Wednesday, February 3, 2010

How Much Will the Niche Market Bear?

The news on the discontinuation of some Serge Lutens fragrances we broke on these pages as well as the Guerlain discontinuations we also had the honerous duty of introducing to you a while ago have prompted me to think long and hard about the fragrance market and its trajectory ever since the Internet became a major player from 2000 onwards; first with budding perfume discussing fora and later in 2005 with the emergence of the first fragocentric blogs. Nine years and counting later things have profoundly changed and the scenery is altered.
Everyone jumped on the bandwagon of niche perfumery and with aspirations of artsy-fartsy pretence about how "perfumery is an art too" (Chandler, if only you knew what a monster you created!) they have been indundating the market with overpriced dreg ever since. There is simply TOO MUCH JUS OUT THERE!! Whether it's for the best or the worst I am leaving this up to your intelligent discussion in the comments. But first let me present some facts and some trivia for your consideration.

First there were the Hermessences in 2004: A major luxury player who was active on the fragrance sector as well decided to do the unthinkable ~present an exclusive line of top-tier scents reserved for their interior boutique only circuit. Guerlain had their own plan upon refurbishing their flagship store in 2005, plans which materialised and some which were almost cut mid-stream (Il Etait une Fois reissues, I'm talking to you!). Soon enough ~it seemed to me before the word Hermessence had dried on the staff memo~ Chanel pulled an Hermes as well, 3 years ago almost to the day, with their Les Exclusifs to be sold exclusively at Chanel boutiques. The two luxe lines were received with accolades, enthusiastic bises in a very European manner and profound respect from the whole perfume community, even if there were a couple of critical voices on the concept and coherence of the thing.
Just last year both "exclusives" were renegated to online shopping, making the acquisition of a coveted haute bottle approchable at the click of a mouse to anyone in upper Minnesota who had the requisite checkings account. Where's the exclusivity factor?

Several established brands followed (Dior Prive, Lancome La Collection, Tom Ford Private Blend, Lauder the Private Collection Line fragrances trio), and the few remaining ones came out just recently with their own "exclusive" sub-line within the line, cashing in on the hen who lays the golden eggs (or so they thought): Cartier Les Heures de Parfum, Van Cleef & Arpels Collection Extraordinaire, Dolce & Gabbana Anthology. They employed top tier perfumers, they advertised intelligently by word of mouth, they even brought original "ideas" for inspiration. (The Tarot deck for D&G, for Chris's sake. What's next? The Mayan calendars of doomsday?) The results? Rather lukewarm reception to varying degrees of temperature nuance. Even though there are a few specimens in there which are indeed great (especially in the first two brands), the idea seems tired, been-there-done-that and the audience doesn't seem to go back for much more... Not at those price points in this economy at least!

Uber-luxe brands positioned themselves in a place of de juro superior price point (often with the corresponding quality in the formula): Amouage and By Kilian are good examples. Recently By Kilian has introduced the smaller traveller bottles and the refills in order to appeal to the less cash-flowing clientele. Smart move! Still not every release can be received with enthusiasm. Writes Pam from Olfactarama regarding their latest Back to Black, giving it 2 stars out of 5: "A combination of pipe tobacco, cherry syrup (maybe cherry pipe tobacco?) and vanilla. After 2 or 3 hours only vanilla; after six it's a generic heliotrope/vanilla with a slight Play-Doh note. I don't know what all the fuss was about". One can re-invent the wheel so many times, I guess.

