The Rise of Niche Fragrance.
High-end fragrance on the up
Sales of fragrance grew by 1.6% last year in the UK with consumers spending £1.25bn on perfumes. However, sales of celebrity endorsed fragrances fell by 22%; not great news for the likes of One Direction and David Beckham. This would suggest that consumers are turning their back on the “tackier”, mass market element of fragrance. In sharp contrast to this, sales of higher end fragrances are flourishing.
Customers are being more selective
This dramatic shift has seen a polarisation in the fragrance market. At one end of the spectrum consumers are seeking value for money whilst at the other end consumers are actively seeking a higher quality, bespoke product. This selectiveness means that consumers are spending more money, but less frequently. Last year’s 6% increase in the sale of couture fragrances, such as Prada and Dior, proves that consumers will spend more on the right scent.
Growth in the premium end of the market has also seen a sharp rise in appreciation of niche fragrance brands, which are enjoying strong sales due to the popularity of their artisanal scents. They offer an antidote to mass produced fragrances and the cosmetic heavy weights have been quick to identify this trend and adapt their offer accordingly. Estée Lauder led the charge in 2014 by purchasing the fragrances houses of Editions de Parfums Frédéric Malle and Le Labo.
It’s all about a personalised in-store experience
Many of these niche fragrance brands are confined to concessions within the security and comfort of London’s luxury department stores. However, trail blazer Le Labo has embraced expansion and now have 4 standalone boutiques in the capital’s most fashionable areas. Launched in 2006 in New York, Le Labo, with its 15 genderless fragrances and candles, has gained a cult following around the world. Whilst their products can be purchased online, it’s their in-store experience that remains their biggest lure and has fuelled the need to have a bricks and mortar presence where they give their customers a personalised experience rather than simply buying from a department store counter. Assistants blend a chosen fragrance on the spot and each bottle is finished with customised labels.
Bricks and mortar is the key to clever engagement
Key to Le Labo’s success is cleverly matching their brand to their in-store experience, with London’s hipsters gladly spending £180 for 50ml of Santal 33, effectively scented water!
Consumers want to go in store so that can become fully engaged with the brand and be proud to walk out of the shop with a Le Labo bag.
This clever combination of branding and in-store experience makes the case for successful bricks and mortar retailing.
Coming soon to a high street near you
Due to the high price that niche fragrances command, the consumer will naturally begin to expect a better costumer experience and level of service. As this next level of service may be difficult to deliver in a department store, the need for standalone stores will increase. With this segment of the market expected to grow, it could pave the way for the perfumery to become a regular feature of the high street as niche brands compete to keep their costumers returning to buy their unique scents.
Associate - Retail