The Future of Fragrances: Capitalizing On Emerging Trends and Changing Preferences

The Future of Fragrances: Capitalizing On Emerging Trends and Changing Preferences published by Datamonitor in January, 2010. This report consists of 115 pages and the price starts from US $ 2995.

Introduction

Abstract

Introduction

Consumers are highly aware of the need to look and smell good in a society which is dominated by Visual Culture. Indeed, consumers are likelier to feel happier and more confident if they like the way they smell. The marketplace is becoming increasingly saturated with fragrance products, and the added pressure of a recession presents a challenge to industry players that this report seeks to tackle.

Scope of this research

• Detailed insights and analysis documenting the drivers and inhibitors of fragrances
• Analysis documenting the relative importance consumers place on appearance and data sizing the fragrance market
• Strategic conclusions combined with actionable recommendations for all industry players looking to fully capitalize on this segment
• Covers: France, Germany, Italy, Netherlands, Spain, Sweden, UK, US, Australia, Japan, South Korea, China, India, Brazil, Russia, UAE and Saudi Arabia

Research and analysis highlights

Consumers of both genders feel increasingly under pressure as a result of today' s Visual Culture. These consumers believe that appearance can positively or negatively affect their social standing, their ability to form relationships and even their career success.

Traditionally, fragrances (i.e. perfumes) have been more popular with women than men. However, men are becoming increasingly disposed to spending more time on their appearances and paying more attention to the products that they use. Capitalizing on this is a key opportunity for fragrance manufacturers going forwards.

Market saturation means that industry players are constantly striving for innovation. Unique aromas are being blended to provide consumers with new experiences, and concepts such as exclusivity and hedonism are being pushed to new levels. In addition, the use of natural ingredients and proving ethical credentials are becoming key differentiators.

Key reasons to purchase this research

• Consumer understanding: obtain a detailed understanding of consumer attitudes and behaviors towards fragrance product
• Market understanding: identify the key fragrance markets and product innovation trends in 17 countries across four territories
• Ideation: find inspiration for innovative formulations and positioning that takes advantage of consumers' desires for high quality prestige fragrances

Table of Contents

OVERVIEW

• Catalyst
• Summary

THE FUTURE DECODED

• INTRODUCTION: Fragrances are a major component of the overall personal care market
  • This report is one in a series of five category focused reports outlining the future of personal care trends
  • Fragrance preference induces a strong emotional attachment for consumers
  • Consumers view their scent as an important aspect of their personal hygiene, therefore making fragrance usage one of the most significant parts of their daily personal care regimes
  • The overall global fragrance market is subject to a number of drivers and inhibitors

• TREND: ‘Visual Culture' and an associated pre-occupation with appearance is the defining trend in the personal care space across product categories
  • Image is important to consumers even if they do not significantly feel societal pressure to look good (at least consciously that is)
  • There is scope for consumers to feel happier about their appearance, given the pressure to conform to demanding beauty ideals associated with contemporary society
  • Key takeouts and implications: Visual Culture is the core macro-trend influencing personal care habits

• TREND: Fragrance sales have been negatively impacted by the global economic crisis, but the future still holds promise
  • Fragrances have not suffered as much as other personal care products in the recession, and have even thrived in some markets
  • Key takeouts and implications: industry players in the fragrances space have faced inevitable recessionary pressures, but have been successful to a certain degree, particularly in emerging markets

• TREND: Most consumers are spending longer on their beauty regimes
  • Key takeouts and implications: the most significant growth in fragrance usage occasions going forward will occur in the high growth emerging markets

• INSIGHT: Fragrances are used by a majority of consumers, with a wide range of purchase motivators contributing to product choice
  • Using fragrances is something which a majority of consumers deem important to do on a daily basis
  • Sensory and value considerations are driving fragrance purchases in the majority of markets worldwide
  • Key takeouts and implications: consumers are motivated to purchase and wear fragrances for a number of reasons, including improving desirability, personal happiness and professional advancement

• INSIGHT: More importance is placed on branding than efficacy when choosing fragrances
  • Being both quality and brand conscious typically characterizes fragrance consumers, but there are notable variations by country and gender
  • Fragrance manufacturers need to recognize the ‘experience economy'
  • Key takeouts and implications: frequent fragrance users typically seek products that are both high quality and of a reputable brand, with the two rarely seen as being mutually exclusive

