Comments on: Shop til you drop

By: AlbertCAN

AlbertCAN — Sat, 14 Nov 2009 05:46:01 +0000

Oops…RossM please refer to my explanation below–I’m not the smartest with technology sometimes! It wasn’t my intention to make anyone feel inferior so sorry. And you did bring up a really important point: the article could have fooled me until I looked at what on earth was increased.

By: AlbertCAN

AlbertCAN — Sat, 14 Nov 2009 05:38:07 +0000

Sorry totally not my intention! What I meant is that either the retailers will, like you’ve said, stock up on the hit fragrances, or the decision makers will realize that hey, the increase is based on dollars increased only!

And without knowing what happened to the units sold the increase might due to many things, either because people are responding to the promotions…or it’s because the senior managers have jacked up the prices (which I know many had done this year).

If people are responding to the promotions then great, keep it up–if not then the increase will be kind of hollow because a bunch of factors will eat up the extra money: I talked about inflation because it affects almost everything else–labour, production and material costs, all of which eat away the increase…

So hopefully senior decision makers will look at that article and make some smart choices and not simply shout, “Great! We are on a roll!” To me either management will, say, boost holiday offerings with great promotions because they believe in the bump…or they will see the luxury fragrance business remain flatish for the year (translation: more cost-cutting measures).

The bottom line is…we don’t know what will happen just yet. The signals are mixed. It’s time like this that the senior management needs to justify their salaries by making some really smart decisions based on the info available.

By: RossM

RossM — Sat, 14 Nov 2009 04:45:38 +0000

Wow, smart people make me feel SO inferior. Thanks for the info. Albert, although it’s going to take me a couple of weeks to actually understand it!

By: Robin

Robin — Sat, 14 Nov 2009 02:11:29 +0000

Thanks Albert!

By: AlbertCAN

AlbertCAN — Fri, 13 Nov 2009 20:36:59 +0000

PS. Natural inflation rate is quoted on an annual basis (sorry) and I don’t have this year’s data handy.

By: AlbertCAN

AlbertCAN — Fri, 13 Nov 2009 20:28:34 +0000

It’s not necessarily useless, though bullship effect can happen if taking the carefully worded info at face value: the 2% rise in the $75 and $99.99 segment and the 4% increase in the over $100 category are quoted are measuring dollars increase (the Happi article didn’t talk about the associated change in sales units, which I would be curious to learn). To me the rise in dollars increase points to 2 things: either the current trend in fragrance promotion is kicking in (gift with purchase is the ritual du jour according to WWD) or the price adjustments on some products earlier this year is the cause.

I think many studious macroeconomics student will tell you that the natural annual inflation rate is about 2% to 3% barring no extraneous circumstances that would cause deflations. So either those 2 segments are relatively constant on a like to like basis, or this holiday companies will have to focus on up-selling and cross-selling strategies more.

I don’t know if this will help but a former account executive from L’Oréal once told me that people in the fragrance industry seldomly forecast down. Generally people find a positive note on retail strategies so even the NPD numbers are modified accordingly. Yes, the NPD numbers are widely used (memorized by some even) but numbers are just numbers unless people use them wisely to hopefully make astute business decisions.

By: Robin

Robin — Fri, 13 Nov 2009 14:54:59 +0000

I don’t have any way of knowing how useful it is…perhaps retailers have found it a useful measure in the past, perhaps not! But NPD numbers are widely used in the industry.

By: RossM

RossM — Fri, 13 Nov 2009 04:01:51 +0000

Is it just me or does anyone else think that this survey has produced a completely useless bit of information?
More people are planning to purchase fragrance this Christmas and so what if they don’t? What if they changed their minds or they came across a great deal on toasters or whatever?
Are retailers supposed to stock up to the hilt of fragrance this year based on this survey?

By: Robin

Robin — Fri, 13 Nov 2009 02:06:28 +0000

I think the fragrance industry would be more than happy if you just bought yourself a bottle or two, LOL…

And I don’t tend to give fragrance gifts either, at least, not “unsniffed”.

By: prism

prism — Fri, 13 Nov 2009 00:49:35 +0000

my friends generally hate to get fragrances as presents. unless it’s something they have and love and is about to run out.