bold stand in an attempt to revive the flagging fragrance category at mass, and whisking prestige fragrances out of the shadows and displaying them front and center.
In a move that suggests upscale brands have secured a permanent place in mass market beauty, the innovative discounter has unveiled a display that presents designer fragrances in new carded blisterpack packaging — just like lipstick — and in a more prominent department location.
That drugstores and discount chains carry selections of prestige scents is not a new phenomenon. For at least 10 years, prestige manufacturers have tried to combat the flow of their merchandise into unauthorized channels. Clearly, that effort has failed.
During a recent visit to a Target store in Wayne, N.J., there was a prominent end-of-aisle display at the entrance of the beauty department. On display were 36 fragrance facings — six across and six down — with at least two boxes per peg. Brands included Calvin Klein’s CKOne and Eternity, Giorgio Beverly Hills and Wings, Hugo Boss for Men, Elizabeth Taylor White Diamonds, Davidoff Cool Water Woman, Liz Claiborne, Curve and Candies, Michael Jordan, Christian Dior’s Fahrenheit, Elizabeth Arden Red Door, Halston, Nautica, Lagerfeld and White Shoulders. The display, which went up in early March, was nearly cleaned out after only two weeks.
Executives at Target declined to comment or participate in the reporting for this article.
According to conversations with executives at U.S. distributors of prestige scents, and other industry sources, Target’s program could be a symbol of what’s to come. Sources said Elizabeth Arden Inc., formerly FFI, has been working with Target to develop the new merchandising vehicle for its designer fragrances. Although Elizabeth Arden did not return calls for comment, at least two other distributors said they are also contemplating programs that would give prestige scents more prominence at mass.
Before Target emphasized its prestige scents with the new peg board display, the chain had kept the secondary-sourced merchandise in an out-of-the-way glass case in the jewelry department.
The fragrances remain in their original boxes but have been placed in a hard plastic clamshell case that can stand upright in a countertop display or hung on a wall. A cardboard insert of soft pastel blue and yellow reads: “Designer Fragrances” and also tells whether it is for a man, woman or unisex.
Richard DeSantis, vice president of sales for the fragrance division of Quality King, a distributor, said his company is also thinking about creating new merchandising programs for its retail accounts. “We want to find more effective ways to capture customers,” said DeSantis. “They are not being properly addressed.”
Whether speaking of traditional mass market brands like Coty’s Stetson and New Dana’s Chantilly, or gray market products like CKOne, fragrances are high ticket items which many retailers have kept under lock and key.
Innovations in source tagging by both Sensormatic and CheckPoint Systems have led some retailers, like Target and Eckerd, to test presenting fragrance in open-sell environments. A large outer package like the one used in Target’s program is also designed to further thwart theft.
“The [mass] fragrance business has been soft for the last couple of years and most major suppliers are taking a more proactive approach to jump start the business,” said DeSantis. “When fragrances are merchandised under glass, you almost have to beg to get someone to help you.”
An industry executive familiar with the Target program, who asked not to be named, remarked that while the plastic covering may detract from an upscale presentation, to some shoppers it represents a package that has not been previously handled.
While there have been no widely publicized lawsuits recently, fragrance manufacturers have challenged mass retailers on the handling of their brands. In 1995, a successful suit filed by Parfums Givenchy to stop Drug Emporium from merchandising its products nearly went to the Supreme Court, when the drugstore chain mounted a losing appeal. But the court opted not to hear the case.
Arthur Gallego, spokesman for Lancaster Division of Coty Inc., maker of Davidoff Cool Water, said the “issue of diverted goods and gray market merchandise continues to impact consumer goods companies, including Coty Inc., on a global basis.
“In this situation, the customer loses out also, because while the merchandise may be less expensive and more easily accessible, the product and the brand are not presented with consistency, or with the proper image,” said Gallego.
He said Coty has an inventory control and coding system in place, but the laws impacting whether or not that coding can be removed in different countries does impact efforts to police diverted and gray market issues.
He said regarding the Davidoff Cool Water brand, “we are exercising greater control over distribution and have found increased organic growth for the brand in the past year, men’s and women’s are both up double-digits, with no increase in our prestige distribution.”
Representatives of the other brands on display at Target did not return phone calls for comment.
Eric Thoreux, president of Coty Beauty, the company’s mass market division and the leading mass market fragrance company, said whether he likes it or not, he has come to accept that designer fragrances are in mass doors.
“I have diverted prestige fragrances as a competitor in every single chain and I have learned to live with that and to compete effectively,” said Thoreux. He pointed to new launches such as Adidas Moves and American Woman as new fragrances designed to appeal to young, trendy fragrance shoppers.
“Only around 20 to 25 percent [of shoppers] are buying fragrance in mass,” noted Thoreux, who is supportive of retailer efforts to try to improve fragrance shopping activity. “Any initiative that gives even more reason to go and look and shop and browse, it is, for me, great news.”
But aside from Coty launches, there has been little product news in the mass fragrance market compared to the innovation that churns in prestige.
This week at the Cosmetics Executive Women’s Annual Beauty Awards, entries in mass fragrance categories were slim. For best new men’s scent in mass distribution, there were only two competitors Avon with Perceive and Coty with Aspen Discovery. Avon won. In another mass fragrance category, Coty competed against itself.
Annette Green, president of the Fragrance Foundation, said that the concept of distribution channels has become “awfully blurred.”
“What is mass anymore? What is class? It is really a big question whether we can use those terms anymore,” said Green, whose organization runs the Fifi’s, the industry’s annual fragrance competition.
She said she will likely change the award categories for 2002 because they no longer reflect what is happening in the marketplace.
“It is a tidal wave and you can’t hold it back,” said Green. Pointing to the impact of Napster, “It is happening in the music industry as well. People are controlling their distribution. They are buying where they want, however they want.”