Scent Retail Futures

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.

The Fragrance Shop’s AI Fragrance Machine

In November 2023, The Fragrance Shop unveiled the UK’s first AI-powered fragrance machine at its London flagship store, offering customers the chance to craft personalised scents on-site. This innovation asks a series of detailed questions such as ‘Are you a realist or a dreamer?’, ‘Is your style more business, hipster or sporty?’ or ‘How do you spend your spare time?’ to generate a unique scent profile tailored to each individual.

Carla Seipp notes that the #perfumetok community (485,400 posts on TikTok at the time of writing), filled with ‘a whole army of self-taught fragrance experts’, has become so knowledgeable about scent notes that traditional selling methods are less effective. Whether the process is AI-driven or hand-made, she explains, ‘a super-immersed fragrance consumer is going to appreciate any and every chance to learn about and explore scent in a new way’.

Lush’s Perfume Library

Lush opened an immersive Perfume Library store in London in July 2024. The innovative shop allows customers to explore exclusive fragrances through personalised consultations with expert staff, inspiring books and a diverse range of scents. 

The store not only invites people to discover a unique range of 12 newly launched perfumes – available nowhere else – but also celebrates Lush’s long-standing tradition of in-house perfumery. 

Alina Gliwinska, one of Lush’s three in-house perfumers, said that she hoped that ‘customers will go on a journey to find their unique perfume, one that matches their personality, evokes memories, and ultimately becomes their signature scent’.

Diptyque's Maison Diptyque

Opened in May 2024, Maison Diptyque in London has re-imagined the fragrance retail experience by merging culture, community and personalised shopping into one cohesive space. With features like a fragrance library, interactive workshops and an on-site dining area, the store goes beyond traditional retail to create a holistic experience. 

Laurence Semichon, senior vice-president of Diptyque, said customers are not just buying a candle; they are ‘buying a piece of French and Parisian lifestyle’ – hence, the store showcasing a wide range of products and collaborations and the full breadth of the brand’s portfolio. 

‘On one hand, fragrance is deeply personal, tied to individual experiences and psychology. On the other hand, retail spaces are undeniably places of connection and community,’ says Seipp. Maison Diptyque captures this balance perfectly, offering a space that encourages both personal discovery and communal engagement, providing a fluid and organic exploration of scent, which Seipp notes is key to captivating today’s fragrance consumers.

Looking ahead, luxury fragrance retail must re-invent itself to adapt to a growing trend of brand agnosticism among Gen Z and Gen Alpha. Carla Seipp says the young cohort are becoming ‘huge fragrance connoisseurs’, with even young teenage boys buying high-end brands like Creed or Parfums de Marly. Instead of sticking to a single signature scent, these consumers are curating diverse fragrance wardrobes, selecting scents that suit different moods and occasions. Seipp says this shift is reflected in the rise of ‘one-spray wonders’, where the need to ‘catch them all’, much like collecting Pokémon, has led to a decline in brand loyalty.

Fragrance is also evolving from a status symbol into a deeply personal experience. The fragrance journalist poses the question: ‘How much do we wear fragrances for ourselves versus others?’ In-store experiences play a crucial role in this exploration, offering a space where consumers can immerse themselves in scent in a personal way. Maison Margiela’s Replica fragrance collection, for example, ties personal memories to in-store experiences, much like how Andy Warhol used scent to mark different periods of his life (Jessica Murphy, Vogue). Retailers are embracing this trend by offering personalised and intentional fragrance selections that cater for the desire for variety and customisation in daily routines, which Seipp describes as an ‘antidote to the fast fashion style of fragrance-buying’.

The value of in-store fragrance workshops lies in their ability to offer a creative and hands-on experience, recognising that while the journey often begins online, the final step is often in-store. According to Seipp: ‘Scent has an exceptional power in bringing people together,’ even amid the ‘snobby brigade’ who focus on identifying every note. 

Luxury fragrance retailers that retain consumer loyalty will be those prioritising customer service, variety and creativity. Guillaume Motte, CEO of Sephora, captures this sentiment, saying: ‘We aim to pamper our customers by giving them extraordinary experiences. Boring retail is dead; exciting retail is alive and kicking.’