Jun 19, 2009

Perfumers Breathe in Sales Data, and StrategizeBy Chandler BurrNYTimes.com

Long after most other consumer goods companies were getting detailed reports on how their products were selling, giant perfume makers like Estée Lauder, l’Oréal and Coty operated mostly by intuition.

While they might know that orders from a retailer were down, they could not track what was selling and what was not. They did not know who was buying what perfume.

That changed in 1996, when Karyn Schoenbart, an executive of the NPD Group, a market research firm, visited the chief executive of an international scent brand and offered to sell him retail data on his perfumes — and on all his competitors’ as well. And they would buy data on his perfumes.

“This,” Ms. Schoenbart said, “is when he said, ‘You’re going to sell us what? How can you do that?’ And then, ‘Is this legal?’ “

It was. And in providing detailed retail data for the first time, NPD revolutionized the management of the huge scent industry. But this may have come at the cost, some argue, of the artistry of perfumery.

NPD data provides “a thorough understanding of the marketplace before critical decisions are made,” said Dennis Keogh, Coty Prestige’s senior vice president of marketing in the United States, who manages Jennifer Lopez, Kenneth Cole, Calvin Klein and Vera Wang. “For years, the industry had no reliable information to go on.” NPD, he said, “has totally changed the way we analyze the category and conduct business.”

Mr. Keogh credited NPD’s insights with the successful reintroduction of Davidoff’s Cool Water, a Coty cornerstone whose success had been eroding after 15 years on the counter. “The result was all-new advertising, stronger promotional packaging,” he said, “making Cool Water less ‘gift with purchase’ driven.”

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