Overview 1
Catalyst 1
Summary 1
Table of Contents 2
Table of figures 2
Table of tables 3
THE FUTURE DECODED 4
INTRODUCTION: Fragrances are a major component of the overall personal care market 4
This report is one in a series of five category focused reports outlining the future of personal care trends 4
Fragrance preference induces a strong emotional attachment for consumers 4
Consumers view their scent as an important aspect of their personal hygiene, therefore making fragrance usage one of the most significant parts of their daily personal care regimes 7
The overall global fragrance market is subject to a number of drivers and inhibitors 10
TREND: 'Visual Culture' and an associated pre-occupation with appearance is the defining trend in the personal care space across product categories 11
Image is important to consumers even if they do not significantly feel societal pressure to look good (at least consciously that is) 12
There is scope for consumers to feel happier about their appearance, given the pressure to conform to demanding beauty ideals associated with contemporary society 17
Key takeouts and implications: Visual Culture is the core macro-trend influencing personal care habits 20
TREND: Fragrance sales have been negatively impacted by the global economic crisis, but the future still holds promise 21
Fragrances have not suffered as much as other personal care products in the recession, and have even thrived in some markets 21
Key takeouts and implications: industry players in the fragrances space have faced inevitable recessionary pressures, but have been successful to a certain degree, particularly in emerging markets 26
TREND: Most consumers are spending longer on their beauty regimes 27
Key takeouts and implications: the most significant growth in fragrance usage occasions going forward will occur in the high growth emerging markets 31
INSIGHT: Fragrances are used by a majority of consumers, with a wide range of purchase motivators contributing to product choice 31
Using fragrances is something which a majority of consumers deem important to do on a daily basis 32
Sensory and value considerations are driving fragrance purchases in the majority of markets worldwide 37
Key takeouts and implications: consumers are motivated to purchase and wear fragrances for a number of reasons, including improving desirability, personal happiness and professional advancement 42
INSIGHT: More importance is placed on branding than efficacy when choosing fragrances 44
Being both quality and brand conscious typically characterizes fragrance consumers, but there are notable variations by country and gender 47
Fragrance manufacturers need to recognize the 'experience economy' 55
Key takeouts and implications: frequent fragrance users typically seek products that are both high quality and of a reputable brand, with the two rarely seen as being mutually exclusive 58
INSIGHT: Fragrances, despite being associated with prestige and luxury, are not immune to consumers' intensifying value-for-money considerations 59
Value-for-money considerations heavily influence fragrance choice 59
Key takeouts and implications: with value-for-money considerations influencing fragrance product choice just like other beauty categories, industry players can not simply rely on the allure of the brand image to generate appeal 65
INSIGHT: Ethicality and the use of natural ingredients are both somewhat important to fragrance consumers, but are typically regarded as secondary considerations 65
Key takeouts and implications: as the marketplace becomes more saturated with fragrance products, being able to champion ingredient, ethical or environmental benefits will grow in importance 74
INSIGHT: Consumers value customization benefits so their fragrances feel more personal 75
Key takeouts and implications: customized benefits enhance consumers' perceptions that their fragrances match their personalities 81
INSIGHT: Recent fragrance product marketing efforts have focused on appealing to the male demographic and embracing prestige 82
Key takeouts and implications: marketing in the fragrance category typically looks to embrace the prestigious nature of fragrances, but industry players should be wary of being too reliant on celebrities to create brand allure 89
INSIGHT: More fragrances are incorporating active ingredients which provide consumers with additional benefits 90
Key takeouts and implications: the number of functional fragrance products is relatively low, but innovations will keep on occurring and igniting interest in the industry 94
ACTION POINTS 95
ACTION: Continually inflate the prestige and cache of core fragrance brands 95
Marketing must justify the price premium and the prestigious aura of the brand 95
ACTION: Utilize the internet and social media to create brand awareness and easier shopping options 98
There are several advantages to ensuring that consumers have access to a brand over the internet 98
ACTION: Use natural/organic ingredients and promote ethicality to appeal to consumers 101
There are a multitude of reasons why natural and organic reasons can be beneficial to manufacturers 102
ACTION: Use celebrities as a means of strengthening brand reputation rather than relying on them to sell individual products 104
Famous figures and 'brand ambassadors' must be used carefully to enhance the brand 104
APPENDIX 107
Methodology 107
Further reading and references 108
Ask the analyst 109
Datamonitor consulting 109
Disclaimer 109
List of Tables
Table 1: Consumer survey: the importance attributed by consumers to looking one's best in day-to-day life and using fragrances to smell nice, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country, 2009 9
Table 2: Consumer survey: the extent to which consumers feel under pressure to look good, in 15 countries across Europe, Asia Pacific, South America and North America, by country, 2008 14
Table 3: Consumer survey: the importance that consumers attribute to looking their best in day-to-day life, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country, 2009 15
Table 4: Consumer survey: the self-reported propensity to make sure beauty products are used up before replacing in order to save money, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country and product category, 2009 23
