After a number of major beauty companies reported holiday declines in their fragrance businesses late last week, it's clear that some areas of the category are in need of a shake-up, starting with mass market and celebrity fragrances.
We've known for some time that consumer interest in celebrity fragrances has been waning — hell, Taylor Swift can't even sell a perfume right now — and the dismal sales from Elizabeth Arden's star-studded portfolio last quarter only affirmed that fact. The company, which produces scents for Swift, Justin Bieber and Nicki Minaj, said Thursday that its celebrity fragrances are struggling, with sales for its overall perfume business dropping nearly 18 percent in the three months leading up to Dec. 31. Coty echoed the same sentiment, noting that the decline in celebrity fragrances is "in part driven by pressure in the mass fragrance market." (Prestige fragrances are sold at department stores, while mass fragrances are sold at drugstores and supermarkets.)
So are celeb-fronted juices all just dead weight at this point? Not necessarily. There are solutions for mitigating these losses, says NPD Group Beauty Analyst Karen Grant, one being to refocus marketing attention on younger audiences. That could mean toying around with the format of the fragrance and repackaging it as a travel size or roller ball, which also happens to be cheaper than a full-size bottle — good for budget-conscious young people.
"Celebrity fragrances do resonate best with the young, and everyone is trying to capture the millennial... The young person wants to be the celebrity," Grant says.
The good news is that when it comes to prestige, designer and niche fragrances are working well right now, despite the 8 percent decline in perfume sales that Estée Lauder saw over the holidays. Grant says that in that arena the consumer is getting more sophisticated, favoring European designers like Chanel and Dior in particular. (That said, the Estée Lauder-licensed Tom Ford line is doing rather well and helped offset the sales dips Lauder's namesake fragrances have been taking — but the man also represents American sophistication at its finest.)
Estée Lauder's struggle with its perfume business could be chalked up to the fact that it just hasn't been a priority in recent years. But the work of refocusing on fragrances is clearly underway: when the company went on an acquisition spree this fall, it added the high-end brands Le Labo and Frederic Malle to its portfolio. We'll have to wait to see how the two affect Lauder's overall sales, but we'd guess they'll do good things.
Whatever moves beauty brands choose to make, they should know that the way people are buying skews toward a zero-sum game at the moment.
"It's important to understand that people are spending, but they're making their choices more judiciously," Grant says. "Instead of getting 10 things inexpensively, they get one thing."
May the best scent win.