Fragrances in Italy

PRE-COVID-19 PERFORMANCE

High investment in upmarket fragrances pushes gift purchases and drives value sales in 2019

Fragrances continued to benefit from the appeal of designer fragrances. These perceived accessible luxury products were available at lower prices compared with corresponding apparel and footwear designer brands.

More personalised and niche offerings create opportunities to broaden the appeal of fragrances

Millennials’ approach to fragrances was quite different from that of older generations at the end of the review period. Millennials tended to be keener to invest in make-up, apparel and accessories than in fragrances.

Leading companies and specialist retailers invest in portfolios to gain competitive edge in a fragmented category

L’Oréal Italiana Saipo increased its lead in fragrances with a slight overall rise in retail value share in 2019. In a highly competitive environment, the company benefited most from the performance of Lancôme La Vie est Belle, which continued its strong rise to become the leader in women’s premium fragrances in 2019.

2020 AND BEYOND

COVID-19 impact

Sales of fragrances are now expected to decline by 5% in 2020 in 2019 constant value terms in light of the impact of COVID-19. This compares to an expected 2% rise forecast for 2020 during research conducted at the end of 2019 before the spread of COVID-19.

Affected products within fragrances

Self-isolation, quarantine and social distancing have severely the hit demand for fragrances, resulting in notably less frequent usage and low sales. While lockdown measures are being relaxed from late spring-early summer 2020, a return to normality is expected to be slow and ongoing travel and work restrictions, social distancing requirements and mandatory mask wearing are likely to continue to dampen the use of and demand for fragrances during the second half of the year.

Recovery and opportunities

Sales are set to recover slowly over the forecast period in light of the strong adverse effects of the COVID-19 crisis on the Italian economy and consumer confidence. Therefore, a negative retail value CAGR at 2019 constant prices is expected over the forecast period as a whole.

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