Several smaller players emerged lately as well, often with erratic results: French niche line Ego Facto from Pierre Aulas debuted at Marionnaud in France with 7 perfumes: 4 for women and 3 for men and even employed acclaimed nose Dominique Ropion for their Poopoo Pidoo fragrance (inspired by Marilyn Monroe no less) as well as other famous perfumers for the rest. One of my online friends with a discerning nose, who also posts on several fora & blogs, TaraC proclaims: "I just tried all 5 of the Ego Factos yesterday and didn’t like any of them. They all smelled like generic commercial synthetic swill on me… I guess I’m not the target customer!"
Smell Bent on the other hand is a new LA-based indie niche line, which deputed with 10 fragrances (!) at a low price point. A NST commentator calls them "pretty gimmicky too". MakeupAlley reviewers and regulars have varying opinions on them.
What's up? Are then people able to judge independently of the price asked? Big surprise, I guess they are! On an interesting spin of events a graphic outlining perecentages (according to a Sanford C. Berstein survey of 834 U.S. consumers conducted over a two-week period in mid-December) of people who have traded down in various consumer product sectors appeared in The Wall Street Journal. Some include: 34% traded down in laundry detergent, 31% traded down in kitchen paper twoels, 15% traded down in toothpaste & what is within our scope...14% traded down in perfume/cologne! Fascinating, no?

Please nota bene at this point that I have not (yet) smelled any of these fragrances from the two companies above so I cannot form a personal opinion on them. But the saturation of the market does leave a perfume writer with something less than frenzied desire to sample the latest thing, doesn't it? A sense of boredom sets in and samples lie there untouched. But let's forget for a second that this is a second job here, what about the average perfume lover who isn't necessarily writing about perfume: Can the market bear so many lines, so many brands, so much jus? Niche was the only sector in fragrances to show a slight increase amidst the recession. However this is slowly changing, exactly because the consumer is catapulted with "news" and "launches" daily. And the general trends direction isn't sounding too good either.

According to reportage by Jason Ashley Wright on Tulsa World "2010 is the year of the celebrity fragrance, said Megan Hurd, a beauty expert for Amazon.com. Not only is Kim Kardashian’s anticipated first scent hitting shelves this month, so is Halle Berry’s orchid-and-citrus- inspired scent. Others include Beyonce’s (in February) and Sarah Jessica Parker’s third fragrance, SJP NY (early spring). People are gravitating toward lighter, more airy scents, said Pat Hudelson, a fragrance expert at Saks Fifth Avenue in Utica Square. Last month’s deep-freeze temperatures “kind of put everybody in a depressed state,” she said. “Everybody needs something new and kind of fun.”
Some show increase in their stakes even amidst the lagging economy: "Inter Parfums Inc. announced that net sales for the fourth quarter were about $113.6 million, a 13% increase from $100.4 million in the prior year quarter." (to note they distribute Van Cleef,Burberry, Lanvin, and will be collaborating with Montblanc soon). They're bringing out Burberry Sport fragrance line this month and Oriens, a female fragrance line by Van Cleef & Arpels this coming March, so obviously the Van Cleef brand needed some reboosting. (Amazing if you think of it, since La Collection Extraordinaire practically just launched, it was only last autumn!).
Some show decrease and pleas for help: "Mr. Burkle's investment firm Yucaipa Cos. bought up a large chunk of Barneys' debt late last year and has offered to invest at least another $50 million in the high-end fashion chain via a loan deal that would leave him owning 80% of Barneys' common equity. The remaining equity would be held by Barneys' current owner, Istithmar World Capital, the investment arm of state-owned Dubai World" [...]The move is the latest play for Barneys, a swanky New York apparel retailer that has struggled since being taken over by Istithmar just before the recession hit".[source] And some propose a completely different approach still: "Some luxury brands are finding that single-sex boutiques boost the bottom line. While it's not exactly a man's world on Main Street, luxury brands are increasingly offering greater exclusivity in men-only shops" [source] Cherchez l'homme!

So what "fruits" will the future of perfumery, especially niche, bear? Let's hear it from you!

Photo of Audrey Hepburn by Richard Avedon via manishtama blog. Still from Greek film "Rendez-vous at Corfu" (1959) via grcinema.wordpress.com


  1. Hi E, very good post/ opening of debate. I agree there is too much juice, especially mediocre juice and too much short termism. There are also too many companies and individuals in the biz to make a buck who don't know much about perfume and don't care much about it either. Perhaps I am guilty of writing reviews etc without having worked in the industry but I have read widely, attended courses and so on.

