Olfactif enters niche perfumes into the subscription-service fray
Online shoppers, so accustomed to real-time urgency, are showing an appetite for an age-old retail hallmark — subscription services that deliver a surprise in the mail.
But there’s a high-tech twist: Retailers are using customers’ online feedback and their own research to tailor the surprises to fit customers’ interests. The companies’ success often relies on smart content and lean behind-the-scenes operations.
“The trick is that the new ideas and products must keep coming,” says Simon Cook, managing partner of DFJ Esprit, a London-based venture capital firm that invests in e-commerce subscription companies.
The popular deliveries have proven surprising, too, ranging from healthy snacks to dog-pampering products.
Tara Swords, a 36-year-old Near North Side entrepreneur, aims to take advantage of the trend by helping others feel the emotions, wonders and surprises of niche perfumes.
Her e-commerce company, Olfactif, named for a French word denoting one’s sense of smell, sends samples of three specially selected perfumes each month to subscribers. The perfumes constitute a theme, such as “Vignettes of Spring” in April, but the choices are kept secret until delivery.
Subscribers can get $18 off — that’s the monthly fee — if they buy a full-size bottle of one of the perfumes. Olfactif has attracted “a few hundred” subscribers in the two months since it launched, and Swords expects the total to reach 1,000 this summer as more people discover the service.
Such subscription-based companies are among the fastest growing in the e-commerce industry, which topped a record $1 trillion in sales worldwide in 2012. No data is available on how quickly subscription-based businesses will grow, but research firms forecast e-commerce sales in the U.S. will grow by double-digit percentages from 2012 totals ranging from $186.2 billion to $225.5 billion.
Swords isn’t afraid to challenge her customers. One of the April selections had “notes” of “clay tennis courts and fresh tennis balls,” for example.
“I get a little thrill when I see customers really do like this and are willing to be engaged with a perfume as art and from an intellectual standpoint, as opposed to seeing it simply as a beauty product,” Swords says.
She has also deftly handled the ability to change course based on customer preference.
Starting in May, subscribers may choose discounted rates for signing up for longer than the typical month-to-month terms.
And on June 1, subscribers will receive their samples in larger spray bottles rather than in daubers, in which people use the stopper to apply the perfume.
Swords says she invested years into researching niche perfumes, participating in the fragrance blogosphere and selecting perfumers, as well as settling on back-end billing, shipping, order fulfillment and payment gateway suppliers.
Perfumer Ineke Ruhland of San Francisco, whose lilac fragrance, “After My Own Heart,” will be inside one of Olfactif’s monthly offerings, said, “[Olfactif] is interesting because it puts the actual scent in front of the consumer, and sampling is so important in the fragrance industry.”
Ruhland, whose fragrances are sold in certain Anthropologie stores and high-end department stores, said the “niche” trend is evident in the popularity of craft beers, artisan cheese and “indie” brands.
Indeed, Swords can recall the most minute details of her mother’s perfume, more than 30 years after she first smelled it as a child.
“I remember my mother having a bottle of Mystere — an enormous woody, Oriental perfume with a lot of animalic notes like musk and civet,” she said. “It’s not sweet or charming, but I was in love with it. I remember trying to put it on.”
Swords spent her early career as a tech writer in Silicon Valley, covering startup technology companies much like her own, including the widely publicized flameouts of 13 years ago.
Yet her passion overcame her caution.
“You can’t let a good idea slip by because you’ve seen others have a hard time in the past,” she said.
Photo and video by Scott Compton