Celebrity fragrances: What price, fame?
France, no doubt the industry's noses and company executives will
discuss Estée Lauder's Sean John and Beyoncé fragrances and Britney
Spears' collaboration with Elizabeth Arden. But what, asks
Louise Sheridan, sparks the decision to involve a celebrity in
the development and marketing of a new product?
Simply put, the perfume industry is big business and celebrity sells. According to market research company Euromonitor, the fragrance industry was worth US$ 22.4 billion (€18.5 bn) last year, for fragrance sales alone, not including extended product lines. Of that, premium brands accounted for nearly US$15 billion (€12 bn), and products with mass-market appeal US$ 7.7 billion (€6 bn).
Everyone is hoping to emulate the success of Glow by J Lo, launched in 2002 by Coty's prestige arm Lancaster. In its first month, sales of the fragrance amounted to US$18 million (€15 m), which led Lancaster to forecast US$47 million (€39 m) for the year. Even that prediction would proved to be an underestimate as sales reached that level in less than six months.
Another lucrative deal for Coty was its agreement to launch a perfume with Celine Dion. Sales of Celine Dion Parfums amounted to US$11.7 million in 2003, making it the ninth-best-selling women's fragrance of 2003. It was the only debut fragrance line to make the top 10.
Tapping into the zeitgeist
But trying to tap into the zeitgeist can be risky, explained Dr Tony Curtis, a senior lecturer in business policy and international business at Plymouth Business School. Curtis contributes to a European cosmetic and fragrance masters course, which is offered jointly with the Versailles Perfumery School at the University of Versailles.
"You have to look at the platforming, the marketing of the fragrance. It isn't a simple formula. If you get it right, the whole package, not just the odour, for the company it's the equivalent of winning the lottery. But it's about as scientific as putting money on horses. A couple of hundred new perfumes are launched every year in the UK but few of these products succeed, it's only every now and again that one of these products will turn into a classic."
How does one determine success and failure?
Fragrance consultant and chairman of the Fragrance Foundation UK John Ayres said: "More than 200 new perfumes were launched in the UK last year, and more than 300 worldwide. Since 1990, each year has witnessed an additional 20-30 new launches on the previous year's figures. The success or failure of these products is relative. It depends on the company's business objectives."
One of the most recent examples of this is Burberry Brit, which has exceeded the objectives that were set in the business plan. But trying to learn lessons when a new product launch does not achieve its targets is not so easy, as Ayres pointed out: "Companies are quite happy with their successes, but they want to forget their failures."
A lot rides on the marketing and advertising, which by its very nature in the fragrance industry is aspirational. "When you bring in a celebrity, it is a bit of a risk," conceded Ayres. Just as it is difficult to obtain any facts and figures relating to the success or failure of fragrance launches, it's equally difficult to try and quantify the celebrity factor.
So: What price, fame?
Attributed to Benjamin Franklin, "What price, fame?" was originally intended as a comment on the evils of fame, but cosmetics and fragrance companies seem to be taking the comment literally, asking the latest rising stars in the music and acting worlds to name their price and sign on the dotted line.
Plymouth Business School's Dr Curtis compared the process of launching a fragrance to individuals starting up in business. He pointed out that, statistically, more than two thirds of new businesses end in failure. People buy into franchises because of the safety factor; the associated risks are not so great.
The same applies when a company launches a new fragrance. While there is a risk, collaborating with a celebrity effectively enables the company to buy into the celebrity's franchise, to capitalise upon an existing brand and reduce the risk. But even then success is not guaranteed.
"It has to be a totally integrated mix," said Curtis. "The package, the odour, the message and the halo of celebrity endorsement, they all have to be right. It is an olfactory message, but it's got to be as one with the rest of the mix."
"People are looking for a lifestyle, whether it's sunglasses or a car or a bottle of perfume, and celebrity endorsements are part of that lifestyle that's being offered. In part, it's being aware of who people aspire to want to be like -- David Beckham is a good example of this," he added.
But, Curtis cautioned: "It's not necessarily enough to just tack on a name. It's much more likely to happen if there is total integration, it's a complete product mix, because people aren't just buying the perfume, they are buying the lifestyle."
One can see the attraction for Estée Lauder in trying to sell the 'Sean John' lifestyle, because it appears to be a lifestyle that many people want to buy into. Established five years ago, Sean Combs' Sean John Clothing is now one of the most successful lines created by a music star, racking up retail sales of US$300 million (€250 m) last year alone.
But if a company like Estée Lauder rides on the coat-tails of stars on the way up, does it not stand to slide with them on the way down? And how does the company's more classic image fit with the 'bling bling' world of hip hop and rap artist Sean 'P Diddy' Combs -- is Estée Lauder not in danger of alienating some of its existing clientele?
Euromonitor's IMIS account manager for cosmetics and toiletries Claire Briney thought not. "Estée Lauder is quite good at keeping its brands separate, for example they've managed to do this will both Stila and Jo Malone. They buy a brand and help it develop, but keep its niche appeal."
The market for a Sean John fragrance line should appeal to young, male consumers, both of which are growing markets. Briney said that launching fragrances at a teenage market dates back to 1996 when Nina Ricci launched La Belle de Ricci, the first premium product specifically targeted towards teenagers. "Teenagers can spend and will spend," she added.
And they do. In fact, according to Euromonitor, in 2003, the market for premium products grew by 3 per cent, and mass-market products 4.4 per cent and the growth rate for fragrance sales continues to rise. As for the celebrities, only time will tell whether today's fragrance endorsement amounts to a fleeting top note, or a more enduring money-making base note.