    What happens from here though I don't know. What I fear is it might become harder for the real niche, even the luxury niche like The Different Company etc to survive were they not supported by someone with either independent money or another job- I don't know how much money Killian Hennesy makes on his line or indeed if the Ellena's subsidise DC at times for example.

    I came to perfume only in fairly recent years as an obsession and even in that time the sheer number of releases and more withdrawls has sky rocketed.

    I certainly see in the press far more pushing of the fragrance wardrobe idea but while I might indulge in one that just isn't practical for a great many people and I don't think they can expect to charge the same or higher prices as say ten years ago pushing the idea of people having ten scents instead of say 2 and think the majority of people will do as their told.

    Will be very interested to hear what other people think.

  2. I think there is a whole lot of dreck, or at least stuff that smells like dreck on me. I do, however, like B2B. I also like Tonka Imperiale. And Coromandel. Ah, well...

  3. K,

    thank you, I was hoping someone would jump up on this and elaborate.
    It's not just a matter of fragrance writing, as much as it is a matter of fragrance producing! And planning! Suddenly perfume sounded like the area to make a buck, as you say, and this somehow diminishes all the "art" aspirations. Otherwise why didn't they act on it before? Wasn't it "artful" enough before? ;-)
    There's certainly a trend going on, and trends are inherently about some socioeconomic force having them on a roll (Max Weber would have a field day on this, I suppose)

    You bring on a very salient point about the autonomous funding or not. I think TDC is a case study as it was begun in a way that it aimed at top top niche and it has stayed that way, through the family continuation (if there wasn't that lucky coincidence and Celine weren't a perfumer, what then?) as well as having a resource through the ample funds from the day job.
    I suppose Kilian is a comparable case, since he gets the funds from LVMH.

    Re: the press, of course you're right. The "fragrance wardrobe" idea has been pushed a lot exactly because of the reasons you delineated.
    However assuming that one isn't a perfume-maniac like us, I suppose they can be satisfied with much less variety. In fact there's something very romantic about a signature scent. *sigh*
    So, all this pushing does leave consumers in this economy feeling rather foolish, don't you think? Not to mention that in my opinion there's an element of vulgarity in tactless displays of spending; it almost goes contrary to the ethos of frugality in the recent societal conditions following the recession. At least this is what I see.

    Is that the same in the UK and do you agree?

  4. Karin,

    definitely! The point is not whether we like some things (I do like Coromandel as well and re:TI it deserves its own post). The point is whether the move to establish an haute profile for brands was necessary from an aesthetic point of view (or from a business one. And as much as I'd like to think it was the former, I'm more convinced it was the latter...
    The matter of high prices (elevated due to packaging, ridiculous exclusivity like only one person being able to claim a fragrance, limited distribution etc.) is also inherent in this business tactic which leaves me with a cynical grin: It wasn't too long that 100$ seemed like a splurge for a bottle of perfume. Now it's the norm! Surely the quality of juice didn't get so elevated in a mere matter of 4 years, has it? ;-) Agree?

    BTW, how did you find the Tonka? Please tell!

  5. Lordy-

    All this makes me want to slit my wrists !

    Seriously, though-
    I appreciate how all these factors can lead to ennui and disillusionment.

    Personally, I would rather wait for fewer, more exquisite scents, than frantically attempt to sniff all this chazerei.

    My two cents ;-)

  6. Ida,

    it's all very disillusioning...especially for someone as immersed in things. A slower pace would produce less ennui.

