Fragrances - US - September 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Sales decline in 2017 as the market continues to face challenges
Figure 1: Total US sales and fan forecast of fragrance market, at current prices, 2012-22
Declines steepest in women’s fragrance segment
Figure 2: Usage of personal body care products with or instead of fragrances, by men and women aged 18-34, May 2017
Penetration is high, but usage is irregular
Figure 3: Regular and any usage of fragrances, May 2017
The opportunities
Young adults show high engagement in the segment
Figure 4: Regular and any usage of any fragrance (net), by age, May 2017
Interest in added benefits could encourage more regular usage
Figure 5: Interest in fragrances with added benefits, by men and women aged 18-34, May 2017
Innovations excite younger users
Figure 6: Interest in product innovations, by men and women aged 18-34, May 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Sales decline in 2017, with market slated to shrink through 2022
Smaller men’s fragrance segment outperforms women’s
The majority of fragrance sales are through “other” retail channels
Scented personal care products compete with fragrances
Engagement among younger adults key to growth
MARKET SIZE AND FORECAST
Sales decline in 2017 as market continues to face challenges
Market is projected to see declines through 2022
Figure 7: Total US sales and fan forecast of fragrance market, at current prices, 2012-22
Figure 8: Total US sales and forecast of fragrance market, at current prices, 2012-22
MARKET BREAKDOWN
Decline in sales steeper in women’s fragrance segment than in men’s
Figure 9: Share of fragrance market sales, by segment, 2017
Figure 10: Total US retail sales of fragrances, by segment, at current prices, 2015 and 2017
Figure 11: Total US retail sales and forecast of fragrances, by segment, at current prices, 2012-22
The majority of fragrance sales are through “other” retail channels
Figure 12: Total US retail sales of fragrances, by segment, at channel, 2015 and 2017
MARKET PERSPECTIVE
Scented personal care products compete with fragrances
Figure 13: Regular and any usage of scented personal care products, May 2017
Scented body care is especially appealing to key fragrance consumers
MARKET FACTORS 
Engagement among younger adults key to growth
Figure 14: US population 18+, by age, 2012-22
Younger consumers are more diverse, multicultural
Figure 15: Hispanic share of population, by generation, 2017
Figure 16: Population by race and Hispanic origin, 2012-22
KEY PLAYERS – WHAT YOU NEED TO KNOW 
In crowded landscape, a range of diverse players
Fragrances compete with original scents, unique inspirations, unexpected packaging
Natural ingredients, eco-friendly packages appeal to core users
Celebrity-endorsed and traditional floral fragrances struggle
Looking forward, customization, online retailing, and technology
BRAND OVERVIEW AND USAGE
Coty and Elizabeth Arden have strong presence within beauty market
L’Oréal and Estée Lauder hold broad portfolios
Parlux Fragrances is a leading supplier of celebrity fragrances
Unilever’s Axe and P&G Old Spice lead mass brands for men
L Brands offers exclusive brands through specialty stores
Specialty store perfume brands are most widely purchased
Figure 17: Usage of perfume in the past 12 months - format and brand, by gender, Winter 2017
Mass brands Old Spice and Axe top aftershave/cologne brands
Figure 18: Usage of cologne/aftershave in the past 12 months – format and brand, by gender, Winter 2017
WHAT’S WORKING?
Designer scents leverage connections with luxury
Figure 19: Mr. Burberry ad, April 2016
Differentiation via scent inspirations and standout packaging
Original fragrance inspirations connect to art, culture, nature, and science
Gourmet inspired scents drive innovation
Original and surprising packaging
Unique formats spark interest
Natural, skin-safe, and eco-friendly brands evoke simplicity
Unisex products and gender ambiguity are trending
WHAT’S STRUGGLING?
Traditional women’s fragrances are struggling to reach younger shoppers
Negative perceptions lead to struggle of celebrity fragrances
WHAT’S NEXT?
