Can One Ad Change Everything for the Fragrance Industry?
Posted by Andrea Laird
Despite the sensual images and emotional reactions associated with fragrance, the chances are when you think about Valentine's Day gifts this year, you'll think about flowers, chocolates, or a dinner at your favorite restaurant, before you consider a bottle of perfume.
That's not a huge surprise given the downward trends in fragrance sales. Except for a brief pick-up beginning in 2006 — when a number of celebrities began selling their own fragrances, generating new interest in the category — fragrance sales have languished since the economic downturn that followed the 9/11 terrorist attacks.
As consumers clamped down on discretionary spending in the latest recession, sales dropped precipitously.
"The recession just kind of put the last nail in the coffin, to put it bluntly," said Rochelle Bloom, president of the industry's trade group, The Fragrance Foundation.
According to market researcher NPD, sales of so-called prestige fragrances — typically the high-end, designer scents sold by department stores — fell 10 percent in 2009 from the prior year. This was a sharp acceleration of the 6 percent decline from 2007 to 2008, and a 1 percent decline from 2006 to 2007.
With a bad situation turning worse, the fragrance manufacturers — who are often secretive, and most certainly fiercely competitive — are banding together to do a national campaign to encourage men and women who use perfumes and other scented products, to do so more often.
Although the organization was founded in 1949, Bloom said she believes this is the first national, multi-media campaign the industry has done through the trade organization.
According to Bloom, the slowdown in consumer spending certainly dealt a body blow to the industry, but there were other things that were going on that were hurting business as well.
"Fragrance gets a bum rap," Bloom said, explaining that many people starting believing it was unacceptable to wear fragrance in the workplace. It began to get a perception that it was bad for the environment or that it triggered people's allergies.
Plus, in an attempt to spark consumer interest fragrance companies began churning out tons of new products each year, hoping that at least some of them would resonate with shoppers and energize the category.
Bloom thinks the opposite happened. Consumers became confused, she said.
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Read the full CNBC article here: http://www.cnbc.com/id/35257856/
This entry was posted by Andrea Laird on Monday, February 22. 2010 at 17:23.
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