Table 5: Market value of fragrances in Europe (US$ millions), by sub-category, 2003-2013 24
Table 6: Market value of fragrances in North America (US$ millions), by sub-category, 2003-2013 25
Table 7: Market value of fragrances in South and Central America (US$ millions), by sub-category, 2003-2013 25
Table 8: Market value of fragrances in Asia Pacific (US $ millions), by sub-category, 2003-2013 26
Table 9: Market value of fragrances in MENA (US $ millions), by sub-category, 2003-2013 26
Table 10: Daily per capita fragrance usage occasions in Europe, by country, 2003-2013 30
Table 11: Daily per capita fragrance usage occasions in Brazil and the US, by country, 2003-2013 30
Table 12: Daily per capita fragrance usage occasions in Asia Pacific, by country, 2003-2013 30
Table 13: Daily per capita fragrance usage occasions in MENA, by country, 2003-2013 31
Table 14: Consumer survey: the importance that consumers attribute to "using fragrances to smell nice", in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country, 2009 34
Table 15: Consumer survey: how influential consumers consider scent to be in their general choice of personal care or beauty product in 15 countries across Europe, Asia Pacific, South America and North America, by country, 2008 36
Table 16: Consumer survey: the statement that European consumers believe best reflects their outlook on fragrances, by country and gender, 2009 49
Table 17: Consumer survey: the statement that Brazilian and US consumers believe best reflects their outlook on fragrances, by country and gender, 2009 51
Table 18: Consumer survey: the statement that Asia Pacific consumers believe best reflects their outlook on fragrances, by country and gender, 2009 53
Table 19: Consumer survey: the statement that Saudi Arabian and UAE consumers believe best reflects their outlook on fragrances, by country and gender, 2009 55
Table 20: Consumer survey: stated importance of materialism and experiential consumerism, in 15 countries across Europe, Asia Pacific, South America and North America, by gender and country, 2008 56
Table 21: Consumer survey: perceived similarities between store brand products (e.g. supermarket own brands) and market leading famous brands, in 17 countries across Europe, Asia Pacific, South America, North America and the Middle East, by country and FMCG product sector/category, 2009 64
Table 22: Consumer survey: the importance attached to buying ethical or socially responsible products, in 15 countries across Europe, Asia Pacific, South America, and North America by country, 2008 67
Table 23: Consumer survey: the importance attached to buying ethical or socially responsible products, in 15 countries across Europe, Asia Pacific, South America, and North America by country, 2008 68
List of Figures
Figure 1: Scent can be classified by its ambience and congruency 5
Figure 2: Fragrances have become an increasingly central part of personal care in MENA and the Americas 8
Figure 3: Most consumers consider using fragrances to be nearly as important as looking visually attractive 9
Figure 4: Despite recessionary times, consumers are still being influenced to spend good money on fragrance products 10
Figure 5: Visual Culture is a term describing consumers' intense appearance consciousness and the widespread desire to project a more confident and favorable image to the wider world 11
Figure 6: Appearance is important to consumers across geographic territories, regardless of whether they feel pressure to conform to the pervasive presence of Visual Culture in modern society 13
Figure 7: Lauren Luke embodies the 'everywoman' element of contemporary Visual Culture 16
Figure 8: While most consumers attribute a high importance to looking good, fewer are actually happy with how they look themselves 18
Figure 9: Scent bases products are important in enabling consumers to feel more physically attractive 19
Figure 10: Outside of the emerging BRIC markets, Spaniards are the most reliant on beauty products to feel more confident about themselves 20
Figure 11: Beauty is associated with success and opportunity, but workplace professionalism is deemed comparably less influential on the general personal care choices that consumers make 28
Figure 12: Personal branding is a manifestation of the pervasive influence of the 'Visual Culture' trend 29
Figure 13: Japanese consumers are the least likely to wear fragrances in the markets covered in this research 29
Figure 14: Gulf consumers place the most importance on using fragrances on a regular basis 33
Figure 15: Females attach more importance to wearing fragrances to smell nice than their male counterparts 33
Figure 16: The high influence of scent on general personal care purchases in Brazil also helps to contextualize the rapid growth rate in fragrance usage and the fragrances market in the country 35
Figure 17: Consumers from outside of Europe are less likely to mirror the overall global consensus regarding the importance of various fragrance attributes 38
Figure 18: Among the European consumer respondents surveyed by Datamonitor, Spaniards are the most value-driven when making fragrance choices in what is arguably a reflection of the testing economic conditions apparent in the country throughout 2008 and 2009 39
Figure 19: Brazilian and US consumers display vastly different levels of enthusiasm for various fragrance product attributes, but the overall 'hierarchy of influences' is broadly similar 40
Figure 20: Value-for-money is the most important product attribute for the majority of consumers in Asia Pacific when opting for a fragrance product 41
Figure 21: Like Brazilians, Gulf consumers display higher levels of enthusiasm for various fragrance attributes, but the overall 'hierarchy of influences' is broadly similar to the global picture 42
Figure 22: The Fragrance Foundation's initiative created to entice consumers back to the 'pleasures of fragrance' is appropriate given where sensory benefits sit in the overall 'hierarchy of influences' shaping fragrance choices 43
Figure 23: Europeans value brand above efficacy when making fragrance choices 45
