The “lipstick effect” refers to the increased demand for affordable luxuries during difficult economic times. One recent example of this can be seen in the fragrance category, which has benefited from the lipstick effect and the rise of fragrance-focused content on social media. According to NPD data, in 2022, TikTok was responsible for 45 per cent of all social media-driven fragrance purchases in the US, with niche fragrances like Baccarat Rouge 540 by Maison Francis Kurkdjian and Missing Person by Phlur doing particularly well on the platform. Vicken Arslanian, the founder and president of Europerfumes, CEO of Twisted Lily, and owner of Commodity Fragrances has witnessed the growing interest in niche fragrances first-hand. He shared his journey within the industry and upcoming retail initiatives with Inside Retail in an exclusive interview. Leading the way in niche fragrance retailingEuroperfumes focuses primarily on the distribution of artisanal perfumes, including best-selling brands like Juliette has a Gun, Amouage and Montale, to American retailers. Initially, the company focused on smaller businesses such as specialty fragrance boutiques and hotel shops; however, as the niche fragrance category has grown, Europerfumes has also started selling to department stores and larger retail outlets. Just before the pandemic, the owner of Twisted Lily, one of Europerfumes’ clients at the time, decided to retire and Arslanian took the reins of the business in March 2020.Due to extenuating circumstances, Arslanian decided to close Twisted Lily’s brick-and-mortar location in Brooklyn, New York, and prioritize the brand’s online presence through curated fragrance sampling offerings, partnerships with fragrance influencers, and specialized fragrance-matching services. Consumers can now shop for scents by fragrance families, such as “green”, “fresh” or “floral”, as well as the type of “mood” they want their perfume to elicit, such as “sophisticated” or “sensual”. “Following the closure of the Atlantic Avenue location due to the pandemic, Twisted Lily fully transitioned to e-commerce, curating a portfolio of over one thousand products and integrating advanced AI discovery tools,” Olya Bar, Twisted Lily’s head of digital strategy and communications, told Inside Retail. “This shift led to a consistent average annual growth of 17 per cent since the acquisition, with a tenfold increase in monthly traffic. In 2023, a digital-first strategy in enhancing the online fragrance discovery experience resulted in a robust base of returning customers, accounting for 60 percent of Twisted Lily’s revenue and doubling the industry average conversion rates.”Family business turned fragrance empireIn a sense, Arslanian’s story is of a family business becoming a fragrance empire, in a very roundabout way. Arslanian was first introduced to the industry via his father, an Armenian biochemist who became fascinated with the world of luxury goods and began importing high-end European cosmetic and fragrance brands into Kuwait in the 1960s. While he grew up around the family business and learned some of the ins and outs of luxury fragrance sales, Arslanian didn’t intend to go into the fragrance industry in his younger years.In fact, he graduated from college with an architectural degree. However, he soon realized the field would not work out for him in the long run. Still, he largely credits his experience in the field for his creative approach to problem-solving within the business world. Arslanian decided to launch his own brand, an endeavor that definitely didn’t go as planned. “I had no idea what I was doing and I lost about a million dollars doing it, learning about the retail landscape. Because selling perfume and creating a perfume for sale are two different things,” he explained.The businessman elaborated, “Like they say, you can be a great baker, but to own a bakery is something different. So I learned very quickly about marketing and selling perfume and how to really survive in this retail landscape…I didn’t go into the family business with my family. I went into the family business as a separate entity and as a standalone kind of venture.”Relaunching and “refounding” Commodity FragrancesIn 2019, Arslanian acquired Commodity Fragrances, a once-cult favorite brand launched via Kickstarter and known for its unique scents like moss, books and milk that had fallen on hard times. Arslanian restructured and rebranded the business before officially relaunching in 2021. It returned to Sephora in 2022, and scents like Commodity Milk have once again become regular favorites on #fragrancetok.In the midst of this, in 2020, he took over and reinvigorated Twisted Lily.Between the three brands, Arslanian is now one of the leading niche fragrance distributors in the US market. The future of niche fragrance retailIn addition to his online ventures and wholesale partnerships, Arslanian plans to invest in brick-and-mortar.The entrepreneur revealed that Commodity Fragrances will open a store on Crosby Street in SoHo, New York City, sometime this summer, and Twisted Lily store will open a new store in New York City by early 2025. He is confident that niche fragrances aren’t just a passing fad.  “Once you experience and open up your olfactive range to something different than what we’ve smelled in the past, it’s really hard to go back,” he said. “I don’t think this is a fad, this is a shift. In our journey and the fragrance world’s journey, it’s a shift and is here to stay and will keep evolving. It will not go back to the stereotypes that America is a floral [scent] country, the Middle East is an oud [scent] country and Europe is a fresh [scent] country. It’s never going go back to that, those stereotypes have been broken,” Arslanian concluded. Further reading: The rise of Black-owned fragrance brands in the beauty industry