Beauty products and fragrances have been proven to be a highly successful brand extension for many luxury fashion houses. According to Euromonitor, over the last few years, niche fragrances have been experiencing double digit growth and are the best performing category within the global prestige fragrance market.
By creating private fragrance collections, couture labels such as Armani, Christian Dior, Guerlain, Yves Saint Laurent or Dolce & Gabbana refer to their unique brand’s heritage. The focal points of their brand values are sentimental places and the roots of the original perfumery métier, which are customized scents “sur mesure”. The official aim would be to create the luxury experience for their customers from head to toe.
However, in reality these limited editions and private collections of couture brands is an answer to unbelievable expansion of small, niche perfume brands invading the $26-billion fragrance industry and starting to steal market share from big labels. It is not only due to modern luxury customers who are becoming increasingly sophisticated and search for unique experiences. During the last few fears, big international brands were concentrating mainly on the profit side of this business and have been launching too many so-called flankers - variations of existing fragrances.
In the meantime, more original niche fragrances: Jo Malone, Creed, Le Labo, Byredo, Annick Goutal or Frederic Malle took over the lead in the luxury department stores such as Barneys NY, Nieman Marcus, Harrods or Galeries Lafayette and their respective online stores. For these retailers niche perfumes account for the bulk of sales, also due to the high-end price positioning at 200$-400$ a bottle.
This growing trend attracted recently even more niche perfume brands created by famous "noses" and creative directors such as: Roja, who used to work for Guerlain, Francis Kurkdjian, the "nose" behind Jean-Paul Gaultier's "Le Male" or Ramón Monegal, who left Puig Group in 2007 to create his own brand. Michael Edwards, a British fragrance expert and author of "Fragrances of the World" and "Perfume Legends" counted over 1500 fragrance brands worldwide with 360 niche perfumes compared to under 100 just a decade ago.
This means that undoubtedly there is a demand for tailor-made luxury fragrances but in the same time it is very important for these brands to differentiate and to find a "niche in a niche". The same approach should be applied to marketing communication and sales strategies since niche brands will be forced to look for alternative distribution channels and e-commerce possibilities to reach affluent customers.