Fragrances in Lithuania

2020 IMPACT

Limited social activities reduces demand for fragrances

A notable decline was recorded in fragrances in 2020 due to the COVID-19 pandemic. Fragrances are among the first products that consumers stop buying when their incomes come under pressure due to the non-essential nature of the products.

Strong shift towards e-commerce as consumers increasingly shop from home

There was a notable shift of sales from in-store retailing to e-commerce in 2020, with the channel recording by far the strongest growth. E-commerce had already been gaining share in fragrances in recent years, but the onset of the pandemic boosted the trend with consumers keen to avoid physical exposure to the virus.

Premium fragrances fares better than mass fragrances as affluent consumers can continue spending

People working within the service and travel industries were affected the most during 2020 as COVID-19 restrictions led to little work for them. Such consumers ordinarily have limited and sometime unpredictable incomes and typically purchase mass fragrances.

RECOVERY AND OPPORTUNITIES

Price promotions expected to continue being a key strategy for retailers

Given the decreased interest in purchasing fragrances in 2020, most retailers applied generous price promotions to their goods to entice consumers to buy their favourite products for lower prices. The same strategy is expected to continue in 2021 as the economic strain of the pandemic lingers and continues to affect a broader range of households.

New product development expected in premium fragrances as upper-income consumers continue to try new scents

Whilst lower-income consumers have suffered and reduced their spending on mass fragrances, many affluent consumers have benefitted from the extended time at home and now have additional savings and disposable income. This, combined with price promotions on luxury brands, has further intensified consumer interest in trying niche fragrances.

Direct sellers to increasing use social media to attract consumers

During the lockdown in 2020, direct sellers managed to catch the attention of consumers by employing social media channels. As consumers were spending increased time at home, they also spent increased time on their gadgets, making them more open to communication with sellers online.