Fragrances in Switzerland

2020 IMPACT

Home seclusion and price sensitivity dampens growth for fragrances in 2020

Sales of fragrances declined by 6% in 2020, with COVID-19 impacting the landscape in several ways. This includes home seclusion, with consumers having less need to wear fragrances if not going out to work, socialising or attending occasions and events.

E-commerce grows; however, a lack of consumer testing limits sales

As most of the popular retail store types for fragrances, such as beauty specialists and department stores, were closed due to COVID-19 restrictions and lockdowns, the only channel that reported real growth in 2020 was e-commerce. However, as e-commerce reduced the ability to test fragrances, with consumers only able to spray and smell items in person, online sales remained limited to familiar brands.

Chanel and Christian Dior increase their share, as L'Oréal Suisse SA and Coty Inc, decline

Despite the outbreak of COVID-19, exclusive products and brands with a long history and high levels of brand recognition continued to lead the landscape, with Chanel increasing its share in 2020. In addition, although price sensitivity impacted sales, those wealthier consumers who were less impacted by price sensitivity and habitually buy premium fragrances continued to do so.

RECOVERY AND OPPORTUNITIES

Recovery begins in 2021 as consumers return to socialising more often

Following a decline in value sales in 2020, recovery is set to begin in 2021, with consumers slowly beginning to socialise, attending occasions once more. Lowe-level value growth is expected for the coming years, reaching a CAGR of 1%.

Department stores and beauty specialists recover as consumers appreciate in-person services

Department stores and beauty specialist retailers are expected to regain traction and share over the forecast period, being among the most popular retail channels for fragrances. The possibility to receive professional consultations and try different products and scents remains among the key purchasing factors for many consumers within fragrances, which is why future growth of online sales is expected to become more moderate following 2020.

Cross-border shopping and low-level innovation challenges sales over the forecast period

Fragrances are expected to record a low level of growth, impacted by several factors. While demand for premium, unique and exclusive products will be driving value sales, on the one hand, high levels of saturation and limited innovation or new product launches will result in declining interest and price competition.