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Gen Z is helping drive luxury perfume sales: Coty CEO

Gen Z smells good these days. According to the head of one of the world’s biggest cosmetics firms, it’s so good that they’re helping to keep perfume sales high, even in the face of economic uncertainty.

The CEO of Coty – the French-American beauty conglomerate whose fragrance brands include Marc Jacobs, Gucci, Calvin Klein and Davidoff – said on Sunday that despite challenging economic conditions, consumers are splurging on “small luxuries” like high-end colognes Was doing.

Earlier this month, the company reported strong third-quarter earnings with 9% net revenue growth compared to a year ago. The firm said at the time that accelerated demand for premium fragrances had helped drive the growth.

“This category is booming in the US,” said Sue Nabi, Chief Executive CEO. yahoo finance live, “That’s up 60% from pre-pandemic levels.”

He said this phenomenon was also being seen in Europe and China, which – like the US – have experienced economic uncertainty over the past year.

The prophet said, “People love these little luxuries.” “At the end of the day, even in an environment where people are constrained… a little luxury like this is something that people are not ready to give up. I believe this category, and, moreover, the beauty category, is clearly one of the most flexible.

Nabi said certain categories of consumers, including Gen Z, men and the Hispanic community, are “rediscovering” luxury fragrances and driving sales.

He said these consumers viewed perfumes and colognes as a form of “escapism” as well as “mood boosters” and self-expression — and noted that they were spraying their favorite scents more and more often.

,[They’re] Spraying more, especially Gen Z, who don’t use fragrance [only] On their skin, they use fragrance on their clothes and clothes,” she explained. Yahoo, “So they spray too much, and that’s shortening the lifespan of the product. So that explains this boom in both volume and value behind this market.

Nabi said fragrances that have benefited from young consumers’ love of smelling good include Burberry’s Hero, Gucci Flora Gorgeous Jasmine, Chloé Atelier des Fleurs and Boss Bottled.

lipstick effect

Thanks to the so-called “lipstick effect,” consumers often double down on purchases of small luxuries like beauty items during economic downturns, preferring instead to cut back on spending on big-ticket items like cars and furniture to reduce costs. We do.

Back in 2019, L’Oréal’s then-CEO, Jean-Paul Agon, told CNBC that he wasn’t worried about a recession due to the lipstick effect.

Meanwhile, after the 2008 financial crisis, beauty products became “recession-proof” as consumers saw the category as having a “happiness factor,” according to experts.

Last year, as Britain grappled with its deepest cost-of-living crisis in decades, British consumers turned to premium beauty brands to maintain a little luxury in their lives while cutting other costs.

Ian Baer, ​​a former advertising executive and founder of strategic behavior consultancy Soothe, told Luck Part of the power of the lipstick effect on Tuesday came from consumers who wanted control as their spending power waned.

“When it seems like there is so much in this world that we cannot anticipate, people have a tendency to seek control over specific aspects of their lives – and personal presence is always high on that list,” he said. . “I may have no say in the future of my job or the next global health crisis, but if I can control how I look or feel in a given moment, with that comes a kind of emotional healing. . When everything around us seems chaotic and unpredictable, there is tremendous power in taking control of small, predictable outcomes as a way of getting through difficult times.

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