After gaining back some of the ground lost after four years of negative sales during the economic downturn, fragrance sales are basically flat on the year, and experts predict they will continue their holding pattern during the holidays.
According to The NPD Group, 15 percent of shoppers will purchase a fragrance this holiday, which is unchanged from 2012; similarly, Euromonitor forecast that the category's sales will tick higher by only 0.2 percent this year.
But despite waning interest in the category, and competition from the lower-priced lip and nail care segments, fragrance can't be ignored. NPD reported that fragrance will still be the fourth-most popular holiday purchase this season, which experts attributed to its reputation for being an easy gift, its attractive packaging and its characterization as a value buy.
And with 45 percent of the year's fragrance sales occurring from October to December, retailers will continue their efforts to push the category on to shoppers' lists to ring up positive holiday sales.
"Fragrance is something that I feel like the stores are always pushing," said Virginia Lee, senior research analyst at Euromonitor.
Most of the growth in the prestige fragrance category—sales logged primarily in department stores—has come from pricier, niche fragrances such as Demeter Fragrance Library's Oud, and scents from Jo Malone and Tom Ford, Lee said.
She pointed to Bond No. 9, Estée Lauder's Modern Muse and Coty's Marc Jacobs Honey as other fragrances she expects to perform well.
While celebrity perfumes continue to saturate the market—including scents from Rihanna, One Direction and Taylor Swift—the category's real value growth is now being driven by an older, more sophisticated shopper who doesn't care to smell like a pop star, Lee said. She also predicts prestige will continue to outperform mass offerings, as higher-income shoppers have the money to burn on a $250 fragrance, she said.
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