Whilst COVID-19 has created a more challenging environment for fragrance brands, the category had lost its lustre prior to the outbreak, with value sales falling 4% to £1.4 billion in 2019. Online growth is exacerbating savvy shopping behaviours as 29% of adults now shop online for fragrances, whilst 39% of fragrance consumers shop around to get the best prices.

COVID-19 has caused significant disruption in the fragrance category. Social distancing restrictions have impacted usage whilst ongoing anxieties around spending time in stores have impacted fragrance discovery. Travel restrictions have wiped out duty-free spending and subdued demand for holiday beauty.

The rise of online beauty during 2020 is particularly problematic for the category as fragrances are notoriously difficult to sell online. A digital overhaul is needed to aid online fragrance discovery, with investment into digital customer service tools and an overhaul of social media strategies needed to engage today’s fragrance consumer.

Compared to other beauty categories, the masstige disruption in fragrances has been relatively limited to date. However, this presents brands with opportunities to reach new consumers and cater to a heightened demand for value for money in the post COVID-19 era. Embracing the rise of masstige with new brand partnerships and affordable fine fragrance formats can future proof a brand’s proposition and help them maintain their price integrity amidst intense price competition.

• The impact of COVID-19 on the fragrance market.

• How usage and shopping habits have changed in response to COVID-19.

• The value of individual segments and brand performance in 2019.

• Launch activity and opportunities for 2020.

• Fragrance discovery and the evolution of the purchase journey.

• Brand preferences and opportunities for premiumisation.

This Report examines the UK market for men’s and women’s fragrances, including parfum, eau de toilettes (EdT), eau de parfums (EdP) and colognes:

• Parfums or perfume extracts have a 15-40% concentration of essence.

• Eau de parfum (EdP) have a 10-30% concentration of essence.

• Eau de toilette (EdT) have a 5-20% concentration of essence.

• Colognes, often referred to as eau de cologne (EdC), have a 3-5% concentration of essence.

• Eau fraiche have a 1-3% concentration of essence.

Also included within this Report are body sprays (fragrances in a spray can or spritz format) for men and for women.

Unless otherwise specified, throughout this Report the term ‘fragrances’ refers exclusively to perfumes (eg eau de toilette, eau de parfum, parfum), eau de cologne and aftershaves. This includes perfumes, eau de cologne and aftershaves in solid, oil and gel formats, but excludes body sprays.

This update on the impact that COVID-19 is having on the market was prepared on 12 August 2020.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks.

The Health Protections Regulations 2020 came into effect on 15 June allowing the reopening of all non-essential stores in England and the mandatory use of face masks on public transport. Pubs, restaurants, hotels and hairdressers reopened on 4 July and beauty salons reopened on 13 July, whilst the use of face masks in shops and supermarkets became mandatory on 24 July.

Our economic assumptions are based on the illustrative scenario included in the Bank of England's Monetary Policy Report, released on 7 May 2020 (https://www.bankofengland.co.uk/-/media/boe/files/monetary-policy-report/2020/may/monetary-policy-report-may-2020.pdf). The scenario suggests that UK GDP could fall by 14% in 2020, recovering by 15% in 2021, and that unemployment will reach 8% by the end of the year, easing slightly to 7% by the end of 2021. The current uncertainty means that there is wide variation on the range of forecasts, however, and the numbers presented in the BoE's illustrative scenario are at the more pessimistic end of the spectrum.