Fragrances in Western Europe remained the largest regional market globally, albeit recording the lowest growth of all the regions. Excessive promotions and strong pressure on beauty specialist retailers in the fight against e-commerce competition hamper current value growth. In order to fight consumer fatigue and market trivialisation, companies have been searching for new solutions such as launching new series of individual scents, focusing on niche, ultra-exclusive proposals.
Western Europe remained the largest market over 2014-2019, with sales of USD13.9 billion in 2019. However, the market registered one of the slowest CAGRs among all the regions, due to slower economic growth and delayed recovery after an earlier Eurozone crisis.
The size of the premium fragrances market is three times larger than mass and it has also been growing faster. Western European consumers strongly favour premium products and traditional Western scents. Strong innovation, the glamorous image of premium fragrances, increased annual disposable income and intense advertising overall drive the positive performance of premium fragrances.
The lower prices of some premium fragrances had a domino effect and caused a price repositioning in other segments. Selective fragrances were cheaper, so the prices of semi-selective brands had to decrease as well.
Fragrances is one of the worst-hit categories in the beauty industry due to social distancing, lockdowns and retail closures. Fragrances is seen as a ‘’can-wait’’ category.
Reinterpreting classic packaging, engaging consumers on social networks through digital marketing as well as branded boutiques and specialised stores, known as selective distribution, remain of paramount importance to the customer experience. This trend helps to foster volume sales of fragrances.
Due to high saturation of fragrances in Western Europe, players are searching for new solutions to maintain growth. Over the forecast period, more niche and individual brands are likely to be launched.
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