• INSIGHT: Fragrances, despite being associated with prestige and luxury, are not immune to consumers' intensifying value-for-money considerations
  • Value-for-money considerations heavily influence fragrance choice
  • Key takeouts and implications: with value-for-money considerations influencing fragrance product choice just like other beauty categories, industry players can not simply rely on the allure of the brand image to generate appeal

• INSIGHT: Ethicality and the use of natural ingredients are both somewhat important to fragrance consumers, but are typically regarded as secondary considerations
  • Key takeouts and implications: as the marketplace becomes more saturated with fragrance products, being able to champion ingredient, ethical or environmental benefits will grow in importance

• INSIGHT: Consumers value customization benefits so their fragrances feel more personal
  • Key takeouts and implications: customized benefits enhance consumers' perceptions that their fragrances match their personalities

• INSIGHT: Recent fragrance product marketing efforts have focused on appealing to the male demographic and embracing prestige
  • Key takeouts and implications: marketing in the fragrance category typically looks to embrace the prestigious nature of fragrances, but industry players should be wary of being too reliant on celebrities to create brand allure

• INSIGHT: More fragrances are incorporating active ingredients which provide consumers with additional benefits
  • Key takeouts and implications: the number of functional fragrance products is relatively low, but innovations will keep on occurring and igniting interest in the industry

ACTION POINTS

• ACTION: Continually inflate the prestige and cache of core fragrance brands
  • Marketing must justify the price premium and the prestigious aura of the brand

• ACTION: Utilize the internet and social media to create brand awareness and easier shopping options
  • There are several advantages to ensuring that consumers have access to a brand over the internet

• ACTION: Use natural/organic ingredients and promote ethicality to appeal to consumers
  • There are a multitude of reasons why natural and organic reasons can be beneficial to manufacturers

• ACTION: Use celebrities as a means of strengthening brand reputation rather than relying on them to sell individual products
  • Famous figures and ‘brand ambassadors' must be used carefully to enhance the brand

APPENDIX

• Methodology
• Further reading and references
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Consumer survey: the importance attributed by consumers to looking one' s best in day-to-day life and using fragrances to smell nice, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country, 2009
• Table: Consumer survey: the extent to which consumers feel under pressure to look good, in 15 countries across Europe, Asia Pacific, South America and North America, by country, 2008
• Table: Consumer survey: the importance that consumers attribute to looking their best in day-to-day life, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country, 2009
• Table: Consumer survey: the self-reported propensity to make sure beauty products are used up before replacing in order to save money, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country and product category, 2009
• Table: Market value of fragrances in Europe (US$ millions), by sub-category, 2003 - 2013
• Table: Market value of fragrances in North America (US$ millions), by sub-category, 2003 - 2013
• Table: Market value of fragrances in South and Central America (US$ millions), by sub-category, 2003 - 2013
• Table: Market value of fragrances in Asia Pacific (US $ millions), by sub-category, 2003 - 2013
• Table: Market value of fragrances in MENA (US $ millions), by sub-category, 2003 - 2013
• Table: Daily per capita fragrance usage occasions in Europe, by country, 2003 - 2013
• Table: Daily per capita fragrance usage occasions in Brazil and the US, by country, 2003 - 2013
• Table: Daily per capita fragrance usage occasions in Asia Pacific, by country, 2003 - 2013
• Table: Daily per capita fragrance usage occasions in MENA, by country, 2003 - 2013
• Table: Consumer survey: the importance that consumers attribute to “using fragrances to smell nice”, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country, 2009
• Table: Consumer survey: how influential consumers consider scent to be in their general choice of personal care or beauty product in 15 countries across Europe, Asia Pacific, South America and North America, by country, 2008
• Table: Consumer survey: the statement that European consumers believe best reflects their outlook on fragrances, by country and gender, 2009
• Table: Consumer survey: the statement that Brazilian and US consumers believe best reflects their outlook on fragrances, by country and gender, 2009
• Table: Consumer survey: the statement that Asia Pacific consumers believe best reflects their outlook on fragrances, by country and gender, 2009
• Table: Consumer survey: the statement that Saudi Arabian and UAE consumers believe best reflects their outlook on fragrances, by country and gender, 2009
• Table: Consumer survey: stated importance of materialism and experiential consumerism, in 15 countries across Europe, Asia Pacific, South America and North America, by gender and country, 2008
• Table: Consumer survey: perceived similarities between store brand products (e.g. supermarket own brands) and market leading famous brands, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country and FMCG product sector/category, 2009
• Table: Consumer survey: the importance attached to buying ethical or socially responsible products, in 15 countries across Europe, Asia Pacific, South America, and North America by country, 2008
• Table: Consumer survey: the importance attached to buying ethical or socially responsible products, in 15 countries across Europe, Asia Pacific, South America, and North America by country, 2008