Customization moves into the mainstream
Technology enhances the shopping process
Primers to extend scent
THE CONSUMER – WHAT YOU NEED TO KNOW 
Penetration is high, but regularity of usage weakens the market
Fragrance retail landscape is fragmented, age and gender shape choice
Interest in added benefits is solid, could shape innovation
Specialty, designer, and celebrity brands have distinct associations
Mood, season, and time of day shape usage, especially for younger women
Concerns relate to safety, choice, and challenges of testing fragrances
Moderate interest in natural formulations and customized products
FRAGRANCE USAGE
High overall penetration, even as inconsistent usage undercuts sales
Figure 20: Any use (net) and regular use (net) of fragrances, May 2017
Higher-income adults are least likely to use fragrance
Figure 21: Regular use (net) of fragrances and any scented personal care, by household income, May 2017
Younger men are most likely to use fragrance regularly
Figure 22: Regular use (net) of any fragrance and any scented personal care product, by age and gender, May 2017
Younger men show strong usage of travel and alterative sizes
Figure 23: Regular use (net) of fragrances, by age and gender, May 2017
Multicultural adults stand out for high usage of fragrances
Figure 24: Regular usage (net) of fragrances, by race and Hispanic origin, May 2017
RETAILERS SHOPPED
Fragrance retail market is highly fragmented
Figure 25: Retailers shopped, May 2017
Affluent favor department stores, less affluent shop mass merchandisers
Figure 26: Retailers shopped, by household income, May 2017
Men favor mass merchandisers, women specialty retailers
Figure 27: Retailers shopped, by age and gender, May 2017
INTEREST IN ADDED BENEFITS
Moderate interest in added benefits
Figure 28: Interest in fragrances with added benefits, May 2017
Moisturizing and deodorizing claims yield maximum reach
Figure 29: TURF analysis – Interest in fragrances with added benefits, May 2017
Figure 30: Table – TURF analysis – Interest in fragrances with added benefits, May 2017
Methodology
Younger consumers show high interest in added benefits
Figure 31: Interest in fragrances with added benefits, by age and gender, May 2017
Interest in added benefits higher for Hispanics
Figure 32: Interest in fragrances with added benefits, by race/Hispanic origin, May 2017
BRAND PERCEPTIONS
Different types of brands hold distinct associations for consumers
Figure 33: Correspondence analysis – Brand perceptions, May 2017
Correspondence analysis methodology
Figure 34: Brand perceptions, May 2017
Younger adults report stronger perceptions toward range of brands
Young adults hold polarized views of celebrity fragrances
Figure 35: Perceptions of celebrity branded fragrances, by age and gender, May 2017
Women aged 18-34 view specialty beauty brands as high value fun
Figure 36: Perceptions of speciality beauty brand fragrances, by age and gender, May 2017
Men aged 18-34 see designer fragrances as high quality and high value
Figure 37: Perceptions of designer brand fragrances, by age and gender, May 2017
ATTITUDES TOWARD FRAGRANCE USAGE
Season and time of day can shape fragrance choice and usage
Mood and feelings are also integral to product choice
Figure 38: Attitudes toward fragrance usage, May 2017
Women are most likely to vary fragrance usage
Figure 39: Attitudes toward usage of fragrances, by age and gender, May 2017
Black and Hispanic consumers more likely to vary usage
Figure 40: Select attitudes toward fragrance usage, by race/Hispanic origin, may 2017
ATTITUDES TOWARD SAFETY AND EFFICACY
Challenges and concerns relate to scent testing, duration, and safety
Figure 41: Attitudes toward safety and efficacy, May 2017
Gender and age shape attitudes in selecting and testing fragrances
Figure 42: Attitudes toward safety and efficacy, by age and gender, May 2017
PRODUCT INNOVATIONS
Interest in innovations is moderate
Figure 43: Interest in product innovations, may 2017
Young women want natural, organic, and skin-safe fragrances…
…but are enthusiastic about a range of innovations
Figure 44: Interest in select innovations, by age and gender, may 2017
Blacks and Hispanics over index for a wide range of innovations
Figure 45: Interest in select product innovations, by race/Hispanic origin, May 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 46: Total US sales and forecast of fragrance market, at inflation-adjusted prices, 2012-22
Figure 47: Total US retail sales and forecast of fragrances by channel, at current prices, 2012-17
APPENDIX – KEY PLAYERS
Figure 48: MULO sales of fragrances, by leading companies, rolling 52 weeks 2016 and 2017