doing this for 16 years and I have never, ever seen anything like this,” Jensen said.The latest fragrance boom has not only puzzled industry veterans, it also comes at an unprecedented time. With mask mandates still the norm in many countries, no one could foresee fragrances recovering so rapidly while most product categories in beauty, such as makeup, continue to suffer.Akin to the lipstick effect, many analysts believe fragrances have become consumers’ new small luxury. Sales for the category began to rise during last year’s holiday season, including at Estée Lauder, which reported positive growth for premium fragrance suppliers Le Labo and Jo Malone.Naturally, as we enter the last quarter of the year, many beauty retailers are betting on fragrances, especially sets, to boost demand for the gifting season; however, this may not be the case. Jensen explains growth for the category reached its peak in March and is now showing signs of a downward trend, although she notes that demand remains in the healthy double digits. Why are people buying fragrances so much? In a survey, NPD asked consumers why they had purchased a fragrance in the last month; half of the responses stated it was a “treat for themselves”, while another 20 per cent answered “a gift for someone else”.Jensen is convinced the pandemic was also a trigger for the spike in sales. She explains: “There’s a science behind your sense of smell and how it’s directly related to memory: you smell something and it brings you back to a moment in time. And if you think about what we all went through, it could be, to a degree, consumers wanting to escape.”Layered upon this nostalgia factor is fragrance’s status as a feelgood product that can encourage the release of endorphins and provoke emotions, physically affecting the way we feel.Surprisingly, new launches accounted for only a small percentage of the sales. NPD’s analysis showed “the bulk of the volume and the growth is coming from what exists”. Launching a new product during the pandemic did present a challenge for brands, due to the lack of foot traffic in department stores and the difficulties navigating contactless testers.As sales shifted online, brands had to ramp up marketing efforts to push purchases. They recruited influencers and used visual and audio cues to help communicate the scents and tasting notes. This meant more in-depth storytelling to replace testing.An alternative route that many brands also took was reformulating existing scents and refreshing marketing campaigns. Examples from this year include Christian Dior’s Miss Dior and Yves Saint Laurent’s Libre. Smells like home Over the last two years, consumers have spent more on larger bottles – 4.2 ounces (124 ml) and above. Also, NPD highlighted artisanal brands and perfume-makers as a bright opportunity, as demand shifted to niche scents.As China was one of the first countries to bounce back from the pandemic, its growing fragrance market became an important testing ground for new product launches and brand expansions. Ultra luxury perfume brands Kilian and Editions de Parfums Frédéric Malle began establishing their physical presence in China through pop-ups and new boutiques last year.Since the pandemic began, people have been spending more time at home and the market for home and living products has exploded exponentially. A subset of the fragrance category includes candles and other scented products, like diffusers, incense sticks and more. NPD reported home scent sales grew 13 per cent from January to September of last year, and sales of home scent gift sets, such as a candle paired with a lotion, grew 22 per cent.“Home scent has been a strong performer all year,” Jensen said. “All of that’s really tied to the fact that we are more homebound than ever.”Among the winners of the home fragrance market was Bath & Body Works, owned by L Brands. In an investor conference for the company, Andrew Meslow, CEO of L Brands, said its customers are engaging more with the brand, a trend that “has really been accentuated or accelerated” during the pandemic. Bath & Body Works is the best-performing brand for the company, growing at a compound annual rate of 14.2 per cent. Emerging hand sanitiser market Meslow also said sales for soaps and hand sanitisers made a massive jump. The company reported two-thirds of its dollar growth came from the home fragrance and body care categories, while a third of the growth could be attributed to soaps and sanitisers.The world has increasingly adopted sanitisers as an alternative to soap during the pandemic. The global market is expected to grow to US$67.4 million by 2028. As a result, a crop of new hand sanitiser companies has appeared, branded with their own unique scents and selling points. Sanitiser offerings have expanded massively since 2019.Singaporean start-up Maison 21G pivoted from bespoke fragrances to premium hand sanitisers mid-last year, as a response to the pandemic. Founder Johanna Monange opted to use her surplus of alcohol, initially intended for upcoming perfume stocks, to develop a new range of hand sanitisers instead.Monange also shared that the sanitisers helped reduce the pandemic’s effect on her business, “I have 14 employees and I haven’t laid off anyone,” she said.South Korean cosmetic brand Tamburins sold 8,000 bottles of hand sanitiser in a day after getting a shout out by K-pop star Tiffany Young. In a “What’s in my bag” video for Vogue Korea, Young revealed the niche sanitiser was one of her daily items and that she had gifted bottles of the sanitiser to her friends and family, including her ex-bandmates in popular girl group Girls’ Generation.The video has since had 4 million views and made Tamburins a viral hit. Just weeks after the initial video, Vogue Korea followed up with a second one, featuring the singer’s visit to the Tamburins store in Seoul. Will fragrances continue to lead the way? While production of soaps and hand sanitisers has cooled down as the pandemic has improved, last holiday season, this category was the bestselling personal care product, overtaking body wash and hand lotion. And experts say fragrances will probably remain dominant.  As the world opens again and outside activities resume, consumers will have more occasions to wear perfume. Gift sets are expected to perform well this holiday, as bundles and value buys will seem attractive to price-conscious consumers. Home fragrances and candles are also expected to be a popular gift option this year, although sales may start to taper as the workforce returns to the office.Also, with physical stores just reopening in many places, NPD reported a large percentage of sales have already returned to bricks-and-mortar in locations where Covid-19 has had less of an impact – and remained there.