The trend: Beauty brands are expanding their fragrance offerings to serve younger consumers who are flocking to premium and mass-market scents even as they cut back on other purchases.

• Coty said this week it will restructure and unify management of high-end perfumes and more affordable fragrances. It announced a strategic review of brands like CoverGirl, Sally Hansen, and Max Factor that could lead to sales, partnerships, or spinoffs.
• L’Oreal is expanding its lineup of high-end and niche scents, having acquired a minority stake in the Omani perfume house Amouage and invested in Korean fragrance house Borntostandout this year.
• Fragrance launches are running at a fever pitch as niche labels and upstarts vie with new lines from legacy players. Last year alone, more than 3,000 fragrances debuted globally, per Fashion Magazine.

Fragrances decisively led other beauty categories in growth during the first half of 2025. Prestige fragrance sales rose 6%, and mass market fragrance sales were up 17%, per Circana data.

Smell of success: Gen Z’s eagerness to experiment with multiple scents and rising spending among teen boys and men will propel fragrance sales in coming years. Gen Z consumers spend $204.15 a year on cologne and perfume—$38 more than the average consumer, per April data from NielsenIQ.

Beyond perfume: The fragrance market is also expanding into new product categories and looking to drive eco-friendly innovation. Beauty executives echo these trends, with 42% citing newness and innovation and 36% highlighting expansion into wellness and personal care as themes that will shape the industry over the next few years.

• Bath & Body Works launched dryer sheets in four fragrances, expanding its scented products beyond hand soaps, candles, and room fresheners, per Retail Dive.
• Unilever opened a fragrance lab in the US over the summer to bolster its in-house scent creation. That includes supporting more sustainable approaches such as developing fragrances from repurposed waste flowers.

Our take: Fragrance is becoming a true growth engine for beauty. Companies that win on this crowded battlefield will be those willing to innovate boldly for Gen Z consumers, who crave novelty and personalization.

Beauty retailers can respond to this opportunity by hosting in-store or virtual workshops on scent layering—or offering AI tools to help build their fragrance collections.