Decoding next‑gen Fragrance Brands

Let’s give you some data on the market before we talk about positioning.

Global fragrance sales were around $70 billion in 2022 and are expected to reach nearly $100 billion by 2027. The fragrance category is highly profitable, with margins of up to 90% in the luxury sub-segment. The mass and masstige segments are likely to decline as consumers move upmarket and are particularly attracted to niche fragrance brands (which tend to be more luxurious). For new players, gaining credibility will be the key to success. To win customers’ hearts, brands need to offer a creative proposition and a compelling story. (Source: McKinsey, 2023)

Crafting a creative proposition begins by establishing a distinct market position. Through the brand map, we visually depict how emerging fragrance brands are positioned within the market, outlining the primary axes. The positioning of fragrance brands on this map is determined by their stylistic leanings — from classic to experimental — and their conceptual approach, whether focused on the identity of the wearer or on the nature that inspired the fragrance. Within each quadrant, finer nuances and specific orientations emerge.

A Color Bright ‘Fragrance’ Brand Map (2024)

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In the vibrant world of fragrance brands, a fundamental question resonates deeply: How do you want customers to feel when wearing your perfume? What emotions do you aim to evoke?

Understanding these essential questions is at the heart of creating a compelling brand narrative and resonating with your audience. Let’s explore how different brands navigate the complex landscape of scent perception and emotional resonance.

A Color Bright ‘Fragrance’ Brand Map (2024)

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We identified five distinct identities in the next-gen fragrance brands and conducted an in-depth analysis of how they strategically use branding to communicate their core values.

To delve deeper into the branding elements of each identity, download the deck.

In the ever-evolving landscape of fragrance brands, we discovered 5 notable trends that are currently reshaping the industry.

1. #PerfumeTok is the place to be: #PerfumeTok presents a significant opportunity for niche brands to gain exposure and engage with a wide audience. Despite challenges like overconsumption and overhype, #PerfumeTok shapes consumer preferences within the fragrance market.

2. Skincare — a new (and old) partner in crime: For some, spraying a fragrance is just a small part of their fragrance ritual. New products such as perfume primers and solid perfume balms are enhancing signature scents when combined together. As the fragrance routine continues to evolve, we will see more products at the intersection of skincare and fragrance.

3. No more genderizing: The concept of gender-specific scents is fading as fragrances become independent of biological sex. Niche brands are leading the charge in embracing this inclusive approach, reshaping industry norms and advocating for fragrance to be celebrated by everyone.

4. Discovery sets as a way in: While branding and marketing have their limits, customers yearn for firsthand encounters with scents. These meticulously curated collections offer more than just fragrance samples — they provide an opportunity to forge a deeper connection with the brand.

5. Lower the barrier: Curious about the distinctions between Extrait de Parfum and Eau de Parfum, or why perfumers opt for synthetics? Consumers want to be in the known, as revealed by Highsnobiety’s fragrance trends report. Sharing knowledge and being transparent will certainly bring trust from your audience.

Taken together, these trends point to a blooming future for the fragrance industry.