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The rise of fashion power houses in the fragrance industry
Fashion houses have successfully diversified their product lines by introducing fragrances. Strong brand reputation and a loyal consumer base means companies have a ready-made consumer base; and are able to leverage their brand identity to give them a head-start in this fiercely competitive market. Moreover many fragrance manufacturers are seeking growth in emerging markets such as China and India due to weak consumer spending during economic downturn most notably in Western Europe markets.
The strong brand reputation and loyal consumer base means fashion power houses, such as Dior, have a ready-made consumer base; leveraging their brand identity to give them a head-start in the fiercely competitive market. Smelling fragrances is not always feasible therefore strong branding is deployed to establish loyalty for manufacturers. Due to Dior’s successful position within the fragrances category; the company does not have to focus on the lowest end of the market to increase its consumer base. By extending its offering to lower tier consumers, Dior will broaden its target market however; the company will run the risk of over-extension. This is brand dilution where the brand can lose its brand associations with quality, price or reputation.
The success of such luxury/ premium retail brands into the fragrance industry; has given rise to high street fashion retailers such as Zara (an Inditex brand) entering the fragrance industry. Zara has 78 perfumes within its fragrance portfolio and the earliest edition was created in 1999 and the latest in 2013. Ranges include Amber, Sandalo and ii Homme (for men) and Blueberry, Bulgarian Rose and Cherry (for women) amongst many others. It is interesting to note that Zara’s fragrance is sold online through third party distributor such as fragrantica.com. It seems that Zara’s official websites aims to focus on apparel retail. The growing success of Zara may mean that this brand moves into premium/luxury category allowing its fragrances to also move up.
For further information on marketing strategies adopted by fragrance producers, product diversification, and opportunities and threats in the fragrance industry; see our report on MarketLine, The fragrance industry: the success of product diversification.