Why Can Perfume Be Favored By Luxury Goods Industry?

If there is a big year in the perfume industry, 2016 will obviously be fruitful.

The editor received three times.

New products sent by licensing or public relations companies.

Even if you are not in the industry, no matter whether you walk on the airport corridor or the online drama, you can not avoid perfume advertising.

The brands are eager to win more customers with palm size perfume.

Hermes, Dior and other traditional perfume players naturally push the new products without delay, such as Loewe, Christian Louboutin, Gosha Rubchinskiy and so on.

They also released their latest fragrances, and Louis Vuitton, the most high-profile, suddenly returned to the perfume market after 70 years.

When the luxury market is in the doldrums, perfume becomes the next profit growth point.

"We see the great potential of perfume."

Louis Vuitton CEO Michael Burke explained to reporters.

It's not easy to get a slice of the market in a competitive market.

In order to acquire perfume capital, the Les Fontaines Parfum e es of France's Glass, and invited "perfume nose" Jacques Cavallier Belletrud to steer, Louis Vuitton poured hundreds of millions of dollars.

Under the condition that Louis Vuitton's main business has been frustrated for 3 years, it is reasonable and timely to use perfume as a response.

In the face of negative effects of global travel fever, currency exchange rate fluctuations and frequent terrorist attacks, fragrance products are highly resistant to stress.

In the first half of this year, French luxury goods giant LVMH fashion and leather goods profits fell 1.8%, while the profits of perfume and cosmetics increased by 9.2%.

Analysts believe that the first year of Louis Vuitton perfume will contribute 60 million -8000 retail sales to the brand in the first year.

LVMH's recent third quarter report confirms this argument.

In the three months ended September 30th, the revenue of group leather and fashion department increased by 5% compared with the same period last year. Louis Vuitton perfume was regarded as a growth point and was included in the earnings report.

Although perfume is not the main business of luxury brands, it is usually placed in a key position.

Pierre Cardan extended the product to the fragrance field as early as 1960s.

With the licensing agreement, perfume recorded an annual revenue of $1 billion in 1988.

Nowadays, almost all the luxury brands that call their names have the same perfume, most of them are working with professional fragrance and fragrance company, such as Cotti (Coty), FM and Chiverton.

The importance of fragrance products has become increasingly prominent as sales in the industry have entered a period of slow growth.

Two months ago, Prada founder Miuccia Prada interviewed her perfume for the first time in an interview, in order to promote Prada's new product L 'Homme' and La Femme.

According to the Prada 2016 interim financial report, the Group recorded a net profit of 1 billion 554 million euros in the half year ended July 31st, down 14.8% compared to the same period last year.

The net sales of direct outlets decreased by 17.8%.

Although the royalty rate accounted for only 1.3% of the total revenue, the revenue generated by the company increased by 7.9%, mainly from the first Miu Miu perfume on last July.

According to data from market research firm Euromonitor International, global sales of top perfumes are expected to reach US $29 billion in 2016.

As of 2020, annual 3%-4% growth is expected.

In terms of revenue figures alone, it is difficult for fragrance products to compete with main businesses, such as leather goods and fashion.

From the Hermes earnings report, the proportion of fragrance series in revenue is roughly stable at around 5.6%.

LVMH has a higher proportion of cosmetics and fragrances, about 13.5%.

But in addition to creating revenue, perfume products are also a good tool for marketing.

Editor in chief Edward Nardoza interviewed the interface news and said, "the contribution of perfume and makeup products to the financial sector is not great, but they can effectively improve brand identification."

Luxury brands do not expect perfume to make a lot of money. Its deep role is to attract customers.

Behind the scenes is a psychological battle.

Compared to clothing and leather goods, the price of perfume is usually only 1/10 of the former, and the middle class has stepped into the luxury gate.

And as an intangible commodity, it is more convenient for the brand to shape the dream and pmit the emotion.

"Once we succeed in capturing the psychology of consumers, we can gain trust and loyalty."

Michael Burke, CEO of Louis Vuitton, is optimistic about expectations.

The competition in the perfume market is fierce. Not only the new products are competing, but the classic perfume is also competing for customers.

However, the ranking of perfume market is not so good.

Perfume nose Jacques Cavallier Belletrud once deployed Lssey Miyake's "L Eau d Issey" of life, Dior's "midnight flower" (Midnight Poison), Lancome's "bright (Magnifique)" and other classic works.

"The most sensitive noses in the world are concentrated in this town, seemingly calm and serene, but the competition is fierce," he said in Glass's perfume laboratory.

This southeastern French town began large-scale incense in seventeenth Century, and Glimard, Chiris, Roure and other spice and fragrance enterprises have risen here.

In 1919, Chanel, Dior, Hermes and other important customers came to Glass regularly to purchase Provence rose and jasmine every year.

Before World War II, the output of flowers was as high as 5000 tons.

From the Louis Vuitton fragrance office across the corridor is the seat of Fran OIS Demachy.

He is a LVMH other luxury brand Dior perfume.

This spring, Dior set up its own studio in Glass, Ch teau de La Colle Noire.

Obviously, it is also ready to make a big effort in the perfume market to consolidate its brand position.

After years of development, the industry as a whole has become saturated - not just the number of brands, but also the homogenization of products.

Although hundreds of new products are produced every year, they can be remembered by consumers.