FIGURES

• Figure: Scent can be classified by its ambience and congruency
• Figure: Fragrances have become an increasingly central part of personal care in MENA and the Americas
• Figure: Most consumers consider using fragrances to be nearly as important as looking visually attractive
• Figure: Despite recessionary times, consumers are still being influenced to spend good money on fragrance products
• Figure: Visual Culture is a term describing consumers' intense appearance consciousness and the widespread desire to project a more confident and favorable image to the wider world
• Figure: Appearance is important to consumers across geographic territories, regardless of whether they feel pressure to conform to the pervasive presence of Visual Culture in modern society
• Figure: Lauren Luke embodies the ‘everywoman' element of contemporary Visual Culture
• Figure: While most consumers attribute a high importance to looking good, fewer are actually happy with how they look themselves
• Figure: Scent bases products are important in enabling consumers to feel more physically attractive
• Figure: Outside of the emerging BRIC markets, Spaniards are the most reliant on beauty products to feel more confident about themselves
• Figure: Beauty is associated with success and opportunity, but workplace professionalism is deemed comparably less influential on the general personal care choices that consumers make
• Figure: Personal branding is a manifestation of the pervasive influence of the ‘Visual Culture' trend
• Figure: Japanese consumers are the least likely to wear fragrances in the markets covered in this research
• Figure: Gulf consumers place the most importance on using fragrances on a regular basis
• Figure: Females attach more importance to wearing fragrances to smell nice than their male counterparts
• Figure: The high influence of scent on general personal care purchases in Brazil also helps to contextualize the rapid growth rate in fragrance usage and the fragrances market in the country
• Figure: Consumers from outside of Europe are less likely to mirror the overall global consensus regarding the importance of various fragrance attributes
• Figure: Among the European consumer respondents surveyed by Datamonitor, Spaniards are the most value-driven when making fragrance choices in what is arguably a reflection of the testing economic conditions apparent in the country throughout 2008 and 2009
• Figure: Brazilian and US consumers display vastly different levels of enthusiasm for various fragrance product attributes, but the overall ‘hierarchy of influences' is broadly similar
• Figure: Value-for-money is the most important product attribute for the majority of consumers in Asia Pacific when opting for a fragrance product
• Figure: Like Brazilians, Gulf consumers display higher levels of enthusiasm for various fragrance attributes, but the overall ‘hierarchy of influences' is broadly similar to the global picture
• Figure: The Fragrance Foundation' s initiative created to entice consumers back to the ‘pleasures of fragrance' is appropriate given where sensory benefits sit in the overall ‘hierarchy of influences' shaping fragrance choices
• Figure: Europeans value brand above efficacy when making fragrance choices
• Figure: Brazilians believe branding and efficacy are far more important in fragrances than Americans do
• Figure: Chinese, Japanese and Korean consumers deviate from the global consensus in ascribing more importance to efficacy than brand when choosing fragrance products
• Figure: For Gulf consumers, choosing the right brand of fragrance is a major consideration, well above the global average
• Figure: The Spanish and French are the most brand conscious fragrance consumers in Europe, while Swedes are the least
• Figure: Brazilians are highly fashion orientated and heavy fragrance users and therefore pay a lot of attention to the fragrance brand, while US consumers perceive themselves to be far less so
• Figure: Indians are highly quality and brand conscious in what reflects the aspirational outlook of the country' s expanding middle class population
• Figure: Only a small minority of Gulf consumers do not use fragrances, with the majority caring about both quality and brand reputation
• Figure: Experiential consumerism and premiumization represent key trends driving ‘authenti-seeking' consumer behavior
• Figure: Consumers assign value to products based on a number of factors
• Figure: The biggest users of fragrance products also tend to be the most value-conscious
• Figure: Fragrances, despite being associated with prestige and luxury, are not immune to consumers' intensifying value-for-money considerations
