The final link on the perfume-value chain is the retail business. These companies are responsible for delivering perfumes to customers in perfect conditions, strong branding and, above all, independent (or not so) consulting.
In Portugal there are three main types of perfume retailing: large companies, traditional/street shops and re-sellers. There are several differences between them: communication, customer bonding, staff and, obviously, revenue stream.
The four major perfume-based companies operating in Portugal are the multinational Sephora, Douglas and Marionnaud being Perfumes & Companhia the unique 100% Portuguese brand that actually reached the best market share, having about 70 to 80% of the market, in 2009. These companies have a huge staff (average 800 employees), many stores (average 130 stores in the whole country) but sometimes they lack a strong one-a-one relation with the customer (it is almost a see-pick dynamics); they are placed mainly in huge malls held by large companies like Sonae Sierra or Dolce Vita.
They have a strong communications department: at the online level each one has a nice webpage (Perfumes & Companhia has also an online store), highly popular Facebook pages (Sephora’s Facebook page has more than a million likes) and a dynamic Instagram profile but they also do a more “personal” communication effort, sending text messages almost in a daily basis (informing campaigns, discounts and new offers). They do not, however, engage TV commercials but have a strong presence in media papers and, recently, these giants “acquired” strong public figures as their PR.
In terms of supply, the four giants offer all kinds of perfumery: luxury brands, mid quality perfumes and cheap fragrances. Do not forget that these stores sell cosmetics, body care and make-up as well as perfumes.
One of the most powerful images of perfume market in the past centuries are the traditional/street stores. These stores are, in many cases, small companies, run by a family, with just one space where all kinds of perfumes and cosmetics are sold, as well as the giant companies. Some of these stores are actually drugstores that sell perfumes, body care products and drugs on almost the same shelf.
Without a strong communication department and almost none presence in the media, these stores apply a local communication strategy, engaging locals as their customers, fighting to locate their business in areas of households great economic power. The revenue stream is typically good but not to the point of considering scaling or expansion.
Perfume re-sellers are all those individuals committed to a given brand to sell its products with almost total autonomy and independence. Examples of those brands, in Portugal, include Avon, Oriflame and LR Health and Beauty;
Such multinational companies develop such a business network spread over several countries with a large “army” of re-sellers that, in true, represent the sales force of those companies. Autonomy and variable salary (reselling dynamics usually go with a fixed cost price for re-sellers and they can play any price for those perfumes) represent the attractiveness of this business.
As “solo players”, re-sellers don’t organize themselves as a coalition or a corporation so it is impossible to assure how much market share they represent and to determine the revenue stream of reselling business. In Portugal, though, it is a fairly recent phenomenon and, I my opinion, it does not reach maturity and, therefore, it does not represent a threat to the traditional retailing.