ACCELERATED ANALYTICS LUXURY FRAGRANCE VENDORS POISED TO GROW 5.9% BY 2026

Future Market Insights released a report today that estimates the global perfume market is estimated to reach $39.67 billion by the end of this year, and expects growth of this segment of 5.9% over the next ten years. The firm looked at several Accelerated Analytics beauty and fragrance companies for its report, including Estee Lauder Companies, LVMH, Coty Inc., L’Oreal International, Elizabeth Arden Inc., Shiseido Co. Ltd., Puig and Parlux/Perfumania Holdings Inc.

The reports found that demand is being bolstered by the millennial consumer segment, as well as increased online retail strategies from these companies. Female fragrances are leading the increase, with year-over-year increases from 4-5.2% over 2015 to 2026. While online retailing is the most attractive shopping means to this segment of consumers, in-store remains 80.5% of the market share, due to the personal and olfactory nature of fragrance marketing.

Millennials are drawn to products that have natural ingredients. Fragrance vendors are offering more “Eau Fraiche” (alcohol free) products.

The Western Europe market is the largest consumer, and expected growth consumer, of fragrance products, followed by North America.

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Source: Luxury Daily

H&M’s Expansion Plan Includes 425 New Stores

Swedish retailer H&M recently revealed its aggressive plans for both physical and digital growth in 2016. The company will open its 4000^th location when they add 425 stores this year. H&M also plans to expand its e-commerce efforts to Japan and 10 other markets.

“Our strong expansion continues, we are gaining market share and we are confident that we can grow at a fast pace both through stores and online, in existing as well as in new markets, for many years to come,” said H&M CEO Karl-Johan Persson. “The spring will bring many store openings, for example the opening of flagship stores in South Africa, Switzerland, Hungary and India. Since 2010 we have doubled the number of stores in the group, and this April we will pass another milestone when store number 4,000 opens.”

H&M has chosen Mall of India in New Delhi as the location of it’s 4000^th store.

The addition of 11 new e-commerce markets will give H&M omnichannel capabilities in 34 markets by the end of the year. Their new markets include Japan, Ireland, Croatia, Slovenia, Estonia, Latvia, Lithuania, Luxembourg, Greece, Canada and South Korea.

Source: Chain Store Age

Supplier Survey Reveals Positive Outlook for Retail Sales

In a new survey conducted by Capital Business Credit, 75% of major retailers of soft goods such as clothing and accessories expect retail sales to grow by 4% or more for the spring and summer shopping season. If they do, they will outpace core GDP growth and provide a jolt to the economy.

According to the Global Retail Manufacturers and Importers Survey, a majority of those surveyed believe that 2016 will either be better (45.5%) or the same (38.6%) as 2015.

“While retail sales for January and February were lower than initially anticipated, this hasn't seemed to deter retail suppliers' confidence or business activity," said Andrew Tananbaum, executive chairman, CBC. "In fact, nearly 90% of importers and suppliers are reporting reorders for the spring/summer shopping season.”

The reorders mean that the major retail chains and individual stores are optimistic. Retailers have become increasingly reticent to stock shelves if they don’t think products will sell according to Tananbaum.

The survey results found that over 3/4 of retailers have increased their orders or stayed the same; approximately half indicated that they have increased their orders. And of those who increased their orders, 1/3 ordered 7% to 10% more, while almost 30% said that orders increased by more than 10%.

Impact of the Chinese Yuan

With so many U.S. retail goods produced in China, the devaluation of the yuan has been an important factor for importers and retailers to increase profitability while keeping prices low. Half of survey respondents are considering increasing their Chinese production due to the strong dollar vs. the yuan.

Just over a third (37%) believe that margins may increase due to the lower cost to produce goods in China, but the majority (56.7%) do not think this will translate into lower consumer prices.

"While the overall recovery from the great recession of 2008 has been sluggish, the low costs of goods produced in China has allowed the U.S. consumer to stretch their spending dollars and allowed retailers to keep costs down," Tananbaum concluded. "In our opinion, this is the first time since the recession that manufacturers, importers and other participants in the retail goods supply chain will have the opportunity to recover some of the margins they lost over the past decade.

Source: Retailing Today

CPG Growth Opportunities in 2016

In its report series “Taking Stock of CPG Past and Future: Gear Up Now for a Year of Growth", IRI reflects on the lessons learned in 2015 and provides insight into several key trends that will drive growth in 2016.

Growth is still a significant challenge for the CPG Industry. Faced with conservative shopper behaviors and a challenging economy, the industry is struggling to generate solid volume growth. And the trend is similar across retail channels.

According to the IRI report, several new and existing trends will shape the CPG industry in 2016, but three trends “hold particular promise for growth.”

• Circle the Wagons: The internet will account for approximately 50% of industry growth in the next several years and the CPG industry can’t afford to wait if they want to capture their fair share of this opportunity. While online CPG sales are still small – only about 2% of the total – the average annual growth of online CPG spending has topped 15 percent since 2010. Additionally, according to IRI, e-commerce plays a significant role in defining how consumers approach shopping. Over three-quarters of all shopping trips now begin online as consumers conduct research and plan their shopping trips. To solidify their understanding of the online path to purchase, CPG marketers must invest in digital marketing programs and “elevate their digital expertise”. CPG marketers who don’t will suffer.
• Melting Pot Gets Hotter: With more than 54 million Hispanic consumers in the US and population growth at three times the national average, the Hispanic population has been a key target for marketers for the past several years. According to the IRI report, the key to successful growth in this market will be an investment to understand Hispanic shoppers “across a deep and wide spectrum of attitudes and behaviors.” As the Hispanic population grows, marketing to the segment as a homogeneous group is ineffective. Marketers need to see the diversity within the Hispanic market and demonstrate a detailed level of understanding within it.
• Do More With Less (Media): Forty years ago consumers viewed an average of 500 ads in a given day. Today, consumers view an average of 5000 ads a day! The result is information overload for consumers and a lot of wasted effort and dollars for marketers. CPG marketers have an opportunity to move away from the “more is better” approach to media and focus on impact over exposure, or in other words, maximum media efficiency. Though difficult, getting there isn’t impossible with the right data, analytics and insights. Marketers need to effectively communicate with high-value shoppers and employ impactful micro-targeting methods.

For the full IRI report click here. To receive Accelerated Analytics’ own monthly Retail Industry Briefing Book (RIBB) full of key retail industry data compiled by our team, click here to request a copy.