Grim observations

Rather grim were the first observations made by the dozen participants to the roundtable organized last week, in Paris, by the association, Cosmetic Executive Women (CEW) France.

France is seeing perfume, lose each year more market shares. 66% of shoppers entering a perfumery store leave the outlet without having bought something! Whose fault is it? How can the issue be solved? A very rich debate of nearly three hours restoring in the end, some hope.

Clear-cut observations. "Too many perfumes kill perfumes! ...,a perfume can’t be compared to a brand of washing powder! .... Prohibitive prices compared to the quality of the offer ...! There is no more desire! ... A lack of listening from the industry on what consumers ’really’ want!.... A sales and marketing strategy based on short term profits ... An overall decline in quality ... Poorly trained mass retail outlets who do not properly convey the right messages on perfume brands and their fragrances..."

Meanwhile, the crisis has not helped. A crisis "which, unlike political correctness, is far from over yet", insisted Mercedes Erra, Executive President of Euro RSCG. A crisis that has further enlarged the gap between an industry standing its ground and consumers whose values have obviously been deeply impacted by the recent months of economic events. "We would have every reason to be, recalled one participant in the audience, as we belong to the million of French people who only have, altogether, 150 euros to barely manage to make ends meet at the end of each month!” It seems only normal, in such conditions, that the first purchase criterion has become "Is it useful or not?". The second one "Am I right to buy this?", the third one, "Does it please me?", the fourth one, "Can I make it myself?", the fifth one, "Can I wait for the sales?".

91% of French people wish to improve their consumption habits! They are only 60% in England to highlight the same need and 64% in the United States. What matters the most is "quality"! Other interesting changes in consumers scale of values, according to Mercedes Erra, "It’s the end with dialogue for the sake of dialogue and innovation for the sake of innovation! People want the basics, want to see the evidence of a real know-how".

A series of changes that are not going to be to everyone’s taste in the perfume industry. "To some people only", stressed José Manuel Albesa, Chief Brand Officer, Puig. "Because for our part, we tackled this issue head-on relying on the fundamentals of our business. In other words, by giving time to time, by paying more attention to criticism than to praise, by being able to stop everything and start over again regardless of the industrial and commercial commitment, and above all by doing everything in our power to insure that the product actually expresses a story! And take risks!".

What is actually changing

What has changed in recent months? Quite honestly, a lot of things even if, in the opinion of speakers, there is a long way to go from honest intentions to acts.

"In any case, the work can only be achieved together", noted Joel Palix, President of Clarins Fragrance Group. "We must return to real creation. More money needs to be invested in the product and less elsewhere. Don’t forget that a so called ’popular’ perfume only represents at best 3% of consumers! Retail channels need to be more selective about the products they accept in outlets and our contacts with customers must be the result of a true relationship".

Message received loud and clear by Miek Vercouteren, CEO of Marionnaud France, whose commitments hold in six points:

 more brand segmentation and brand selection,
 limit the offer,
 increase value added,
 pay closer attention to what consumers have to say,
 know more about the elements of "value" of the brand,
 improve the training of sales consultants.

"There has been and still are too many launches and, especially, too many unnecessary launches " adds Céline Sanzey, In charge of the perfume pole at Sephora.

"We must abandon the struggle for the gain of market shares to contribute instead altogether to market growth! I am also expecting from brands what I call ‘categorical logic’ according to existing outlets. The same brand will not express itself the same way from one outlet to the other and from one shopping environment to the other! And above all, I expect creativity!"

Now, specifically, for Chloé Jay, Director General of Keihl France’s, L’Oreal Luxury Products Division, “We must admit that creativity was not at hand. We must stop doing marketing just for the sake of marketing and try designing a ‘a great classic’. Finally, many in the industry will have done the same thing! For instance, we must review the olfactory composition, review the tests in order to take into consideration different criteria in relation with emotion, sensitivity...”

"Olfactory... , let’s talk about it" insisted Armand de Villoutreys, President of Firmenich’s Fine Fragrance World Division. "With over 900 launches per year worldwide, the industry has mechanized creation. But creation must be protected, the level of requirement must be upgraded. We need clearer briefs. It is clear that the value of the perfume element has declined over recent years and this cannot last! As for testing, one must stop ‘averaging’ the brand!"

From intentions to acts…

"A long way to go," emphasized Marc Smia, founding partner of Kea & Partners. "It is clear that the gain in market shares might kill the market. We must elaborate and set up a strategy of allies. Without a strong and powerful purpose, there is a high risk of trivialization of the market".

Yet, a major absentee at this roundtable, the whole industry of packaging and full service. "That’s right", stated José Manuel Albesa from Puig. "It’s an essential and very experienced link that we are also much more involving at the beginning of our briefs".

Three hours of debate and freely exchanged talks, between, for once, all the industry players, who demonstrated undoubtedly that the sector had perfectly-integrated all the issues and challenges. "Brands have understood the need to clarify their offer," concluded Barbara Le Portz. "In a word ...., fewer but better !... And it’s probably necessary to stop trying to please everyone by placing the consumer at the center of the game. It would be better to try and increase the market than to try and increase ones market shares. As for retail channels they have also understood the essential part they had to play in this new process that’s taking place. By upgrading the training of sales consultants. We must enchant customers again!".