Fragrance sales give chains scents of encouragement

Drug Store News, Nov 17, 1997 by Liz Parks

There is good news and bad news about fragrances as the category approaches the crucial Christmas selling season.

Although both men's and women's fragrance sales continued to decline for the 52-week period ended Oct. 5, with the steepest declines coming in the drug store industry, some drug chains are showing growth in the segment. And because of the success of the new lightly fragranced body misting products, particularly Parfums de Coeur's Body Fantasies and Coty's Calgon Body Mists, the erosion of sales is starting to slow.

According to manufacturer-supplied IRI scanning data, sales in the total fragrance category (both men's and women's fragrances) in drug and mass merchandise outlets were only down 3.9 percent in dollars for the 12 weeks ended Oct. 5, 1997, compared to a decline of 7.1 percent in dollars for the 52 weeks ended Oct. 5, 1997. Sales of women's fragrances were only down 2.7 percent for the 12-week period, compared to a drop of 7.6 percent for the 52 weeks.

The improvement was primarily due to Parfums' Body Fantasies, which was the No. 1 ranked women's fragrance brand for the 12-week period, and to Coty's Calgon Body Mists, which was the No. 2 ranked brand for the same period. Neither brand was in existence a year ago.

Some drug chains are also starting to report favorable sales trends. The buyer for one large chain said that the chain's fragrance sales are up for the year, and that expectations are that the category will do well in the stores this Christmas, and that it will continue to grow in 1998.

Strong core customer

"There is still a strong core customer for fragrances," this source said. "Women who like fragrances, who like a strong scent, cannot find what they want in a body splash or a fragranced shower gel. We worked on finding the right assortment for our stores, and that's helped us tremendously. We also try to merchandise fragrances as a focal point in the cosmetics department.

"I've been in some drug stores where you couldn't even tell if they were in the fragrance category. I don't think a small presentation works. You are either in the category or you are not."

Chris Carter, vice president of purchasing for Baltimore, Md.-based Rita Ann Cosmetics, the industry's only full-line wholesaler of cosmetics, fragrances and other beauty care products, said that the chains doing a good job in identifying the right assortments, advertising strategies and merchandising presentations are moving the category. "The key is to identify and get behind the right items," he said.

One manufacturer source said most drug chains have not been very aggressive when it comes to fragrances, and neither have they been very imaginative or very smart about how they merchandise the category. He said a chain such as Walgreens, which has traditionally outpaced the industry in driving fragrance sales, "is not scared to go out and put in new items, but they make sure they put in the right items.

"Genovese does an excellent job with fragrances," this source also noted. "They use their cosmeticians to support fragrances. They have an excellent assortment and they promote the category.

"Rite Aid also does a good job. They've identified the right mix. Across the board, they have something in their mix, in either the prestige or the mass brands, that will appeal to all their customers."

As we inch closer to Christmas, buyers are reporting that they are working very closely with manufacturers, both the large companies, including Coty, Renaissance, Revlon and Parfums, and smaller companies, such as Intercosmetics, Delagar, Fragrance Impressions and Shiara to come up with merchandising programs that will drive sales and enhance sell-throughs.

Jean-Andre Rougeot, president of Coty Group Worldwide, said that Coty has developed an extensive collection of giftables for Christmas 1997, as well as for Mothers Day, Father's Day, Valentine's Day and Christmas 1998. The focus, he said, is on "enhancing the giftability" of the items being promoted.

Many buyers have complained that mass fragrance gift sets in the past have been too boring, typically just a fragrance in a cardboard box covered with cellophane and maybe a body lotion or talc as the added-value meant to be an additional purchasing incentive.

For Christmas '97 and for the gift giving holidays of 1998, Rougeot said, Coty has become "much more competitive" with its gift sets. The emphasis is on enhanced added-value, with gift sets that feature reusable decorative keepsakes as added-values. An ici pour, for example, will be merchandised in a set that includes a heart-shaped wire basket that can be hung and used as a home accessory. A Vanilla Musk .375-ounce perfume is merchandised in a set that includes a 1-ounce Vanilla Musk cologne spray and a reusable coffee mug: a 530 value that Coty is retailing for $14.95. A gift set for Coty's popular Calgon's Body Mists features three 8-ounce SKUs, a misting lotion, body lotion and shower gel, packaged in a clear shower tote for $14.95.

Coty, the category leader in fragrances, will also be source-tagging fragrances starting early next year. Coty's initiative will make it possible for retailers to merchandise fragrances in the open rather than under glass.