The Surprising Reason Perfume Prices Are Skyrocketing :: WRAL.com
CNN — The price of high-end perfumes has recently soared to levels not seen for luxury perfumes. But don’t blame rising inflation – the reasons have more to do with consumer behavior in times of stress and uncertainty.
The average retail price of fragrances rose 15% in 2021 compared to 2020, triple the average 5% increase over the previous two years, according to the latest data from market research firm NPD. .
“General inflation isn’t necessarily the story here. We started to see this wave of growth during the pandemic where consumers were ready to trade into higher-end fragrances,” said Larissa Jensen, vice-president. NDP President and Beauty Industry Advisor.
“We hypothesized that people were looking to indulge themselves with little luxuries in these trying times,” she said. “Fragrances allow us to escape, even momentarily, and experience a different emotion.”
American shoppers are paying more for all kinds of goods, such as food, furniture, clothes, shoes and cars. Beauty and other personal care purchases are no exception.
Perfume sales have exploded during the pandemic, fueled by strong demand for higher-priced eau de parfums –—fragrances with a higher percentage of fragrance oils that make the fragrance last longer once applied. Looking at fragrances alone (excluding home fragrances), last year’s sales jumped 52% compared to 2020.
Within the category, fragrances priced above $175 more than doubled in number of units sold in 2021, according to the report.
An air of refinement
Prestige fragrance maker Estée Lauder Companies sees this trend reflected in its sales, said Stephane de La Faverie, group president of the company.
As Global President of the Estée Lauder and AERIN brands, De La Faverie oversees the company’s portfolio of prestige fragrances, including Jo Malone London, Le Labo and By Kilian, as well as Estée Lauder fragrances and AERIN fragrances. The demand for luxury perfumes is driven by consumers who want a unique perfume composed of more refined ingredients.
“We are very optimistic that interest in luxury fragrances will continue thanks to exciting innovations, new fragrance markets embracing this sub-category and consumers still wanting a little luxury in their lives,” said La Faverie. .
As consumers increasingly shift to higher-end fragrances, he said the company is trying to encourage purchases by offering incentives such as trial via samples, giveaways and engaging with them in a personalized way via virtual consultations.
It’s a strategy leveraged by fragrance subscription service Scentbird, which sends its 450,000 subscribers bottles of luxury fragrances for $15.95 a month. The idea is to help shoppers find their perfect scent before committing to buying a full-size bottle.
Scentbird subscribers jumped 50% in 2020 — the first year of the pandemic — compared to 2019, said Bettina O’Neill, the company’s senior vice president of business development, merchandising and wholesale. .
“We learned that as more and more people were confined to their homes due to pandemic restrictions, they were finding ways to still feel good,” O’Neill said. “They were buying perfumes for themselves and scented candles and perfumes for their homes.”
Prestige perfumes tend to have a higher concentration of oils and use more expensive raw materials, she explained, so as demand soars, so do production costs.
“Chanel No. 5 is one of the best known examples. One of the ingredients is a rare flower,” O’Neill said. “Another popular prestige fragrance is Baccarat Rouge 540” from Maison Francis Kurkdjian, originally for Baccarat.
The fragrance, which costs over $300 for a 2.4-ounce bottle to over $600 for a 6.8-ounce bottle, features a blend of pricey ingredients like jasmine and saffron. If Tiktok is an indicator of its popularity, #baccaratrouge540 has 124.1 million views on the platform.
NPD’s Jensen said it remains to be seen whether demand for more expensive fragrances will hold up as consumers now pay even more for daily necessities.
“We don’t expect it to continue to grow at such a strong pace,” she said, adding that NPD may see the luxury fragrance category stabilize.
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