Despite the economy downturn, the fragrance industry is going strong. Bearing labels with famous celebrities like Jennifer Lopez, Mariah Carey and Sean Combs, celebrity fragrances let consumers smell like their favorite celeb, yet these famous scents require little marketing efforts to sell due to the already popular name. Can this trend last?
Celebrity fragrances going strong
Special to FashionIndustryToday.com
May 2, 2008
Brittany Abeijon, San Francisco
Despite the economy downturn, the fragrance industry is going strong. Bearing labels with famous celebrities like Jennifer Lopez, Mariah Carey and Sean Combs, celebrity fragrances let consumers smell like their favorite celeb, yet these famous scents require little marketing efforts to sell due to the already popular name.
“Celebrity drives everything today, so why not fragrance?” said Mary Ellen Lapsansky, executive director of the Fragrance Foundation. “It’s an aspirational thing. Consumers can buy into the celebrity’s lifestyle by wearing their fragrance. They can feel and smell like celebrities.”
These high-profile, personalized celebrity scents are the fastest-growing segment of the whole fragrance industry. Perfume sales at department stores rose 3 percent to $2.94 billion in 2005, after years of hovering between $2.8 billion and $2.9 billion, according to NPD Group Inc., a market research company in Port Washington, NY.
Mariah Carey launched her signature scent M, James Franco, Gwen Stefani recently released her perfume L. by L.A.M.B., and James Franco, who played Harry Osborn in Spiderman, will be the face of the upcoming Gucci by Gucci fragrance for men, set to launch this fall. Even Donald Trump has his own scent, an unsurprisingly sophisticated scent – not money – but rather mint, cucumber and black basil.
Justin Timberlake plans to endorse a line of fragrances from Parfums Givenchy. But unlike other celebrity lines, Timberlake’s fragrance will not have his face on the packaging, but he will appear in advertisements and other promotional tactics for Parfums Givenchy. The fragrance is currently unnamed, but the line is set to be unveiled in June and launch commercially in the beginning of August.
Alain Lorenzo, the CEO of Parfums Givenchy, said he chose Timberlake “not only for his star quality but because he is a world-recognized trendsetter who redefines modern elegance.”
The market is quickly growing because of fans that are star-obsessed. Celebrity and celebrity-endorsed brands represented 23 percent of the top 100 fragrances for women in the U.S. in 2005, up from 10 percent in 2003 and sales from celebrity fragrances have grown 80 percent to $148.5 million from 2003 to 2005, according to NPD.
Fragrance consumers can be categorized by those who want higher-quality scents bearing the names of their favorite designers whose collections appear in fashion magazines like Vogue and Elle, such as scents from Chanel or Burberry. Another type of consumer is the star-struck fan who purchases everything associated with their favorite celebrities. Trend seekers are also a type of fragrance consumer, people who look for a new perfume that not only smells good, but also sets them apart from the rest of these consumers, according to Parlux Fragrances Inc.
The relationship between celebrities and fragrances can be traced all the way back to the 1930s when a bottle of Shocking perfume was modeled after actress Mae West. The celebrity who really started the trend was Elizabeth Taylor whose perfume endorsing effort was glamorous and successful, the launch of White Diamonds in 1991.
But celebrities themselves began to follow the scent trend after Jennifer Lopez’s Glow was released by Lancaster Group, a division of Coty, Inc. in late 2002. The perfume had sales of more than $40 million during its first six months of release. Even the curvy bottle had a sexy shape, much like Lopez’s.
Anne Hathaway will release a new fragrance from Lancôme this fall, Eva Mendes will be the face of a new Calvin Klein fragrance expected to launch this fall, Colombian singer Shakira will launch a new beauty and fragrance range under arrangements with Puig, Erykah Badu will front an upcoming fragrance for Tom Ford and Avril Lavigne has confirmed that she has trademarked her name in preparation for a line of clothing and fragrances.
“Everybody has come out with a fragrance,” said Rochelle R. Bloom, president of the Fragrance Foundation, a New York trade group. “I think it diminishes the category in a funny way…is it really a good deal for the industry? Is it going to move the industry forward? That’s a fine line.”
The boom of celebrity scents has sent the number of fragrances debuting each year up to about 350, Bloom said, up from about 20 each year in the mid-1980s.
“(Celebrities) have been terrific. They’ve brought a whole new customer to an industry that for the last five years has been flat and slow,” Bloom said. “And it means fragrances don’t last as long. Once they debut, there is going to be another competitor within weeks.”
“Very few fragrances are given the time to establish themselves,” Bloom said. “If they’re not a home run from the first day on, they’re not given a chance.”
Britney Spears’ wildly successful fragrances – Curious, which became a top seller in department stores during the 2004 holiday season, Fantasy and Curious In Control – are credited with introducing perfumes to tweens and teens. Elizabeth Arden Inc. is hoping to re-create that success with former Disney Channel star Miss Duff’s new scent, With Love.