Figure 24: Brazilians believe branding and efficacy are far more important in fragrances than Americans do 45
Figure 25: Chinese, Japanese and Korean consumers deviate from the global consensus in ascribing more importance to efficacy than brand when choosing fragrance products 46
Figure 26: For Gulf consumers, choosing the right brand of fragrance is a major consideration, well above the global average 46
Figure 27: The Spanish and French are the most brand conscious fragrance consumers in Europe, while Swedes are the least 48
Figure 28: Brazilians are highly fashion orientated and heavy fragrance users and therefore pay a lot of attention to the fragrance brand, while US consumers perceive themselves to be far less so 50
Figure 29: Indians are highly quality and brand conscious in what reflects the aspirational outlook of the country's expanding middle class population 52
Figure 30: Only a small minority of Gulf consumers do not use fragrances, with the majority caring about both quality and brand reputation 54
Figure 31: Experiential consumerism and premiumization represent key trends driving 'authenti-seeking' consumer behavior 57
Figure 32: Consumers assign value to products based on a number of factors 60
Figure 33: The biggest users of fragrance products also tend to be the most value-conscious 61
Figure 34: Fragrances, despite being associated with prestige and luxury, are not immune to consumers' intensifying value-for-money considerations 62
Figure 35: Fragrances are more brand driven than other major personal care categories, but not to the extent that industry players should be overly complacent about the possible emergence of private label 63
Figure 36: Sustainability and ethics will drive a higher number of commercial and consumer decisions, driving change across the value chain 66
Figure 37: For fragrance product choices, natural and ethical considerations are important in Italy, Russia and Spain, but the majority of other Europeans are less concerned than the global average 71
Figure 38: Brazilian consumers find it important to choose fragrances that are both natural and ethical, but this is far less of a consideration in the US 71
Figure 39: In the Asia Pacific region, Japanese consumers are particularly unconcerned with whether or not a fragrance product has ethical credentials and/or uses natural/organic ingredients 72
Figure 40: More than half of consumers in the Middle East believe it is important that fragrances are natural and manufactured in an environmentally-friendly way 72
Figure 41: Fragrances such as Baobab tout ethical credentials to appeal to the low, but significant proportion of consumers that take such issues into account when making purchase decisions 73
Figure 42: On a general level, Australians in particular are guided by the ideology of 'buying local' 74
Figure 43: Customization benefits are likely to appeal to the high proportion of individualistic consumers who value the opportunity to be expressive and have products the better meet specific needs 77
Figure 44: Customization benefits are likely to appeal to the high proportion of individualistic global consumers who value the opportunity to be personally expressive and have products the better meet specific needs 77
Figure 45: Russians are the most interested in customization benefits in fragrances 79
Figure 46: Brazilians are more attracted to the idea of customization features for fragrances than Americans 79
Figure 47: In the Asia Pacific, the Japanese are the least pre-occupied by custom features 80
Figure 48: The percentage of Gulf consumers who find customization benefits important in their choice of fragrances is nearly twice the global average 80
Figure 49: Consumers can now use the internet to build fragrance profiles and receive recommendations based on the results 81
Figure 50: Companies have adopted masculine marketing approaches to make fragrances more appealing to males who view it as a feminine product 83
Figure 51: A product package that is interesting to touch may increase sales of the product even if the opportunity to touch does not provide additional product attribute information for the consumer 84
Figure 52: Italian and Russian consumers are set apart from their European counterparts in their greater willingness to rely on endorsements when purchasing fragrances 87
Figure 53: Brazilians deem packaging design of fragrances to be far more important than US consumers 88
Figure 54: Recommendations from family and peers plays a large part in the fragrance purchasing decisions for consumers in China, India and Korea 88
Figure 55: Gulf consumers are more than twice as likely as the average global consumer to rely on endorsements made by professional associations and/or celebrities 89
Figure 56: A new breed of 'functional fragrances' claim to offer consumers multiple innovative benefits in addition to simply smelling nice 91
Figure 57: Indicative of growing interest in fragrance formulation, the product claims demonstrating the highest growth relate to the exclusion or addition of certain ingredients 92
Figure 58: There was a marked increase in 'Upscale' product tags in 2009, reaffirming the indulgent nature of the fragrance category 93
Figure 59: There was little change in the most popular scents, suggesting that new product development has focused on the addition of benefits as opposed to the introduction of innovative scents 93
Figure 60: Bottle design can emphasize the values of the fragrance within, with many focusing on elegance and premiumization 97
Figure 61: Le Labo is promoting prestige and exclusivity with its very limited edition, local fine fragrance range 98
Figure 62: Rewarding online consumers with free samples increases the likelihood of repeat business 100
Figure 63: Following the example of the likes of LuckyScent.com could prove profitable 101
Figure 64: A plethora of fragrances tout organic ingredients in order to appeal to consumers 103
Figure 65: Some fragrances make environmental awareness their main selling point 104
Figure 66: Celebrity endorsements are generally seen as unimportant by global consumers, especially in Europe 106
Figure 67: Celebrity association with fragrances can potentially boost sales, but equally can have a negative effect 106
