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    • The surprising reason perfume prices are skyrocketing

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    The price of premium perfumes recently soared by levels typically never seen for luxury fragrances. But don't blame — the reasons have more to do with consumer behaviour in times of stress and uncertainty.

    The average retail price for fragrances rose by 15% in 2021 compared to 2020, triple the average 5% increase during the prior two year, according to the latest data from market research firm NPD.

    "General inflation is not necessarily the story here. We started to see this swell of growth during the pandemic where consumers were willing to trade up to more premium fragrances," said Larissa Jensen, NPD vice president and beauty industry adviser.

    "We theorized that people were looking to treat themselves with little luxuries during these difficult times," she said. "Scents allow us to escape, even momentarily, and experience a different emotion."

    American shoppers are for all kinds of products, like food, furniture, clothes, shoes and cars. Beauty and other self-care purchases are no exception

    Fragrance sales have boomed through the pandemic, fuelled by robust demand for higher-priced eau de parfums --— perfumes with a higher percentage of fragrance oils that make the scent last longer once applied. Looking at perfumes alone (excluding home scents), sales last year surged 52% over 2020.

    In the category, fragrances priced over US$175 more than doubled in the number of units sold 2021, the report said.

    AN AIR OF RETIREMENT

    Prestige fragrances maker Estée Lauder Companies is seeing that trend reflected in its sales, said Stephane de La Faverie, the company's group president.

    Also serving as global brand president of Estée Lauder and AERIN, De La Faverie oversees the company's portfolio of prestige fragrances including Jo Malone London, Le Labo and By Kilian as well as Estée Lauder fragrances and AERIN fragrances. Demand for luxury perfumes is being driven by consumers who want a scent that is unique and made with more refined ingredients.

    "We are very optimistic that the interest in luxury fragrances will continue thanks to exciting innovations, new fragrance markets embracing this sub-category and consumers always wanting a little piece of luxury in their lives," said La Faverie.

    As consumers increasingly gravitate to more upscale fragrances, he said the company is trying to encourage purchases by offering incentives such as trial via sampling, gifting, and engaging with them in a personalized way through virtual consultations.

    It's a strategy leveraged by perfume subscription service Scentbird, which sends its 450,000 subscribers trial-size spray vials of luxury fragrances for $15.95 month. The idea is to help shoppers find their perfect fragrance match before they commit to buying a full-size bottle.

    Scentbird's subscribers jumped 50% in 2020 — the first year of the pandemic — over 2019, said Bettina O'Neill, the company's senior vice president of business development, merchandising and wholesale.

    "We learned that as more people were homebound because of the pandemic restrictions, they were finding ways to still feel good," said O'Neill "They were buying fragrances for themselves and scented candles and fragrances for their homes."

    Prestige perfumes typically have a higher concentration of oils and use more expensive raw ingredients, she explained, so as demand soars, so can production costs.

    "Chanel No. 5 is one of the best known examples of this. One of the ingredients is a ," said O'Neill. "Another popular prestige fragrance is Baccarat Rouge 540" by Maison Francis Kurkdjian, originally for Baccarat.

    The fragrance, which costs upward of $300 for a 2.4 ounce bottle to more than $600 for an 6.8 ounce bottlle, includes a blend of expensive ingredients like jasmine and saffron. If Tiktok is an indicator of its popularity, has 124.1 million views on the platform.

    NPD's Jensen said it remains to be seen if demand for higher-priced perfumes will hold up as consumers are now paying even more on everyday necessities.

    "We don't expect it will keep growing at such a robust rate," she said, adding that NPD could see the luxe fragrance category leveling off.

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