The Smell Test

Retailers were hoping the holiday season would finally be merry for the fragrance category. “Fragrance is always a top category during the holidays, and after years of lackluster results, the market is showing some increases,” says Karen Grant, global beauty industry analyst at The NPD Group. A recent report from Port Washington, N.Y.-based NPD found fragrance to be the fifth most popular purchase of the holiday season.

Give Back Brands’ Nicki Minaj Pink Pill and Girlfriend by Justin Bieber and Coty’s Lady Gaga Fame all saw triple-digit increases going into the holiday season, according to multioutlet data from Chicago-based IRI for the 52-week period ending Oct. 5, 2014. Parlux Fragrances Ltd. followed its October launch of Rogue Man by Rihanna with the November introduction of Rogue Love by Rihanna, with both scents generating immediate interest.

Gift sets, which Grant says traditionally account for up to a third of category sales, especially around the holidays, have become less popular with consumers, who are gravitating toward smaller-sized bottles and fragrance products for the home, such as candles.

Retailers got behind the category with circular ad support. Fragrances garnered 13.4 percent of circular ad support share for the year ending Dec. 13, 2014, according to Solon, Ohio-based ECRM, up from 10 percent last year, not including fragrance gift sets, which represented an additional 4 percent of circular ad support for 2014.

According to ECRM data, price promotion represented nearly 68 percent of circular promotions, while buy-one-get-one promotions represented about 8 percent of promotional activity, down slightly from the previous year.

Supermarket Scents

Despite promotion, the mass fragrance category has been in a slump for the past year. A report from London-based Euromonitor reveals that mass fragrances have continued to underperform, especially since prestige scents are increasingly available in mass-market channels.

Reduced interest in celebrity fragrances and an absence of any blockbuster launches also contributed to flat sales. “For women, the fragrance category still feels like it’s celebrity-driven and hugely hit or miss, which means it’s hard for supermarket retailers to ride the wave,” notes Wendy Leibmann, CEO of New York-based WSL Strategic Retail.

Leibmann adds that shoppers still don’t think about supermarkets when it comes to fragrances. WSL’s “How America Shops 2014” research report found that 7 percent of women said they purchased fragrance from a supermarket, down from 11 percent in 2012. “Unless a supermarket has a compelling experience, as well as the right brands, women are just not going to buy there,” asserts Leibmann. “For the most part, there are only a few supermarket retailers who are getting it close to right — Wegmans; ShopRite, which has improved its overall beauty department in some stores; H-E-B; and Whole Foods/Whole Body.”

Essence of Man

For men’s fragrance, however, the news was better, according to Leibmann: 10 percent of respondents in WSL’s 2014 report said they purchased fragrance at supermarkets, up from 8 percent in 2012.

“For men, fragrance is part of a shaving/grooming routine, so men are more comfortable shopping at a supermarket for fragrance, shaving and grooming products,” says Leibmann. “But again, retailers need to have the right brands and an appropriate experience.”

The men’s segment has outperformed the category overall. “While men’s fragrances have also struggled to grow sales, the segment has seen a slight gain in market share. Men’s growing involvement in grooming and personal care and new product development has helped the men’s fragrance segment slightly outperform women’s fragrances,” a recent report from Chicago-based Mintel notes.

Supermarket dollar sales of Coty’s Nautica Blue were ahead nearly 59 percent going into the holidays, good news for the New York-based manufacturer, since it noted a 2 percent decline in fragrance sales as well as a 2 percent slide in skin care and body sales in its November earnings report. Coty cited “pressure in the mass fragrances market” in its comments to analysts.

One new brand to watch is Coty’s Stetson Caliber. Launched in September, the scent targets men age 30 through 40 and is backed by at least $1.5 million in print and digital spending. The Stetson fragrance brand which debuted in 1982 has been among the top three sellers in men’s mass-market fragrance for the past decade, according to NPD.

Men are an influential and critical part of the fragrance industry according to NPD’s Grant. “Younger men are a prime example of the well-rounded fragrance user, since they are the group most willing to experiment with different fragrances,” she observes. “The category is more top-of-mind for consumers, and retailers seem to be giving more space to men’s fragrance grooming and shaving. It’s a category with huge untapped potential.”

Dollar sales of Procter & Gamble’s Old Spice Wild Collection surged 74 percent at supermarkets for IRI’s previously noted 52-week period. Last year, Cincinnati-based P&G launched Old Spice Re-fresh Body Sprays. The brand’s “One Spray Lasts All Day” tagline stresses the brand’s innovative first-in-category technology that eliminates the need for users to overspray or reapply throughout the day.

The launch was supported with a “Smellcome to Manhood” integrated marketing campaign, including television spots that humorously depict how tough it is for moms to come to grips with the fact that Old Spice is “spraying a man onto their sons.”

Other Segments

Old Spice was also strong in the body wash segment. Gender-specific body wash products have helped lift the liquid body wash segment 7 percent between 2011 and 2013, according to Mintel research. Mintel’s recent report on the category notes that growth in the segment was “driven largely by male-specific products such as Axe and Old Spice.” Unilever’s Dove Men + Care line has also been successful.

While there weren’t any significant introductions in the women’s body wash category in the past year, bath salts saw an intriguing launch in 2013. Chicago-based Morton Salt, most commonly known for its broad range of culinary salts, debuted a line of Natural Epsom Salt products, marking the brand’s first foray into the health and beauty category.

The line of bath additives, which provides soothing relief as a soaking solution for minor aches and sprains, and is made with natural magnesium sulfate, blurs the line between an HBC and OTC product. Morton’s Natural Epsom Salt line, consisting of four core products, helped bring double-digit growth to the otherwise sleepy bath salts and powder segment, according to Euromonitor data.

Organic and naturally based bath products are popular with consumers, as are products with a spalike positioning. Austin, Texas-based Whole Foods Market isn’t the only chain carrying organic/natural products; Rochester, N.Y.-based Wegmans Food Markets, for example, carries Avalon Organics as well as Kiss My Face. Mass brands, such as Aveeno and Organix, tout the soothing, calming or hydrating benefits of some of their products.

Unilever and P&G spent the most on circular ads last year in the category and kept their promotions in line with last year’s spending. Englewood Cliffs, N.J.-based Unilever remains the market leader in the category, and its Dove brand was the most frequently promoted brand in circular ads, according to ECRM.

While supermarkets promote the category with price breaks and multipack deals, other retail channels are more aggressively promoting the category, ECRM has found. For instance, San Antonio-based H-E-B has featured both Dove Body Wash and Dove Men + Care as its online Beauty Pick of the Month, which includes digital coupon offers.

“Unless a supermarket has a compelling experience, as well as the right brands, women are just not going to buy there.”
—Wendy Leibmann, WSL Strategic Retail

“For men, fragrance is part of a shaving/grooming routine, so men are more comfortable shopping at a supermarket for fragrance, shaving and grooming products.”
—Wendy Leibmann, WSL Strategic Retail