The sweet smell of success has been elusive in the fragrance industry for the past few years. Sales dipped 3% between 2012 and 2014 and they’re expected to remain flat through 2019. Research found that 20% of consumers are overwhelmed by the variety of scents in perfume, personal care, and home products. “Fragrance brands are going to need to innovate to get consumers excited again,” explains Andrea Van Dam, CEO of strategy agency Women’s Marketing, Inc . Van Dam believes there are opportunities for growth in the over populated beauty industry by developing attention-getting products, incorporating value-added benefits to fragrance products, and tapping into the wellness lifestyle trend.
Top Note: Technology
The marriage of fragrance and technology may offer brands an opportunity to generate excitement. One noteworthy development is Google’s patent for a wearable fragrance emission device that was granted in February. At the core of this technology is an activity sensor that senses when the wearer is starting to perspire. When the sensor is activated, the device reacts by releasing an odor-fighting fragrance. “While early in the development phase, Google’s fragrance device could lead to unique commercial opportunities and brand partnerships,” says Van Dam. She sees the possibility for this technology to be incorporated into the beauty industry through odor-minimizing fitness-apparel and apps that would allow consumers to experience new fragrances via hardware that emits scent.
Highlight Functionality and Wellness Benefits
The inclusion of added functional benefits in the fragrance industry is a concept that’s resonating with shoppers. Mintel’s Fragrance Issues and Insights Report found that 72% of category users express interest in fragrances with skincare benefits, with one quarter of respondents reporting they would pay more for dual-purpose products in the beauty industry. “Added functionality provides fragrance brands with the opportunity to increase regular usage, ultimately driving incremental growth,” Van Dam explains. “Additionally, while the concept of aromatherapy is not new, we see opportunities for brands to engage consumers in the wellness lifestyle category—this is particularly impactful with women who make the connection between scent and well-being.”
Aligning with the wellness trend is the concern about the safety of ingredients used in fragrance—16% of survey respondents said they were concerned about the safety of ingredients used in the fragrance industry and 12% of scent wearers say they worry they’ll have an allergic reaction to certain fragrances. “When 75% of category users express interest in fragrances that contain all-natural ingredients, it’s a wake-up call for the industry,” Van Dam says. “Enthusiasm for natural products is high and could be instrumental in propelling future growth.”
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Source: Mintel Reports Google Enters the Fragrance Category, Mintel Fragrance US 2015