A waste of money? Millions spent on marketing but Chanel continues to dominate sales

A waste of money? Millions spent on marketing but Chanel continues to dominate sales

A report released by management consultancy AT Kearney has suggested that the US$800 million spent on marketing fragrances each year in the US is a waste of money, given that the top 5 fragrances by sales have remained largely unchanged for the last five years. The report described fragrance manufacturers as ‘stuck in an expensive marketing cycle’.

Chanel’s Coco Mademoiselle, Chance Eau Tendre and No.5 have held their position in the top 5 for the last five years, together with Dolce & Gabbana’s Light Blue. Despite a brief appearance from Victor & Rolf’s Flowerbomb, Marc Jacobs’ Daisy is the only scent to break into the bestsellers list, and hold that position for any length of time, according to the report.

Indeed, after surveying over 800 shoppers, AT Kearney found that consumers are unfailingly loyal to their signature scents, with 34 percent of purchases representing direct replacements. In store promotions and advertising go largely unnoticed, while just 6 percent of respondents said they were influenced to buy a scent after watching a TV spot. However, in-store trials can generate impulse buys, with 12 percent spurred on to buy after sampling in-store.

AT Keaney suggested that, from an ROI perspective, the money would be better spent on advising and educating consumers with a personalized approach that takes into account their taste and preferences.

The consultancy also pointed to the challenge of reaching online shoppers, noting that these consumers are even less likely to stray from their intended purchase, and are more motivated by a wide range, free shipping and low prices than marketing and peer reviews.