Digital Scent: A $1.2B Market Primed for Innovation

To woo today’s consumers, 63% of whom crave multisensory experiences, companies are lining up to develop new technology that tickles the senses.

Their next frontier? Our noses.

The digital scent market is valued at $1.2B in 2023, and poised to double by the end of the decade.

Source: Markets and Markets

Early innovators include Google spinoff Osmo, which aims to give computers a sense of smell, and Moodify, a developer of scent experience technology.

Why It Matters

Smell is processed by the emotional part of our brains, unlike sight and sound, which are processed by the logical part, the cortex.

That means any brand that successfully captures consumers’ noseshare will have a direct line to their hearts and minds.

Let’s look at some opportunities. 

Business Opportunities in Digital Scent Technology

1. AI-Enhanced Scent Delivery Device

As a lover of Mukbang videos – where streamers gobble up food on camera – I’d pay good money for a device that diffuses scent based on content on a screen.

Imagine watching The Bear… while smelling all that good stuff.

Yesss chef. Source: Reddit

With the help of AI, the device could learn and store a wealth of olfactory information from popular foods, and then use visual recognition to identify which scent molecules to dispense.

This could go beyond food, of course:

• Social shopping: Nearly half of social media users have impulsively bought something while scrolling – and that’s just through sight and sound. If you add scent into social or in-stream ads, it’ll be over for us all.
• Extended reality (XR): Scent will be a major piece of the $62.9B XR market. Devices like this one from OVR are already digitizing scent to enhance VR experiences.

2. Electronic Noses for Health

Alternatively, you could focus on scent detection and tap into the $27.4m electronic nose (e-nose) market.

E-nose is a sensing device that receives and processes odors, with wide-ranging applications like:

🥬 Food preservation

🚫 Toxic substance/gas detection

🩺 Disease prevention and diagnostic

Among them, the health and wellness use cases have already gained steam:

• Koniku raised $38.6m to build “smell cyborgs” that detect diseases
• Last month, Noze received $1.3m to develop a tuberculosis breathalyzer using an aroma chip

You can make portable and affordable e-nose devices for consumer use, such as early detection of gynecological diseases, urinary infections, or even STDs – probably safer than uploading photos of your privates to an app.

Or,  build a user-friendly software that visualizes e-nose data in a clear and actionable way. Use AI to provide personalized health insights and recommendations based on those readings.

3. Partner with Brick-and-Mortar Businesses

Scent marketing is a hot new trend in retail, for good reason — 74% of customers are drawn into a store because of the smell.

You can work with physical businesses on using scent to enhance their customer experience. A few ideas:

👩‍🔬 Scent consulting: Own the data piece of scent marketing, and help business owners implement a strategy that fits their specific audience. Research scenting tech solutions to help them stay within budget, and analyze business impact/ROI after implementation.

🧰 Service the machines: Scent machine is a $18.6B global market. At large commercial spaces, they need to be installed and maintained professionally. If you own an HVAC business, consider adding HVAC scent diffuser installation and maintenance into your services.

💺Go niche: Develop your own devices or scenting systems, and sell them to niche commercial clients. Think airplanes, cruises, movie theaters, therapy offices, or even dental clinics (to give those dreaded visits a whiff of positivity).

Other Possibilities

Osmo raised $60m to teach computers to “read, map, and write” scent data, like they do with vision and sound. 

It's an ambitious goal, but when that happens (probably sooner than we think), a host of futuristic business ideas will also emerge — like digital gifts that contain scent memories, or a Spotify for custom smells from your favorite celebrity.

I can even imagine a scent-based dating app that lets users smell a potential partner before meeting them.

Sounds wacky? Hear me out.

Smelling is important in social communication and connection. We spend the majority of our lives online now, so there's a gap to be filled for that emotional connection. And we already know the role pheromones play in love. So whether you like people that smell like the great outdoors, or a sweaty gym, you might just get love at first sniff in the near future.