Spanish company Puig’s Chief Operating Officer Javier Bach kicked off the Knowledge Hub sessions on the second day of Beauty Tech Live with in an interview where he gave his views on selling fragrance online. Pre-COVID-19 Bach had projected that the online penetration of the fragrance category would reach 25% by 2025; however, with the shift to online caused by the pandemic, the category’s online share went from 12% to 13% for prestige fragrance in 2019 to 24% in 2020.
The company predicts that fragrance’s share of online will continue to grow for a variety of reasons, including growth of fragrance in China and the country’s high online penetration, the investments that brands and retailers are making in online and the development of the online business in the travel-retail channel.
Brick-and-mortar’s future
Nonetheless, physical stores will “still be very relevant” for the category, Bach said.
Online provides convenience, he added, and with the channel’s projected growth, retailers and brands need to rethink the role of shops. Brick-and-mortar will need to become more experiential and shoppers will go to stores if there is a reason, Bach said, whether it be educational or for entertainment. “We rely on stores to play that part of the journey and we will continue investing there,” he added.
While online can offer attractive discounts not always found in stores, during the pandemic Puig saw that consumers did not go the cheapest offer, but their trusted retailer. Bach noted the trust that retailers and brands build with consumers is a priority, commenting on the importance of loyalty programs. Additionally, young consumers prefer to buy from the brand directly and have a direct relationship with brands.
Online options
To stand out in the online environment, Bach noted that brands need to “master the omnichannel connection and conversion of consumers,” and that brands need to understand their consumers and add value to each touchpoint of the shopping journey.
He stressed the importance of getting the basics right and perfect execution. Bach added that to stand out in today’s crowded e-commerce environment, brands need to make sure they are executing well when it comes to search, visibility, product availability and ratings and reviews.
“There will be a fight on traffic and visibility and it’s going to be more expensive, but it’s a natural game, no? If there’s more demand then prices will go up,” Bach commented. Key is to making the path to purchase as seamless and quick as possible. If there are “too many clicks to buy, [it] will not happen.”
Fostering product discovery online
Encouraging trial, especially of new scents is important, but remains difficult given that fragrances cannot be smelled in an online setting. In a bid to counter this, Puig developed a proprietary technology called Fragrance Profiler that allows shoppers to develop their own olfactive profile. Bach says it is the largest perfume database with images, ingredients and keywords. “It is the closest approach to being able to smell through images and words.”
The technology allows retailers to do more targeted sampling. Puig has implemented it on its websites and with some retailer partners and the company says it has seen strong results in terms of conversion and engagement.
Sampling and discovery sets will continue to be key as 85% of consumers who buy fragrance online have smelled the fragrance before, says Bach.
Delivery service and logistics will also need to deliver a premium experience to stay competitive, he added. As online becomes more popular, shoppers expect same-day or next-day delivery. Bach noted that in the days leading up to Christmas, online sales were declining due to consumers’ distrust in brands’ and retailers’ ability to ship on time.
Puig is also continuing to focus on using technology to empower its beauty advisors. Bach pointed to the company’s Air Parfum. The technology helps with saturation when sampling fragrance.