This is borne out by figures that show upwards of 3 000 new fragrances are launched globally every year. (Source)
The challenge then is deciding what to do with the underperforming lines, so they don’t end up occupying vast swathes of expensive warehouse space.
In 2024, we believe it’s time to reframe this costly narrative and stop the problem before it starts.
This year, we’re asking the question: What if you don’t have to create more products to make more money? What if all you had to do was find new markets?
Traditionally, creators of luxury fragrances restricted their availability to high-end retailers in historically affluent areas. For years, this proved a highly lucrative approach, creating an alluring sense of exclusivity, desirability, and enviable luxury.
But times and consumer cohorts have changed; how we market fragrances has to change too.
The Rise of Alternate Channels
Alternate markets represent a significant opportunity for luxury brands. Previously unexplored geographic regions and demographics are starting to emerge as unexpected but unarguably lucrative hunting grounds.
South Africa, for example, with its rapidly growing and influential middle class – specifically urban women with high disposable incomes – is currently experiencing a boom in high-end shopping. In fact, the country represents the largest luxury brand market in Africa (Source).
It’s interesting to note that Africa as a continent hosts the largest percentage of middle-class consumers (Source), who view luxury brands as important status symbols in their ongoing journey of self-improvement.
There’s no doubt that demand for all kinds of luxury goods in Africa is on the rise. Thanks in no small way to an increase in the availability of technology, the continent now represents a significant alternate market for brands that have, historically, been physically and financially inaccessible.
Much of this demand is fuelled by mobile connectivity.
These days, geographical constraints are no longer a barrier – Africa boasts upwards of 570 million tech-savvy internet users, almost 300 million of whom go online on their smartphones and other mobile devices for eCommerce purposes. (Source)
Asia is another alternate market where perfume sales are on the increase as consumers’ tastes become more sophisticated. South Korea, for example, is generally seen as a regional trendsetter with a population that enjoys significant purchasing power, is well travelled, and enjoys a high standard of living.
Capitalising on the Global Village
It’s obvious that when it comes to selling luxury products, the world is becoming increasingly borderless. Anyone anywhere can buy almost anything with a couple of simple clicks. The perfume industry in particular is undergoing significant digital transformation, creating a vast and growing alternate market for the world’s most iconic brands.
We’re seeing fragrance brands embracing digital marketing strategies that include social media and influencer collaborations to reach a broader audience and create greater brand awareness among natively online generations.
TikTok in particular plays an unprecedented role when it comes to the kinds of perfumes that these younger consumers favour.
In fact, #PerfumeTok, the platform’s dedicated fragrance hashtag, has over 2.3 billion views to date, while #FragranceTok has 1.1 billion. (Source) According to an article in Harper’s Bazaar, the hashtag is fast becoming a hub for fragrance lovers, where thousands of creators post their reviews, recommendations, and even tutorials on how to apply perfume.
There’s no doubt that Generation Z in particular seems very comfortable moving away from the more traditional, in-store way of discovering new scents. Instead, they’re basing choices on online video content from influencers that “decodes the perfume’s notes” or “explains the mood/feeling it creates.”
Antonia Baildam, TikTok’s Head of Beauty, says, “The hashtags are serving up this discovery moment which equips the consumer with the tools to understand fragrance on a deeper level. It often takes just one piece of content to create a groundswell around a particular brand.”
There have even been instances when #PerfumeTok caused a scent to sell out overnight.
Regardless of how brands might feel about these radical changes in their traditional markets, there’s no denying the incredible purchasing power of the TikTok generation. The hashtags are changing the way consumers think about, and engage with, luxury fragrances before they buy.
According to market analyst The NPD Group’s 2022 Fragrance Consumer Report, the platform accounts for 45% of all social media-driven fragrance purchases in the US alone.
Other stats worth noting include:
- Gen Z-ers are three times more likely to buy a fragrance linked to the emotional attributes as described in TikTok video content.
- Perfume-related content on TikTok increased by over 449% between 2019 and 2020.(Source)
As evidence of just how seriously beauty brands are taking the influence of social media, Coty recently created a position for a Director of Global Influencer Marketing to support Marc Jacobs Beauty. A key function of the role is “the creation, development and execution of the influencer marketing and PR strategy, with a strong focus on digital and social communications to drive brand awareness and visibility.”
Other Trends Affecting Fragrance Marketing
“Scent wardrobes” vs Signature Scents
Certain scents might evoke fond memories of loved ones, but wearing the same fragrance day in and day out for years is no longer the way most people use perfume. Instead, younger consumers prefer to choose several favourite scents to mix and match according to their mood and/or the occasion.
This trend is also evident on TikTok, where sticking to one fragrance, or even one perfume house, is simply an obsolete concept. There’s also strong evidence of younger generations being more price- and brand-agnostic, choosing the feeling a scent evokes over who it’s made by or how much it costs.
Mass markets vs High-end Retailers
Despite the much-talked-about cost-of-living crisis, sales of luxury fragrances seem largely unaffected. Much of this healthy outlook, however, is being driven at the mass-market level. In 2023, for example, almost two-thirds of fragrance sales in the UK happened in “non-luxury” outlets (Source).
Often dismissed in the past as “Fragrance graveyards” where bottles of perfume were kept locked in unattractive glass display cabinets, mass retailers regularly account for around half of all fragrance sales.
It’s all about making everyone feel seen and ensuring these types of luxuries are accessible to anyone who wants to experience them.
Omnipresence over Demographics
Younger perfume buyers are looking for scents that align with their beauty needs, wants and values. The brands they identify with most are not only those that offer diversity when it comes to sustainability, price and actual smell but also those that are supported on the social platforms – and by the social media influencers – they know and trust.
Alternate Markets Need an Alternate Approach
So, where do we at Beautynet see ourselves in this brave new world of internet influencers, hashtags, and financially empowered younger generations?
The answer is simple: Right at the front, finding exciting new and alternate marketing channels for your luxury fragrance brands.
Our strategies are deeply rooted in monitoring multiple data sources, from over 2 000 retail SKUs and two million wholesale EANs to pricing, stock availability and sales analytics.
We also have a highly skilled internal IT team that uses cutting-edge technology and the latest AI tools to create bespoke, novel solutions for ourselves, our customers and suppliers. Since 2019, we’ve seen improvements of more than 260% to our organisational efficiency, giving us more time to focus on what we do best – finding the most lucrative alternate marketing opportunities for your products.
If you’d like to find out more about how we do this, and what it could mean for your brands, please get in touch.