    Your axiom is sound advice. If only that "shortlisting" was already done by the companies themselves and save us the trouble ;-)

  7. Great topic- but one that doesn't exactly leave one feeling relieved, does it? The above comments strike a chord in that the price points for so many of these seem quite up there. You're right, anything $100 or less is downright cheap, and hey, even $120 is starting to sound cheap, when even a year ago, that seemed steep to me. It's scary that I'm getting used to paying something like $200 for a bottle. The Chanel Exclusives and the Malle line in particular, while exquisite pieces, draw a little blood while providing pleasure, too. These days I only focus on niche lines, since that's where the good work seems to be anyway. But, yes, the sheer volume of what's out there is staggering, and I know I've become habituated to it. Very little is novel anymore. What's to draw one's attention nowadays? I am grateful for blogs like this, though, because they do help me to narrow focus because you all are sorting through the volume a bit for me! This issue also makes me think of things like the television industry, where they keep coming out with the same crap over and over (oh, another lawyer/medical drama???) and we're left to the "niche" channels like Showtime and HBO to give us the really good stuff (I love you, Weeds). I suppose the antidote to all of this is the dictum, "Know Thyself" (was that above Apollo's oracle or was that from Socrates?). The more I center on myself and know myself, the more I am able to cut through the myriad and zero in while remaining open enough to be pulled where the road takes me in terms of novel paths to pursue.

  8. I have hardly anything to add.
    I've got something from the Perfumista Challenge and that leads me to believe that people themselves can make their own stuff which is at least as good as any random new release. One doesn't need roses grown on Mars to make something that smells nice. Damn, patchouli oil is nicer than most current releases. So what.
    (I also like Coromandel. Try mixing it with Bois des Iles, 1:2 should work well)

  9. Jared,

    thanks for the trust :-)

    It IS scary that prices have skyrocketed the way they did, but what's more scary is that there is a deliberate "planning" in which the consumer is considered to place value in relation to price, in the lines of "If it's that expensive, it's got to be good". This instinctively and intellectually bothers me, personally. It allows for a fake "turning up" of quality perception (not directing this at Chanel or Hermes or Malle or any of those esteemed brands, since they do maintain quality).
    Jean Claude Ellena, the perfumer at Hermes, had told me that "when one wants to up the luxury they either increase the size or increase the price". It's a sound marketing technique, obviously (and he's such a smart, perceptive guy).

    Your simile/comparison with television is supremely fitting!! It's enough for someone to have an idea for it to be twisted and turned and repeated ad nauseum for what seems like eons. Enough already! As a sidenote, since I'm not US-based, it's funny to see we import some of the good US series as is (Dexter, CSI, ER, Weeds) and then ALSO try to copy the concept into a Europ-ified context which sometimes looks and feels completely ridiculous (if only because transplanting some cultural idiosyncracies is so very difficult and the milieu in which some occurences sprout up is totally different). So, we're doing a "flanker" so to speak. Invariably it gets watched, but not as much as the original (reminds you of any other business field? LOL)

    Yup, the antidote would be the aphorism "Know Thyself" (γνῶθι σεαυτόν), which btw you are correct it was inscribe in the Delphi oracle -apparently it was an anonymous aphorism dedicated to Apollo. But it was repeated by Socrates himself, so the re-attribution makes some sense I guess. But that's the easy part. :-)The difficult part is to actually sit down and know ones' self!!! I can't say I have entirely succeeded.
    (Btw, I had been reading a very interesting book on this authenticity to one's self issue; it sounds "lifestyle" but is much more: The Style Statement)

  10. L,

    can't disagree with you, after all the Perfumista Challenge thingie was supporting this hypothesis and I'm glad it proves it. (So spill the beans, who made the fine specimen and what are they charging for it?)
    One of the esteemed natural perfumes, Dominique Dubrana, had once "broken" the code of silence on this: It is rather easy to make something that smells nice! The difficult thing is to make something original or which conforms to a specific vision. (But that has to do with technicalities, as in an applied art, not a "art" art, come to think of it).

    Coromandel is probably the nicest of the lot; not the most revolutionary or refined perhaps, but solidly built and very comforting. It's a pleasure to wear. Hadn't thought of mixing with BdI. Should I? I LOVE BdI!

