ASK THE EXPERT
NEMANJA BABIC
BY MAE MAÑACAP-JOHNSON
A recent study entitled Dollars and Scents: Winning in Fragrances
by A.T. Kearney, Inc.—a New York-based global management
consulting firm—concludes that while prestige fragrance sales in
the U.S. amount to an excess of US$4 billion (data from NDP
Group), growth had been flat in the past years and that only in
2014 and 2015 the prestige fragrance industry has seen a minimal
growth. Based on data from Kantar Media, Company Filings 2015,
the growth is mostly driven by product launches, the rise of “niche
fragrances,” and heavy investment in marketing amounting to
about 20 percent of sales.
The study is based on an online survey of 844 U.S. shoppers (72
percent women, 28 percent men). All shoppers have purchased a
premium fragrance within the three months prior to the survey.
In this issue’s Ask the Expert, NEMANJA BABIC, principal and
co-author of the study, delves into the key drivers that influence
customers’ purchasing decisions, the fragrance brands that
continue to dominate the market and trends to keep an eye on in
meeting the needs of both in-store and online shoppers.
Pulse: What has been the percentage of growth in the
fragrance industry in the past five years? Where
do you attribute the growth?
Babic: Annual growth has been modest, but accelerating—it has gone from being flat in 2013 to
two percent growth in 2014, and four percent in
2015.
P: Why do you think, despite the launch of
new players in the market, the same
fragrance brands dominate the market?
B: We can’t comment on individual
brands—however, the key element for every
perfume is to start with “good juice.” The
scent has to be great, and have broad
appeal. The brands that listen to consumer
feedback and understand how consumers
prefer to shop for these products, and
build a strong emotional connection
with them, seem to be the ones that
get ahead.
50
PULSE
■
December 2016
P: When it comes to sales trend in men’s fragrance, what
were some of the findings from the study?
B: Top men’s fragrances have experienced a
slightly different dynamic
recently, with more
changes in the top five
fragrances since 2010. This
is likely due to growing
interest in the men’s
grooming category overall.
Ma le shoppers, in general, tend
to purchase fragrances less
often, are more likely to
purchase online and, on the rare
occasions, they go fragranceshopping in a department store,
they tend to buy just fragrance. In
addition, they are 50 percent less
likely to cross-shop (for apparel or
other beauty products, for example)
than women.