Fragrance Is Beauty’s Bright Spot. How Will the Category Perform This Holiday Season?
In 2024, the fragrance category once again outdid itself.
Indeed, the sector has been riding high since 2021, when year-over-year prestige fragrance sales surged 82 percent during the first half of the year (“Nobody could see this coming,” Larissa Jensen, senior vice president of beauty and industry adviser at Circana, told WWD at the time).
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But that initial, post-pandemic jump was only the first of many surprises that the category — and its ever-growing consumer base — has unleashed since.
Today, fragrance continues shine bright, with data from Circana showing that while the category’s growth has indeed begun to temper (at a slower pace than that of beauty overall) dollar sales still grew 14 percent year-over-year in the prestige market and two percent in mass through the third quarter of 2024.
In terms of unit sales, NIQ tracked an 11.8 percent year-over-year increase across total fragrance during the 52 weeks ending Aug. 10.
“The growth is coming from everywhere,” said Anna Mayo, vice president of beauty at NIQ. “All age groups and different racial groups are growing in terms of penetration and buy rate; more households are buying, and they’re buying more; we’re seeing growth in colognes and perfumes, but also body sprays — it really is coming from everywhere.”
This is in stark contrast to the category’s 2021-era growth, which was almost entirely driven by sales of more expensive products with stronger perfume oil concentrations.
“If it was just luxury growing right now, I would potentially say the fragrance bubble could pop sooner, but we’re seeing different areas of the market drive growth, and it isn’t reliant on one particular dynamic. That is what makes me so optimistic,” Jensen said.
Dollar growth is fastest among Gen Z, according to NIQ, which reports the cohort’s cologne and perfume spend is up 60.7 percent year-over-year, followed by Millennials’ 26.2 percent growth in spend. When it comes to body sprays specifically, though, it’s actually Gen X that comes in second after Gen Z by growth, with the group’s spend in the category increasing 21.4 percent year-over-year.
While the body mist boom is most prevalent in the mass market, data from Circana shows sales of prestige body sprays, too, have grown 108 percent this year as high-end brands look to maximize entry-level and value-friendly offerings within their assortments.
“A major dynamic in fragrance this year is this concept of high-low, where the luxury side of the business has been performing well, and so has the more value side — value in size, format and so on,” Jensen said.
Black Friday and Beyond
These themes are expected to prove especially key through the holiday shopping season, when nearly half of annual fragrance sales are made. (In 2023, 48 percent of fragrance sales occurred during the 12-week period from October through December, per NIQ.)
“All signs point toward a successful holiday season for fragrance this year,” said Mayo, adding that from a channel point of view, too, the category’s growth is firing on nearly all cylinders — from beauty specialty to department stores to mass stores and on Amazon and TikTok Shop.
Black Friday numbers indicate fragrance is off to a strong start this holiday season, with Circana reporting fragrance unit sales grew 11 percent during the week of Black Friday, outpacing the total beauty industry’s unit sales growth of 6 percent.
According to Adobe Digital Insights, sample and discovery sets comprised roughly 27 percent of fragrance sales during the five-day period between Thanksgiving and Cyber Monday this year. Steep discounts, meanwhile, drove consumers to purchase fragrance offerings that were “about 26 percent more expensive, on average, than those they were buying in October,” said Vivek Pandya, lead analyst, Adobe Digital Insights.
But even when consumers are willing to splurge, they’re still prioritizing finding the best deal — and the holidays allow them increased flexibility in this pursuit.
“When you have more players, consumers have more choice, and that can help bring prices down. Especially when you think about what these players are competing on — sure, efficient shipping and good return policies — but really, the key thing they’re competing on is price,” Pandya said.
Fragrance Trends at Retail
At key fragrance destinations like Ulta Beauty, Sephora and Macy’s, this emphasis on value is manifesting in a few ways.
While Macy’s isn’t yet dabbling in the body and hair mist spaces, it has ramped up its fragrance kit and “Under $100” assortments.
“They’re a great way for the younger consumer to come in and experience a fragrance for the first time, and an opportunity for us, specifically in the digital space, to resonate with the online customer, who is a little more price-conscious,” said Jen Capuano, vice president of fragrance at Macy’s Inc., which is said to be the largest fragrance retailer in the U.S.
Sephora, too, is “focused on fragrance exploration and discovery” for the holidays via seasonal gift sets, said Carye Campbell, vice president of merchandising. “We’ve noticed an evolution in the way clients shop fragrance, where they’re turning to scent as a part of their everyday self care routines and building fragrance ‘wardrobes’ to complement their moods and various occasions.”
Chriselle Lim’s Phlur, which is heading toward $100 million in sales this year, is among the brands championing this concept, integrating scent wardrobing and an array of formats into its approach.
“We view Phlur more like a fashion brand than a traditional fragrance brand, where we do multiple drops a year and are seeing our core consumer come back for almost all of the drops — across categories, too,” Lim said. “It’s not like people who want fine fragrance only want eau de parfums — we’re seeing that same customer go into deodorant, exploring body care and vice versa.”
Ulta reports strong growth among Gen Z in fragrance mists from brands like Sol de Janeiro, Le Monde Gourmande and Tree Hut, while Millennial and Gen X consumers are engaging with the retailer’s prestige and designer offerings at higher rates. “We’re seeing travel sizes and gift sets dominate in the category…and a rise in demand for unique formats like fragrance solids, bi-phase oils and alcohol-free formulas,” said Maria Salcedo, senior vice president of merchandising.
On TikTok Shop, fragrance revenues reached $116.8 million for the year ending October 2024, with top performers including accessibly-priced TikTok breakout brands like Aroma Concepts and Lattafa, as well as Phlur and “dupe” fragrance brand Dossier.
“Our fragrance business has quadrupled from the start of this year; it’s growing ahead of the platform,” said Ajay Salpekar, head of beauty and personal care at TikTok Shop, adding that oud offerings, story-driven creator collaborations, and discovery sets — which Dossier has seen particular success with — are among the biggest drivers.
The Category’s Next Frontiers
There’s also the matter of the burgeoning male fragrance consumer, with Circana reporting that even though men’s fragrances only comprise a third of the business overall, the segment’s growth this year has outpaced that of overall prestige fragrance. Ulta Beauty cited the strength of men’s and unisex scents as an important contributor to growth in its third quarter earnings report released last week.
“Macy’s has always had a strong men’s presence, but the category has accelerated for us over the last six to eight months — brands like Jean Paul Gaultier and Armani have really stood out,” Capuano said.
Fragrance is also poised to see an additional holiday boost from TikTok-influenced Gen Alpha, whose footholds in prestige beauty have been growing over the last year.
“Prestige beauty is competing with toys now,” said Jensen, adding that households with children under the age of 18 gained eight share points this year in spend on prestige body sprays, and also demonstrated the highest increase in intent to spend on beauty this last year over any other group.
Private label fragrances, meanwhile, are playing a significant role in mass market fragrance sales, according to Jensen.
“We’re seeing fragrance growth soften, but it’s still there — and because there are so many different things driving fragrance, it’s likely we’ll continue to have growth over the next several years,” she said.
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