Fragrance company executives in Western Europe are most likely relieved to have 2012 behind them, after the market flat-lined at $12.8 billion, according to Euromonitor. Both premium and mass fragrance struggled to reach parity with 2011, which was a far more buoyant year for the market. It was not all doom and gloom in Eastern Europe, where sales bounced by 5.3%, although the market here is much smaller at just over $4 billion. Russia was a particular bright spot, where fragrance accounts for some 18% of the total beauty market, reflecting a growing consumer interest in luxury goods.

NPD Group, which focuses solely on the premium fragrance sector, paints a similar picture for Western Europe where sales were thwarted by the fragile economies of Italy and Spain. Overall, European premium fragrance dropped 1.1% in 2012, following a 4.5% increase in 2011. Spain was the most affected, as sales fell 6.5%, followed by Italy down 3.5% and France slipping back 1% year on year. However, the UK proved to be a definite bright spot, with sales in 2012 increasing by 3%.

While the ongoing economic downturn undoubtedly dampened sales of fragrances, the lack of major new launches in Europe has also impacted negatively on the category. Classics have their place, but it’s newness that creates a buzz for boosting sales.

In previous years, there would always be one or two blockbuster fragrances, but NPD noted far fewer launches in 2012. La Vie est Belle by Lancôme, fronted by Julia Roberts, was the number one women’s fragrance in Italy and Spain; Marc Jacobs Dot hit the top spot in the UK, and Guerlain’s La Petite Robe Noire was the leading new fragrance in France.

In the men’s market, NPD recorded Dolce & Gabbana’s The One Sport as the number one fragrance in Italy and Spain. Diesel Only the Brave Tattoo was the leading men’s launch in France, while in the UK it was James Bond 007, which tied in with the 50th anniversary of the Bond movie franchise.

Best Sellers by Country
French women set great store by classic fragrances made by French brands, which invariably top the leader board. Long-established companies, including Dior and Chanel, invest heavily with new media, celebrity endorsements and new product introductions. NPD recorded the top five in France as Dior J’Adore, Chanel No.5, Guerlain La Petite Robe Noire, Thierry Mugler Angel and Coco Mademoiselle. French brands are also popular in the French men’s fragrance market, although Spanish Paco Rabanne tops the list with 1 Million.

The UK consumer is more open to new launches, although Chanel is a solid favorite. For many years, Coco Mademoiselle and Chanel No.5 have come out on top and are favorite Christmas gifts. The hike in advertising in December supports this trend. In 2012, newcomer Jimmy Choo slid into the fourth spot, behind Lady Million and ahead of Thierry Mugler Alien. In men’s, the list reads 1 Million, Boss Hugo Boss, Diesel Only the Brave, JPG Le Male and Chanel Bleu.

Despite a fondness for Italian designers, including Gucci, Giorgio Armani and Dolce & Gabbana, Italian women are drawn more to French classics from Dior and Chanel. The best sellers in 2012 were Dior J’Adore, Narciso Rodriguez for Her, Hypnotic Poison, Chanel No.5 and Coco Mademoiselle. Among the men’s scents, Armani’s Acqua Di Gio held onto its long-term pole position. I Million, Terre d’Hermes, Dior Fahrenheit and Allure Homme Sport came in after.

Spanish women have a preference for lighter fragrance and this is reflected in the scents they like to wear. Eau de Rochas, ckOne and D&G Light Blue are top five fragrances, all with a fresh formulation. The leading men’s fragrances in Spain were 1 Million, Boss Hugo Boss, Acqua di Gio, JPG Le Male and Loewe Escencia.

Flankers and Limited Editions
The lack of big new launches was more than made up for by the number of new flankers and limited edition fragrances last year. According to Fragrances of the World 2013, there were 219 flankers launched globally in 2012, up from 197 in 2011. Considered to be a low risk strategy, companies are able to launch an inexpensive yet reasonably profitable version, while still creating a buzz around existing brands.

Notable examples in 2012 included 1 Million Absolute Gold and Calvin Klein’s Sheer Beauty a flanker to Beauty and Forbidden Euphoria a version of Euphoria. Chanel’s Coco Noir is arguably a flanker to Coco, as was Coco Mademoiselle. Although Chanel kept the Coco Noir launch quite low-key in 2012, it is likely to gain momentum in the months and years ahead, just as Coco Mademoiselle has.

Another strategy is to launch limited editions. These are used extensively to test the market, as they add an element of exclusivity to a brand and encourage consumers to purchase quickly before they disappear off the shelves. If limited editions are successful, they will be added to a brand’s regular portfolio.

Celebrity Effect
Celebrity scents have long been popular with German and UK consumers and are credited with introducing fragrance to a younger audience.

Last year’s success stories included Lady Gaga Fame and Madonna Truth or Dare. Perfumer, Azzi Glasser, who has worked with many celebrities, creating bespoke commissions for Kylie Minogue and Johnny Depp as well as fragrances for boy band JLS, says celebrity brands control a fantastic audience and one not to be ignored.

“Celebrity fragrance is almost a different category in the fine fragrance market, just like fashion and niche brands are. They have a different style of customer and are able to connect to them through social media in an instant,” she maintains.

Celebrity fragrances have many detractors, especially among the beauty journalists, but the hard commercial fact is that they generate a great deal of income for the companies concerned. They provide an entry point for young people and represent the first rung of the ladder from mass to prestige.

Celebrity scents may also be just the ticket for pushing the European fragrance markets back into the growth column. 

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Imogen Matthews
Headington, Oxford UK
Tel: +44 1865 764918

Imogen Matthews is a respected consultant, journalist and researcher focusing on trends in the beauty industry. She regularly contributes to many of the world’s foremost beauty trade titles. Every year in April, she publishes The Premium Market Report, focusing on trends in the UK premium beauty markets. www.thepremiummarketreport.com