At the FT Business of Luxury Summit 2024, Stéphane de La Faverie, executive group president of The Estée Lauder Companies, discussed the evolution of the luxury industry from a pyramid structure to an hourglass model. He said: ‘Luxury is experiencing tremendous growth, especially at the base of the pyramid. The middle segment is being squeezed, but once you deliver the right experience, countless opportunities emerge at the top of the hourglass.’
This pursuit of the perfect experience is exactly what luxury fragrance retailers are focusing on, in a bid to provide more immersive and personalised guilded experiences. The concept of The Future Laboratory’s Guilded Luxury emphasises brands curating bespoke experiences for diverse consumers, offering tailored services that cultivate a deeper sense of engagement and belonging.
Online luxury perfume sales are projected to grow at a compound annual growth rate (CAGR) of 6.8% between 2024 and 2030, but the majority (74%) of sales still happen offline, according to Grand View Research, as customers favour the rich sensory experience, the ability to sample scents, expert guidance and the immediate gratification of in-store shopping. In January 2024, Chanel opened its first store in Mumbai, India, dedicated to skincare, cosmetics and fragrances to meet the local demand for a beauty-only boutique.
‘The in-store experience will remain crucial for experiencing and discovering fragrances, given that scent is a medium that simply cannot be replicated online,’ fragrance journalist Carla Seipp tells LS:N Global. She adds that today’s luxury fragrance experiences are designed for consumers seeking to ‘slow down and savour the moment’. Alongside this desire for a quiet environment to focus on the sensory experience, exclusivity remains paramount for luxury fragrance retailers. From in-store discovery tools powered by artificial intelligence to a new era of community commerce, we highlight three best-in-class innovations that truly smell like the future of retail.
