BW Confidential - Issue #12 - November/December 2012 - 41

The fragrance market saw fewer major launches over the past year, while the classics and the upper end of the prestige category continue to gain share. BW Confidential looks at the state of the market and how retailers are putting a renewed focus on fragrance by Alissa Demorest

mid an uncertain global economic context, the fragrance segment appears to be holding its own. The global fragrance market reached sales of $43.89bn in 2011, an increase of 10.6% over 2010, according to Euromonitor. The prestige fragrance business rose by 10.9% in 2011 to reach sales of $23.66bn, and is forecast to grow by more than 5% this year. Despite these healthy growth rates, industry players remain cautious. “While we are not facing the catastrophic situation that some had feared, we are in a market that is slower than the past few years in terms of sales and billing from retailers, so there is a certain amount of caution,” France-based Clarins Fragrance Group president Joël Palix tells BW Confidential. In Europe, which has been impacted by the ongoing Eurozone crisis, the market is having a tough time. Sales growth in value of women’s prestige scents in southern Europe did not pass the +3.5% mark last year. “The markets that are more dependent on perfumeries—France, Italy and Spain— are feeling the effects of the economic crisis and consumers’ dwindling spending power,” notes NPD Group senior vice president Beauty Martine Ringwald. Prestige sales in France, for example fell 3.1% in units and 0.6% in value for the first six months of 2012. However, the UK saw value growth of 10.7% last year for women’s prestige fragrances, reports NPD. Business in the US has also been robust. The prestige market last year grew in value by 11% to $2.8bn, while unit growth was up by 7%. The category has continued to perform well in 2012, although at a slightly slower pace, with prestige sales up 7% in in the January through June period. “We

haven’t seen that kind of growth in years,” comments NPD Group vice president and senior global industry analyst Karen Grant. Quiet launch period Those who gripe about the endless stream of launches had fewer reasons to complain this year. So far, 2012 saw fewer launches and,

“

We are seeing more in-store promotions offering deeper discounts for all products, be they gift sets or single fragrances. Few consumers today purchase without a discount

NPD Group senior vice president beauty Martine Ringwald

retailers say they haven’t seen any blockbuster successes. “For the moment at least, the market in Europe was not impacted by new launches,“ affirms NPD’s Ringwald. This year’s bestsellers were either classics boosted by the launch of major marketing campaigns, such as Miss Dior and J’adore, from Dior, while in the men’s arena One Million, Terre d’Hermès, Dior Homme and YSL’s Nuit de L’Homme continued to do well. In terms of notable new launches, retailers cite Guerlain’s La Petite Robe Noire (although it was introduced in 2009 in Guerlain boutiques, the fragrance went into wider distribution this year). n n n
41

”

November-December 2012 - N°12 - BW Confidential

credit: istock

BW Confidential - Issue #12 - November/December 2012

Table of Contents for the Digital Edition of BW Confidential - Issue #12 - November/December 2012