• Figure: Fragrances are more brand driven than other major personal care categories, but not to the extent that industry players should be overly complacent about the possible emergence of private label
• Figure: Sustainability and ethics will drive a higher number of commercial and consumer decisions, driving change across the value chain
• Figure: For fragrance product choices, natural and ethical considerations are important in Italy, Russia and Spain, but the majority of other Europeans are less concerned than the global average
• Figure: Brazilian consumers find it important to choose fragrances that are both natural and ethical, but this is far less of a consideration in the US
• Figure: In the Asia Pacific region, Japanese consumers are particularly unconcerned with whether or not a fragrance product has ethical credentials and/or uses natural/organic ingredients
• Figure: More than half of consumers in the Middle East believe it is important that fragrances are natural and manufactured in an environmentally-friendly way
• Figure: Fragrances such as Baobab tout ethical credentials to appeal to the low, but significant proportion of consumers that take such issues into account when making purchase decisions
• Figure: On a general level, Australians in particular are guided by the ideology of ‘buying local'
• Figure: Customization benefits are likely to appeal to the high proportion of individualistic consumers who value the opportunity to be expressive and have products the better meet specific needs
• Figure: Customization benefits are likely to appeal to the high proportion of individualistic global consumers who value the opportunity to be personally expressive and have products the better meet specific needs
• Figure: Russians are the most interested in customization benefits in fragrances
• Figure: Brazilians are more attracted to the idea of customization features for fragrances than Americans
• Figure: In the Asia Pacific, the Japanese are the least pre-occupied by custom features
• Figure: The percentage of Gulf consumers who find customization benefits important in their choice of fragrances is nearly twice the global average
• Figure: Consumers can now use the internet to build fragrance profiles and receive recommendations based on the results
• Figure: Companies have adopted masculine marketing approaches to make fragrances more appealing to males who view it as a feminine product
• Figure: A product package that is interesting to touch may increase sales of the product even if the opportunity to touch does not provide additional product attribute information for the consumer
• Figure: Italian and Russian consumers are set apart from their European counterparts in their greater willingness to rely on endorsements when purchasing fragrances
• Figure: Brazilians deem packaging design of fragrances to be far more important than US consumers
• Figure: Recommendations from family and peers plays a large part in the fragrance purchasing decisions for consumers in China, India and Korea
• Figure: Gulf consumers are more than twice as likely as the average global consumer to rely on endorsements made by professional associations and/or celebrities
• Figure: A new breed of ‘functional fragrances' claim to offer consumers multiple innovative benefits in addition to simply smelling nice
• Figure: Indicative of growing interest in fragrance formulation, the product claims demonstrating the highest growth relate to the exclusion or addition of certain ingredients
• Figure: There was a marked increase in ‘Upscale' product tags in 2009, reaffirming the indulgent nature of the fragrance category
• Figure: There was little change in the most popular scents, suggesting that new product development has focused on the addition of benefits as opposed to the introduction of innovative scents
• Figure: Bottle design can emphasize the values of the fragrance within, with many focusing on elegance and premiumization
• Figure: Le Labo is promoting prestige and exclusivity with its very limited edition, local fine fragrance range
• Figure: Rewarding online consumers with free samples increases the likelihood of repeat business
• Figure: Following the example of the likes of LuckyScent.com could prove profitable
• Figure: A plethora of fragrances tout organic ingredients in order to appeal to consumers
• Figure: Some fragrances make environmental awareness their main selling point
• Figure: Celebrity endorsements are generally seen as unimportant by global consumers, especially in Europe
• Figure: Celebrity association with fragrances can potentially boost sales, but equally can have a negative effect

Press Release

Fragrance sales have been negatively impacted by the global economic crisis, but the future still holds promise

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