According to NPD market research, 4 of the 5 most popular women's fragrances in 2015 were released more than 10 years ago, including the 94 year old Chanel 5 perfume.

"Luxury brands offer perfume for two main reasons: long-term profitability or direct competition."

"The success of the former is Chanel's No. 5 perfume," said Al Ries, chairman of Ries & Ries, an American consultancy.

Just before Louis Vuitton's perfume was released, Chanel first released a new version of No.5 perfume, "water of No. five (No. 5 L" EAU).

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Its creator, Chanel's new nose Olivier Polge said, "the new version is even younger."

It is not difficult to find that this old French brand is being kept close to young people.

In recent seasons, Chanel has set an important seat for Lin Yun, Lily-Rose and other Z generation stars.

This year Chanel held the "Paris in Rome" press conference in Beijing. The president of the global boutique department Bruno Pavlovsky sat at the same table with Ouyang Nana, who was born in 2000.

Those twill soft jackets, pearl accessories and small black shirts, which were famous for decades ago, are quietly changing to suit the younger market.

After setting the goal of being younger, luxury brands spend $800 million a year on perfumes, advertising, TV, outdoor, shop and magazines.

However, this traditional marketing effectiveness may not work.

A recent industry report by corney showed that more than 1/3 of consumer behavior was to replace empty bottles, and only 6% of respondents were influenced by advertisements.

If the bottle is beautiful enough, it's not impossible to buy a pearl.

Luxury brands have become more cautious when introducing new fragrances.

Distribution channel, appearance design and promotion mode are the key factors to decide whether the brand is fashionable or not.

If there is no exclusive perfume nose as a talk, bottle design can also be an important gimmick in marketing.

Nobel Hall of Fame (FF Fragrance), in addition to selecting the best perfume of the year, will also choose the packaging award.

This year's winning women's perfume is Marc Jacobs's "decadent" (Decadence), the shape is like a beautiful handbag.

Back in a year, Marc Jacobs still won the award by "Daisy dream" (Daisy Dream).

To say next year's war situation, Kenzo is likely to be called a candidate.

The Kenzo World bottle in autumn is a bit of a diversion. The Chinese designer Patrick Li made it a spectacle with a very recognizable degree.

Not only that, it belongs to the fashion brand of LVMH, but also a funny and funny advertisement for the new perfume.

American actor Margaret Qualley not only showed a dance skill in front of the camera, but also put on all sorts of strange things.

In choosing marketing channels, luxury brands also have a deeper consideration.

Hermes's collection series Hermessence and Chanel's Les Exclusive are only sold in exclusive stores.

This is to draw a line with those perfumes that can be bought in any market, including discount stores.

In September of this year, 7 Louis Vuitton fragrances were placed in 180 global retail outlets in the cylindrical glass bottle made by industrial designer Marc Newson.

At the same time, in order to enhance consumption interaction, Louis Vuitton has also opened Pop-up shops with five benchmark shopping malls, namely, Paris spring, Lok Mar, Harold, Seoul new world department store and Dubai Mall.

You can guess what materials the fragrance technician uses.

The new perfume launched by Louis Vuitton is priced at 200 euros (100ml, about 1476.06 yuan) and 300 euros (200ml, or 2214.09 yuan).

From the price point of view, they are much more expensive than commercial perfume brands, and are closer to By Kilian niche brand.

The latter often follows the wishes of the fragrance maker and is not subject to market interests.

According to L'OREAL estimates, last year the growth rate of the small perfume market was about 15%, while the global perfume market with a production value of about 15 billion euros increased by only 2.9%.

Bain's "2015 luxury industry trend report" also mentions this: consumers are more interested in personalized taste experience than ever before.

To win the pition, Karen Grant, an analyst at NPD group's beauty market analyst, is repositioning young customers.

This means that perfume brands need to be changed from flavor, pricing and packaging.

At the same time, the report also costs, positioning young people also need to reduce the packaging to adapt to their spending power.

Therefore, those who have personality, lower price and love travel perfume will be the winners in the future.

By coincidence, the new Louis Vuitton perfume offers 10ml's travel suit.

Although the new Louis Vuitton has been tested in friends circles, I'm afraid it will be a while before I want to buy it in Chinese market.

In contrast, Chanel China's fragrance is much faster.

In August 31st, Chanel's new No. 5 L 'Eau directly landed on WeChat platform.

In view of the fact that Dior had tried the water before buying the Lady Dior handbag, there was no pressure on perfume online sales.

According to corney data, perfume business revenue reached $400 million in 2015, accounting for 10% of the total revenue.

If you want to say that the biggest regret in 2016, it may still be Gucci.

After Alessandro Michele took office, he brought Gucci into the new century, and launched several popular single products. Unfortunately, there was a lack of perfume.

To say that Gucci has no perfume is not.

Not long ago, the new clown Jared Leto, who took over Gucci's Snapchat account in the movie "suicide squad", took the crime of Innocence (#GuiltyNotGuilty) as the topic, and created a series of interesting graffiti photos and filming tips for the upcoming release of Gucci's "sin (Guilty)" Eau De Toilette.

But this perfume is essentially a legacy of the former creative director, Frida Giannini.

On the NPD perfumes list, Gucci AI sin was among the top five men's fragrances in -2014 in 2011. It was replaced by Dolce Gabbana, a Italy brand, until last year, and was defeated by the Light Blue of wood fragrance.