“If a fragrance is good, people will buy it no matter what the name is,” Bloom says. “But there always is going to be a certain population that says, ‘I want to emulate’ that star. It’s probably more the younger crowd than the older one.”
Perfume companies are no longer putting their money into creating a fragrance that’s going to last for generations, such as the 87-year-old Chanel No. 5. Instead, they pour money into short-term advertising that’s going to make a scent the popular, new item, even if it only lasts a single season.
In a report released lasts year by Euromonitor International, a Chicago-based market research firm, worldwide sales of the top seven celebrity scent lines totaled $353.6 million in 2006. The best-selling Sean John Unforgivable–the signature scent of Sean Combs, or “Diddy” – brought $74.9 million in sales to parent company Estée Lauder.
Compared to mainstays like Davidoff’s Cool Water, its worldwide sales more than $143 million, and even more established brands like Liz Claiborne’s Curve for Men, which had more than $31.3 million in sales, celebrity Sean Combs is living proof of the growing trend.
In most such celebrity fragrance deals, the licenser produces the fragrance, puts the celebrity’s name on the bottle and then the star receives a cut of the sales. Actual amounts are never disclosed, but industry standard is between 5 percent and 10 percent and sometimes the celebrity may even get a signing bonus.
For stars like Jennifer Lopez, who has a fifth scent, Deseo, recently released through Coty Inc., these deals pay off. In 2006, Sales of her fragrances, including Glow and Live Luxe, totaled $77 million.
One reason celebrity fragrances are a growing trend is that consumers already identify with celebrities, so when distributors put a recognizable name on a perfume bottle, there is less of a need for a large marketing effort.
“In the 1950s and ’60s, when fashion designers like Christian Dior and Givenchy became popular, it was easier to market their perfumes, because there wasn’t so much competition,” says sociologist Henrik Vejlaard, author of Anatomy of a Trend. “It takes a lot of money to make a designer perfume well-known these days,” he says. “Perfumers benefit financially from names that are very famous already.”
But for celebrities with reputations that turn sour, like Britney Spears, her fragrances were little affected. Although Spears has had a rough couple of years both personally and professionally, her scents are still in demand worldwide.
While involved in a child custody battle, shaving her head and in a perpetual state of rehab, sales of Spears’ Curious and Fantasy totaled $84 million. Parent company Elizabeth Arden launched her third product, Believe, in August 2007.
Still, a name only goes so far, says Karen Grant, a senior beauty industry analyst at the NPD Group.
“With about 200 new fragrances released every year, it’s the celebrity that raises the awareness,” Grant says. “If it’s a great product, then it will continue to see strong sales.”
According to a report from Euromonitor International, “The World Market for Cosmetics and Toiletries,” the celebrity scent trend looks set to come to an end as the market becomes over-saturated with new products. This has global perfume manufacturers re-thinking their future strategies as celebrity perfume sales are predicted to suffer.
The celebrity fragrance market, which has witnessed a large invasion of products over the past few years, such as Coty Inc.’s Darling by Kylie Minogue and Parlux Fragrances’ Paris Hilton, is bracing itself for a backlash. Celebrity perfumes have previously driven sales growth, but mass fragrance sales are predicted to decline as much as 25 percent by 2010 as the celebrity trend weakens.
The problem, according to the report, is that the celebrity fragrance market has become over-saturated by the large number of products that have inundated the market. This may lead to problems for global manufacturers, particularly as the ranges are being continuously revamped to keep up with the image of the celebrity – the Jennifer Lopez fragrance collection has seen six new products launched since the original launch of Glow in 2002.
Diana Dodson, senior industry analyst at Euromonitor International comments, “With so many new releases, manufacturers are running the risk that consumers will become increasingly confused and frustrated by the never-ending choice.”
The report predicts that more quality products will replace the trend of star quality. With the global market for premium fragrances generating $18.7 billion, or 60 percent of the total market, quality is clearly in demand. Manufacturers are expected to respond by taking a longer amount of time when creating new products. As a result, the industry will become less driven by quick-turnover innovations characterized by the celebrity trend.
Manufacturers are also expected to boost sales by employing marketing strategies that persuade women to apply their fragrances more frequently throughout the day. This tactic is supported by the introduction of more portable fragrance formats, such as roller-balls. Coty Inc. has responded to this by launching the Lovely by Sarah Jessica Parker Liquid Satin Serum Rollerball fragrance.
Dodson explains further: “The fragrances market has strong potential for growth if manufacturers can find ways to pull customers towards ‘quality,’ rather than selling on image alone. As part of this move towards premium products, ingredients will play a more central role. Jo Malone’s Pomegranate Noir has taken the first step in this direction, riding on the wave of popularity of the purple super-fruit.”
Though celebrity continues to drive the industry, at some point another trend will replace it.[]
Brittany Abeijon is a business writer at FashionIndustryToday.com.