  11. Zazie17:00

    Hi, very interesting discussion, though I might have dropped late.
    It reminds me of a few assertions of AT on his blog: he doesn't want to be catalogued niche any more and I can certainly understand why.
    Many brands have thought that a fancy packaging, a limited distribution and steep prices could give the illusion of quality. I think taht these kind of games don't last. The emperor is naked, and people after a while realise it is very au poil indeed.
    Too much to choose from is not bad per se, or at least so I think, but the novelty for its own sake that is disturbing. There have been a lot of very good and interesting 2009 launches, and there have been many bad ones - it is part of the game. But someone explain me why "luxury" brands launch new perfumes in the half a dozen. VC&A, Cartier, ecc... and usually, only one is worth committing. And the new lines popping up like mushrooms under the rain: do all these people have something different to say? I fear not.

  12. Z,

    it's never late :-) Welcome to the discussion!

    Oh yes, AT is right; what's the meaning of niche any more? Everyone is doing it, it seems.
    Variety is a good thing, though, to a logical extend. And I agree with you that 2009 has been a good year for perfumes. Regarding why they all issue "lines" however, to be perfectly honest my own personal opinion is they're pulling a Lutens! He was the first to introduce 4 variations of Feminite du Bois all at once upon opening the Salons du Palais Royal back in the early 90s and from then on create THE cult niche, so they all followed his steps. It didn't help that Hermes, Guerlain and Chanel also issued "niche/exclusive" "lines" on the get-go either: suddenly this was how the game was played by the big fish too! Now everyone feels compelled to do the same and it just feels like they're rehashing ideas.
    Do you notice there is a pattern: there's almost always an iris, a patchouli, a leather, a soft oriental, a fresh floral or fruity...

  13. Hi E, yes I very much agree and it's certainly the same in the UK for most people. You certainly still have a vulgar few, the stereotypical footballer types who are conspicuously spending and I think in this country more than most many people are too used to owning every new thing being a right whether they can afford things or not.

    That said most people have cut back spending and I would have thought for 'normal' people, not the obsessed like us, justifying purchasing more than a few scents at most a year would be very hard at the moment.

    I also didn't think of this the other day but fragrances come and go so quickly that people don't have time to build a relationship with signatures- you might love something for 2 years and then struggle to get it and change- and with perfume as with anything it's the repeat purchasing that makes you money so I would have thought in hard times firms would be advertising their classics not spending money on developing new scents.

    *Sighs* Great post though xx

  14. A very interesting and insightful post, dear E. As they say - "Sometimes more of a good thing isn't good, it's just more."

    I've spent my professional career in the Thoroughbred racing industry, formerly known as the sport of kings. Somewhere along in the '80's every doctor, banker, sheikh, lawyer and venture capitalist out there decided that the tax laws for the industry were very favorable and the horse business was a virtual license to print money. So everyone began breeding race horses, supply far outstripped the demand, and with the problems on Wall Street, we're now on the equivalent of the Titanic.

    I fear the same will happen with the perfume business. Over-saturation of the market will send consumers looking for the next new and more interesting thing on which to spend their money.

  15. Increase the size or increase the price...oh how sad. I suppose one must have a good bullshit detector in this tricky market! As a fun coincidence, by gigantic bottle of Sycomore arrived today. No regret there though :)

  16. Helg,
    do try the Coromandel and BdI mix. Coromandel is sort of softer and more rounded where Bois des Iles is somewhat harsh and the greasy smoke of Coromandel mixed with BdI cedarwood just rocks.
    As for the samples I sent you, all are mine. They however need some tweaking, I notice that while maturing, some of the materials start to stick out more than I'd want. Let me know if you wanted more of some, it certainly can be done.

  17. Hi E! Late, been busy, but thanks for the reference -- once again this all reminds me of the music business in the 80's, when suddenly a few independent labels began to release good music, and all the majors and mini-majors suddenly jumped onto the bandwagon with "alternative" music, labels and even "alternative" marketing people. I began to wonder, alternative to what, exactly?

