Fragrance continues to dominate the beauty sector in 2026, but it's increasingly showing up as a differentiator in other sectors like personal care and household essentials.This week on the Modern Retail Podcast, special projects editor Melissa Daniels speaks with Diana Melencio, general partner at XRC Brand Capital Fund, about the ways companies are using fragrance to set themselves apart.“On the shelves of Target and Walmart in the traditional laundry and household cleaning aisles, you're going to start seeing more premium products that have that differentiated scent architecture," Melencio said.Melencio, who is actively looking to invest in the space, has looked at the growth of fragrance and highlights how companies like genderless fragrance company DedCool and sanitizer brand Touchland are commanding elevated prices and prime retail spots in places like Sephora. At the same time, legacy companies like Unilever are ramping up their fragrance opportunities while trying to ensure that they're not alienating price-conscious consumers.XRC's research shows that fragrance grew 15% in mass and 5% in prestige in 2025, which outpaces every other beauty segment. Melencio and Daniels discuss the ins and outs of why fragrance has become so popular and how brands across categories are looking to capitalize on the trend.Their conversation gets into:
Why price-conscious consumers are willing to pay a premium for elevated fragrances
The challenges that conglomerates have in innovating around scent-based products compared to startups
What some of the trendiest scents are in 2026 and how perfumers suss out what's the next big hit
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