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Fragrance consumers are increasingly driven by emotional connections. The Covid-19 pandemic has highlighted the link between our olfactory senses and overall wellbeing, prompting fragrance brands to emphasize the importance of feeling good alongside smelling good. New perfume launches, including those from Charlotte Tilbury and Bella Hadid’s Orebella, are now promoting emotional advantages. What Makes Estee Lauder Beautiful Products Unique?

Estée Lauder, which owns notable fragrance lines such as Le Labo and Editions de Parfums Frédéric Malle, aims to lead in the emerging sector of functional fragrances. The company is conducting proprietary research to explore the relationship between scent, memory, and emotion.

Recently, the beauty giant announced a collaboration with the Dresden University of Technology to delve deeper into the interplay between scent and emotional memory. This research initiative is spearheaded by Dr. Thomas Hummel, who has dedicated three decades to studying olfactory perception at the university’s Smell & Taste Clinic and department of otorhinolaryngology.

Dr. Hummel noted, When individuals lose their sense of smell, they also forfeit associated memories. The primary objective of this research is to gain insights into odor-related memories. Given the complexity of perfumes, the collaboration aims to utilize these intricate scents, as many individuals have vivid memories tied to specific fragrances, making them effective tools for memory evocation.

Research from Estee Lauder Beautiful Products indicates that 75% of consumers adjust their fragrance choices based on their moods and emotions. The emotional benefits derived from fragrances are among the key motivations for consumers when making purchases. 

This trend extends beyond mere occasional use, as highlighted by Sumit Bhasin, senior vice president of corporate fragrance research and development, product development, and innovation at Estee Lauder Beautiful Products Unique.

TUD initiated its research in April, focusing on the impact of perfumes from Estée Lauder’s collection on the brain regions associated with memory and emotion. Dr. Hummel indicated that the study aims to identify the specific brain areas involved in odor memory mapping, such as the thalamus.

Which regulates sensory and motor functions, and the cerebellum, responsible for balance and coordination, by monitoring blood flow to different brain regions. The project will involve up to 80 participants, with TUD anticipating the publication of results within the next six months.

This research endeavor coincides with a pivotal moment for Estée Lauder, as the company prepares to appoint a new CEO following Fabrizio Freda's departure after 16 years of leadership. The latest quarterly earnings report highlighted a slowdown in the beauty sector, noting a 2% decrease in net sales for the second quarter of 2024.

However, the fragrance segment showed resilience, with a reported 2% increase in fragrance sales for the entire fiscal year, particularly driven by significant growth in the Le Labo brand. Bhasin emphasized that fragrance serves as a crucial growth engine for the company, stating, We wanted innovation to be the driver for growth.

Bhasin also noted that the demand for perfumes offering emotional benefits is particularly pronounced among Asian consumers, a market that continues to expand for niche and luxury fragrances. Estée Lauder’s second-quarter 2024 report indicated double-digit growth in perfume sales in Japan, where consumers have historically been reluctant to wear strong fragrances.

However, younger generations appear to be more receptive to perfumes: a study by Fuji Keizai Group projected that Japan’s domestic perfume market will reach ¥54.7 billion ($376 million) in 2024, marking a 30% increase since 2020. Additionally, the rising number of male fragrance consumers may show a keen interest in scents that provide tangible benefits, such as emotional enhancement.

When observing male consumers engaging with fragrances in the East, it is evident that they tend to focus more on the benefits, according to Bhasin. Dr. Hummel noted that TUD has previously collaborated with major corporations such as Procter & Gamble and fragrance producers Takasago and Firmenich. However, the partnership with Estée Lauder marks TUD's inaugural collaboration with a high-end cosmetics brand. While the university intends to share its research findings with the public, Bhasin mentioned that Estée Lauder has not yet decided whether to seek patents based on the research outcomes.

There are certain findings that we might choose to keep proprietary. We may discover insights that warrant patenting, while others could be retained as trade secrets, he explained. Nevertheless, the goal of collaborating with esteemed academics like Professor Hummel is to publish some original research findings.

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