  18. Oh, it's very much about making money, I'm afraid. I'm sure the perfumers don't mind too much -- hey, if you're an artist and someone offers you gobs of money to make art, you take it. The larger companies have figured out that perfume is the next thing in the line of luxury items that they can squeeze for every dime (like It Bags and It Shoes) and so they are. Eventually saturation will be reached and it'll all back off. Hopefully what we'll be left with is at least a few good fragrances, a few better-educated consumers (because surely some will fall in love, even if their initial attraction was the "It-ness"), and a few perfumers that get a chance to create they might not otherwise have gotten. When the dust settles, those of us who really love the juice will still be here, smelling marvelous. The down side is, yes, the prices. Prices on luxury goods never do seem to come down, do they, even when they're not the Hot Thing anymore. But I think the response to this has been more opportunities for decants and splits, and that's all good.

    I don't even bother to try to keep up with new releases anymore -- it all just comes too thick & fast. But thank goodness for you & all the other bloggers whose noses & opinions I respect -- you help me navigate the Sea of Perfume Mediocrity out there.

  19. Rose Strang17:52

    That's Capitalism for you though eh?!

    If there's market demand then there's the potential for mass distribution. The question is - does that make the original work any less original? No. Will mass production make it make it cheaper? Yes. Is that a good thing? I think so! Chanel were on to the exclusive thing way back with No 5. That's the trick. I mean, that's were we get duped.

    There will be plenty of new ground-breaking creative types to offer new ideas, which will in turn be mass consumed if popular enough, or made popular by expensive marketing. This is exactly how the art world works.

    Except for this difference - once a famous artist is dead, no-one would argue about the increased value of their original work - because there will be no more originals, originals are reproducable. With perfume it's a replicable formula, the cost is all about high quality materials.

    Imagine the concept of a forgery in perfume! It's not possible because if someone has the original exact recipe they can re-produce it precisely with very little effort, not the case with paintings.

    The one exception is vintages, or maybe limited editions from a particular batch of perfume which won't be made again. Or a perfume for which the formula has been lost (though I bet a good perfumer could re-produce it, by nose and those machine thingies they use to analyse notes)

    So if something is mass produced, therefore allowing cheaper production costs, why not? Also it strikes me that this will change mainstream taste since most niches buck the trend for fruity sweet simple perfumes

  20. Rosestrang,

    thank you for the long and detailed comment.

    My claim is that capitalism though it is, niche began as an address to the needs of those who wanted to buy something not available to the masses. So the massification of niche is canceling out the original need. Those people need to increasingly seek out other options, till those become mainstream-ized as well, and then on to other options, and eventually to bespoke.
    With the rise in prices this is not to the betterment of the consumer, because if anything niche managed to raised prices 10-fold in the last decade. When people began to "discover" niche in considerate numbers around the mid-00s the price of Lutens was considered expensive. Now Lutens (apart from the new eye-popping Gold new line which is 600€ a pop) is considered rather tame, good value for money really.

    The failing from an ethical point of view is that niche was marketed as art. But the difference is that art is not made in order to make a profit, to be marketed, recognized, acclaimed and then sold up to a 10-fold markup. It's made because the artist cannot do ANY OTHER WAY. It's an internal need, not a business model.
    But niche relied a lot on positioning as art in order to convince the audiences, so this is a basic deception on their part. Admitting to the marketing might have "saved" their faces, but few and far between did that.

    Besides perfumery isn't just a case of following a recipe (even the exact recipe, see Cellier/Piguet formulae or the Long Lost Perfumes problem, the owner does have original formulae in his hands), nor of what materials one uses (surely that too, but not only; it would be like saying a Maine lobster would do the same things in the hands of two different cooks) . Perfumery is an extremely fluid thing, where not 2 bottles smell exactly the same unless they came from the same conveyor belt at the factory and are smelled within 5 minutes. This is what my experience in the field has taught me.


Type your comment in the box, choose the Profile option you prefer from the drop down menu below the text box (Anonymous is fine if you don't want the other options) and hit Publish! And you're set!

Blog Widget by LinkWithin