A recent meeting of AJAX Singapore investors centered on driving bottom line results in the competitive cosmetics/fragrance sector. According to Lashray AJAX, "We’re considering that top growth priorities are driven by introducing new products that offer captivating differentiation. After all, shopping is entertainment. Even in the shifting throes of the global downturn, the cosmetics sector reflects consumers’ desires to experience new, fun and interesting products. Tracking performance data on brick and mortar retail outlets, internet and other sales venues reflect there’s a mounting danger of not addressing the consumer’s drive for unique, memorable product experiences. We’re running into sameness."

 

The meeting held in closed door session, discussed a range of issues. “Our group reflects the general consensus that the cosmetics retail playing field - especially fragrances - is experiencing homogenization. It’s all running together.  It’s looking the same, and it’s all smelling the same”, said one member of the team.   “When you look at fragrance and cosmetics products, the field is in the hands of just a few designers who keep re-working ideas and trends that are dictating looks, formulas and expectations. We’re in the throes of boredom; we’re in a rut. We’re not courting the kind of rich cultural textures reflected in larger media such as rock concerts, or say contemporary cinema productions that reflect global content.”

 

Further commenting was David Ling Wu of Global Partners. ”The contemporary fragrance and cosmetics industry is all about sleek modern contempo space-age design which is fine in mass production economics, except it isn’t communicating as well in counteracting malaise. Paradigms are getting old. Consumers’ desires for products should drive the market since marketing efforts only can go so far. Our research says there’s a perception that today’s products are all formulated and dressed as interchangeable options.”

 

Lashray commented, “The customer continues with us, but how long can it go before they’re saying – been there, done that, had that? Actually, the consumer is saying it now. To stay ahead, the industry is powered by newness. But that has limitations given the same iterated design structures. One mall looks like the next one. One product looks and smells like another. It’s important to stay ahead so sales figures increase - not stagnate. And we are seeing stagnation in American malls; it’s not just about the lingering recession. If options are the same, why bother to go?”

 

According to Marton Heralssen, at least 25% of in-store perfume markets are driven by new product introductions but the newness factor is difficult to access. “New introductions are slow to come to market and they’re almost never exclusive to the vendor. In an ideal world, retail would generate newness at the pace they need it, control the flow, own the market on the product. Of course, manufacturing outlets occupy this strategy but they are not particularly nimble. Fragrance product acquisition for retailers is a priority, but new available products are seemingly generic, even in the luxury tier. I say this because perfume design is in the hands of just a few consolidated players. Perfume production companies pick up on a celebrity or a fashion designer and use their in-house perfume design team and noses, but the end result is rooted in sameness. Internet buzz says two of the newest fragrance introductions are simply versions of Thiery Mugler’s Angel. The newest launch on the market Tory Burch is a watered version of Lauder’s “Happy” by Clinique. Consumers know the difference. You can’t fool them.”

 

Lashray opined “At one time in the 1980’s and 1990’s creative invention was headed by a company, Parfums J’Aree Hage’. Mega creativity went into Hage’ that proposed and created a world tour of perfumes. And they were thinking of doing skincare. Well, they didn’t market skincare as far as I know. But on the fragrance business, their textures, their scents, and their packaging exposure was unbelievable in short runs that all sold out at primo locations of Bullocks in southern California. Of course it all sold with a high demand because it was not just different but wonderfully so. The way each product smelled was unbelievable, almost addictive and customers responded to it. Lines formed in the stores with waiting lists. The kind of thing we don’t see today. Retail needs to experience that kind of excitement.”  

         

Ling went on record commenting, “The days of excitement are not over in certain market segments since it’s still about product and not necessarily about brand. Yes, a segment of the market says it’s got to be a well-known name on par with Gucci to generate hot sales - but that’s not the total reality. There’s another reality that says it’s about the in-store, web-based, or say, television experience of being offered an incredible product. When you look at J’Aree Hage’, they were known for embracing an individualist style of luxury that generated top commerce. They understood how to get and keep the excitement going on visual, smell and mind levels.  I would say they were “above trend” in that they understood the WOW factor in keying products to customer curiosity, fantasy and desire.”

 

Heralssen concluded commenting, “Hage’ formulas were like dimensional pieces of spandex  that changed to fit each individual and became a person’s scent signature. People drooled over the perfume and the genius packaging. While the products represented the ultimate luxury tier, Hage’ understood the basic acquisitive instinct of the consumer which remains timeless. They understood that different, exquisite, and entertaining products drive sales. They created a big and changing library of formulas that seemed better than what is out there now. Today’s retailers and shoppers need a dose of that.”