edia platforms like Instagram in 2010 and TikTok in 2016, which have made it easier for memes and fads to go viral and – just as rapidly – fade into obscurity. At the same time, the algorithmic nature of the platforms means thatdifferent people are being exposed to different content based on their interests. “We don’t see the monolithic, agenda-setting trends of the 1990s, be that grunge or Calvin Klien’s minimalism,” Tully Walter, trend forecaster and cultural strategist at Soon Future Studies, told Inside Retail. “All of our eyes and ears were roughly on the same thing at some stage of the day. You could walk into work and there would be a great chance you and I watched the same thing on TV last night. Now, literally every person you know would have watched at least three different things from three different sources last night. We are in a new paradigm.” Nowhere is this more apparent than in the fragrance industry, where many long-established juggernauts like Chanel, Yves Saint Laurent or Christian Dior are facing increased competition from a new class of niche brands introducing themselves on social media apps like TikTok, and tapping into a range of consumer sub-groups that had previously been overlooked. The state of the fragrance market The rise of niche fragrance brands comes at a time of overall growth in the sector. While multiple categories within the broader beauty industry, like colour cosmetics, experienced a drop in sales during the pandemic, fragrance sales have grown exponentially in the past few years. In the first quarter of 2021, fragrance sales were up 45 percent from the year prior, despite the average retail price for fragrance products growing by 15 percent in the same time period. Data from Market.us shows the global fragrance market was valued at $49.8 billion in 2022, and is expected to reach $86.3 billion by 2032, reflecting a compound annual growth rate (CAGR) of 5.8 percent.In the US, revenue in the fragrance market is expected to reach $9 billion by the end of 2023, with 58 percent of sales attributable to non-luxury goods, market research firm Statista states. Olya Bar, head of digital marketing and communications at Twisted Lily, an online retailer specialising in luxury and hard-to-find niche and indie fragrances from around the world, described this uptick in consumer demand as a pivotal shift in the industry. “The year 2021 proved to be an extraordinary period, undoubtedly shaped by the pandemic, which had a profound influence on consumer behaviour,” Bar said. “While people were confined to their homes, fragrance emerged as a unique and powerful product that provided an unparalleled escape – both emotionally and mentally. Countless consumers openly expressed how the process of exploring newfragrances brought comfort, transported their minds, and created a new sense of entertainment that was fairly easy to access.” Notably, the way many consumers discovered and purchased fragrances during the pandemic was online and on their phones. TikTok had just exploded in popularity, and niche brands suddenly found themselves in front of a captive audience. TikTok and the rise of niche brands Pre-pandemic, the experience of buying a bottle of perfume relied strongly on bricks-and-mortar stores and the consumer’s sense of smell. Unlike retail categories like fashion, which had largely figured out howto translate their offerings online – you can still see what an item of clothing looks like, even if you can’t try it on – fragrances proved much more difficult to sell online. With the meteoric rise of TikTok in 2019, however, came a wealth of perfume-related content and new, fragrance-focused influencers like Fumi Monet, Kudzi Chikumbu, and Olivia VanDerMillen, who sold perfume more by the concept than the scent of the product itself. In 2022, TikTok was responsible for 45 percent of all social media-driven fragrance purchases in the US, NPD data shows. And as of this August, the hashtag #perfumetok has garnered over 4 billion views and fragrancetok over 1 billion views. The ones that have benefited the most from this changing state of play are newer, niche brands, said Linda G. Levy, president of The Fragrance Foundation. “During the pandemic, there was a shift from just going into a store and smelling [a] fragrance,” Levy said. “It created the ability for an open audience to experience the storytelling and entertainment value, or the in-depth information of ingredients. “For small brands starting, everything became equal. L’Oreal, LVMH, Coty, all the biggest companies, were just learning about social media, and these little baby companies were relying totally on it. It was no longer about running television commercials or magazine spreads, it was about telling the story.” One example of this is Austin-based fragrance brand Phlur, which launched in 2015, and is now owned and creatively directed by fashion influencer Chriselle Lim. After acquiring the company in 2021, one of the first products Lim launched was a scent titled Missing Person. As part of the marketing campaign, influencers were sent a plain, white shirt with directions to spray the fragrance upon it and recollect the scent of a loved person missing from their lives, such as a former lover or friend. Another niche brand that understands the power of a creative narrative is Snif. Founded in 2020, it recently clinched a partnership with Ulta Beauty, and is now available in more than 500 bricks-and-mortar stores. Snif has positioned itself as an ‘accessible luxury’ fragrance brand, and offers both conventional and unique scents, from more standard citrus or floral aromas, to ones that smell like gasoline (Dead Dinosaur), or a freshly baked croissant (Crumb Couture). Also targeting the ‘accessible luxury’ space is Elorea, an up-and-coming fragrance brand that draws inspiration for everything from its scent profiles to its marketing visuals from South Korean culture. Founded in 2022, it has a bricks-and-mortar presence in Lower Manhattan that is part-store, part-cafe, andpart-art gallery, and has been widely covered by the media. The waning strength of brand loyalty The same factors that gave rise to niche brands over the course of the pandemic also led to the diminishment of brand loyalty. A report from McKinsey & Company concluded that 39 percent of consumers, primarily Gen Z and Millennials, deserted trusted brands for new ones. Unlike previous generations, which remained loyal to one scent for most of their lives, like Yves Saint Laurent’s Opium in the ’80s or Calvin Klein’s CK One in the ’90s, younger consumers are more interested in building what is dubbed a ‘fragrance wardrobe,’ and having multiple scents in rotation to fit a variety of moods and style aesthetics. Ulta Beauty’s vice president of merchandising, Penny Coy, has observed this change first-hand, in the way customers interact with the retailer’s product offering. “We are now seeing guests experiment across brands, price points and formats to build a wardrobe all their own,” Coy explained. “Perhaps what makes the category so fascinating is that there are no rules infragrance, so consumers today are more willing to branch out from the familiar and are expanding their collection to include a combination of classic fragrances and newer brands as well as unisex options.” While heritage brands still have the biggest share of the overall fragrance market – Circana data shows the two top-selling fragrances in the US in summer 2022 were Dior Sauvage and Chanel Bleu de Chanel – it’s clear that more affordable and independent brands are penetrating the market more effectively than ever before. Spate’s Fragrance Trends Report from July this year states that the most-searched-for personal fragrance brands include a mix of heritage brands, such as Versace (581.8K) and Burberry (351.4K), and attainable brands like Glossier (140.6K) and Sol de Janeiro (64.1K). A list of the Top 100 Fragrance Brands Trending on Instagram by cosmetics market research firm Mintoiro in June found that Billie Eilish Fragrances and Kayali Fragrances were numbers one and two, respectively. South Korean brand Tamburins also made the top 10, amongst luxury fragrance brands like Kilian and Mugler. The big-name brands could learn a thing or two from these indie players about engaging consumerson social media and creating innovative brand narratives to future-proof their position in the market. And in fact, Yves Saint Laurent may be doing just that. This August, the luxury brand launched MYSLF, a new scent that taps into several trends Gen Z favours, such as wordplay, gender-neutral marketing, and sustainability. The name of the fragrance can be read in multiple ways: either as ‘myself’ or, as Yves Saint Laurent Beauty’s international general manager Stephan Bezy explained, it can be broken down into an ‘M’ for masculine, ‘YSL,’ and ‘F’ for feminine. Also, leaning into Gen Z’s desire for more eco-friendly packaging, the refillable bottle is made of recycled glass, and the box is Forest Stewardship Council-certified mix. This story first appeared in the September 2023 issue of Inside Retail US magazine.