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Fragrances - US - September 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Fragrances market continues to struggle
Figure 1: Total US sales and fan chart forecast of fragrances, at current prices, 2011-21
Confusion over ancillary products challenges fragrance brands
Figure 2: Ancillary product usage – Any use (net)^, June 2016
Splurge versus save mentality challenges sales
Figure 3: Retailers shopped, June 2016
Product launch claims fail to align with consumer interests
Figure 4: Share of fragrance product launches, by claim category, 2012-16*
The opportunities
Think outside of the box with retailing
Figure 5: Attitudes toward fragrances – Shopping frustrations, June 2016
Safe ingredients appeal to consumers
Figure 6: Trial and interest in fragrance ingredient innovations – Any use or interest (net)^, June 2016
Product innovations combat cost-savings mentality
Figure 7: Trial and interest in fragrance innovations, June 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Fragrances market continues to struggle
Most sales fall under women’s segment, men’s fragrances perform better
Scented personal care items challenge fragrances
Multicultural population benefits market while aging population slows growth
MARKET SIZE AND FORECAST
Fragrances market continues to struggle
Figure 8: Total US sales and fan chart forecast of fragrances, at current prices, 2011-21
Figure 9: Total US sales and forecast of fragrances, at current prices, 2011-21
MARKET BREAKDOWN
Most sales fall under women’s segment, men’s segment more stable
Figure 10: Share of US retail sales of fragrances, by segment, 2016
Figure 11: Total US retail sales of fragrances, by segment, 2010-16 (est)
Women’s fragrances dominate new launch activity, unisex offerings on the rise
Figure 12: Share of fragrance product launches, by subcategory, 2011-16*
Figure 13: Recent unisex fragrance launches
Fragrance sales struggle across all retail channels
Figure 14: Total us retail sales of fragrances, by channel, 2014 and 2016
MARKET PERSPECTIVE
Adults spend their beauty and personal care budgets elsewhere
Figure 15: Percent change of US retail sales of beauty and personal care products, by segment, at current prices, 2016*
Fragrances challenged by scented personal care, body sprays
Adults confuse ancillary products with scented personal care
Figure 16: Ancillary product usage – Any use (net)^, June 2016
Figure 17: Ancillary product benefits, June 2016
Opportunities for more natural, convenience claims
Figure 18: Share of fragrance product launches, by claim category, 2012-16*
MARKET FACTORS 
Aging population challenges fragrance sales
Figure 19: Population by age, 2011-21
Increasing multicultural population presents opportunities
Figure 20: Population by race and Hispanic origin, percent change, 2016-21
Figure 21: Fragrance expenditures, by race/Hispanic origin, February 2015-March 2016
KEY INITIATIVES – WHAT YOU NEED TO KNOW 
Men rely on mass brands, women turn to Victoria’s Secret, Bath & Body Works
Customized fragrances, natural claims reach consumers
Celebrity endorsements fail to engage consumers long-term
Added benefits, improved retailing change how consumers shop the category
BRAND USAGE OF FRAGRANCES
Men rely on mass brands over fine fragrances
Figure 22: Brands of aftershave or cologne used in the last 12 months, January 2011-March 2016
Victoria’s Secret, Bath & Body Works engage women with new product launches
Figure 23: Brands of perfume, cologne, or toilet water used in the last 12 months, January 2011-March 2016
Figure 24: Top 10 fragrance companies in new product launch activity, by share, 2010-16*
WHAT’S IN?
Layering kits and fragrance oils prove that customization is still king
Interest in natural claims is growing
Unique marketing strategies stand out against a sea of celeb endorsements
WHAT’S OUT?
Celebrity endorsements continue to struggle despite steady stream of launches
Splurge versus save mentality, expectation of low prices slow overall market growth
Figure 25: Email campaign performance of select special promotion fragrance campaigns, 2016
WHAT’S NEXT?
Unique scents inspire consumers
Added benefits encourage additional usage occasions
Retailers increase trial beyond magazine samples and scent testing stations
THE CONSUMER – WHAT YOU NEED TO KNOW 
Occasional users slow market growth
Shoppers influenced by convenience, low price points when choosing a retailer
Subtle scents pique consumer interest
Mixed attitudes highlight personal nature of scent preferences
Ingredient claims, customizable scents are in demand
FRAGRANCE USAGE
Despite high market penetration, sales growth slowed by occasional users
Figure 26: Fragrance usage – Any usage and regular usage, June 2016
Higher engagement among younger adults
Figure 27: Fragrance usage – Any use, by age, June 2016
Hispanic, Black adults more engaged with fragrances
Figure 28: Any fragrance usage (net) - Any and regular usage, by race/Hispanic origin, June 2016
RETAILERS SHOPPED
Fragrance purchases made at a variety of retailers
Low price points, convenience drive purchase locations
Online retailers are reaching shoppers, but face challenges
Figure 29: Retailers shopped, June 2016
Younger adults shop lower-priced retailers, older adults prefer department stores
Figure 30: Retailers shopped, by age, June 2016
Figure 31: Retailers shopped, by race/Hispanic origin, June 2016
FRAGRANCE CHARACTERISTICS
Subtle scents have widespread appeal
Figure 32: Fragrance characteristics – Any rank (net)^, June 2016
Long-lasting claims are top-of-mind
Figure 33: Fragrance characteristics, by ranking, June 2016
Strong claims resonate with men, women seek specific scent profiles
Figure 34: Fragrance characteristics – Any rank (net)^, by gender and age, June 2016
Figure 35: Fragrance characteristics – Any rank (net)^, by race/Hispanic origin, June 2016
ATTITUDES TOWARD FRAGRANCES
Mixed attitudes highlight personal nature of scent preferences
Shopping experience leaves room for improvement
Ingredient concerns relatively low, but present opportunities
Figure 36: Attitudes toward fragrances, June 2016
Younger consumers express dissatisfaction with scents
Figure 37: Attitudes toward fragrances, by age, June 2016
Hispanics seek unique fragrances
Figure 38: Attitudes toward fragrances, by race/Hispanic origin, June 2016
TRIAL AND INTEREST IN PRODUCT INNOVATIONS
Ingredient claims, customization appeal to consumers
Figure 39: Trial and interest in fragrance innovations – Any use or interest (net)^, June 2016
Figure 40: Trial and interest in fragrance innovations, June 2016
Younger consumers, older women interested in innovations
Figure 41: Trial and interest in innovation – Any use or interest (net)^, by 18-34, 35-54, male 55+ and female 55+, June 2016
Opportunities to reach Hispanics, Black consumers with fragrance innovations
Figure 42: Trial and interest in innovation – Any use or interest (net)^, by race/Hispanic origin, June 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations
APPENDIX – MARKET 
Figure 43: Total US retail sales and forecast of fragrances, at inflation-adjusted prices, 2011-21
Figure 44: Total US retail sales and forecast of fragrances, by segment, at current prices, 2011-21

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