Generation Z – anyone born between 1995 and 2015 – comprised 32% of the global population last year, nudging ahead of millennials to become the largest age group. With huge spending power, Gen Z consumers have been named the biggest cohort of beauty spenders with female Gen Zers now spending $368 annually on beauty, up 18% year on year according to a recent report by WGSN. They are likely to become the most pivotal generation for beauty retail, so it’s imperative that personal care industry professionals – from suppliers to marketers – understand their needs and start building strong relationships now.
Born at the dawn of the online era, this growing sector of the population are the first digitally native generation. They’re tech-savvy and they expect their time online to be immediate, seamless and frictionless. Growing up in the age of selfies and social media has also made them acutely aware of their online identity.
Perhaps because of this, Gen Z are shopping for health and beauty products earlier than any other generation that came before them. A survey by The Pull Agency found that 60% of Gen Z purchase beauty products before they are 14 years old, compared to just 39% of millennials and 23% of those over 55. Another study found that Gen Z are 10% more likely to have a facial care routine than millennials, with 3 in 4 stating they began using a facial moisturiser and cleanser before the age of 18. This longer period of influence gives them even more purchasing power.
And this demographic shift is also apparent in Asia. By 2025, Gen Z will constitute the same share of Asia’s population as millennials (25%), according to McKinsey. Whilst their study of 16,000 consumers across six APAC countries – Australia, China, Indonesia, Japan, South Korea, and Thailand – found similarities in the way generations think and shop, it also highlighted key differences. For example, a third of Gen Zers said they spend six or more hours a day on their phones, in comparison to just 22% of millennials.
Spending more time on social media than their counterparts, Gen Zers are also more likely to follow their favourite brands and use social media and video platforms when making purchasing decisions than any other age cohort in Asia. But to reach this rising generation, beauty brands need to truly understand the desires and defining features of a Gen Z consumer.
Gen Z are ‘Skintellectuals’
According to Piper Jaffray’s report from Autumn 2019, cosmetics sales for young consumers dropped by 20% compared to the same survey period in the previous year, the lowest it has been in just shy of a decade. But whilst cosmetic products have fallen out of favour, a widespread demand for skincare has emerged. And with it, so has the newfound term Skintellectuals: a consumer that is both educated and interested in the ingredients and science behind their skincare products. “Gen Z are very much ‘skintellectuals,’ and this has been reflected in the slowing of cosmetics sales and the increase of skincare sales,” says Clare Varga, Head of Beauty at WGSN.
Knowledge equates empowerment and Gen Z is arguably the most self-educated generation to date, with tutorials, information, and evidence at their fingertips 24/7. This informed generation of ‘skintellectuals’ are both seekers and distributors of knowledge via social media and other online platforms. Further to this, online sources which Gen Z trust to offer transparency – such as review site, Beautypedia, or Korean website, Hwahae, which has over five million users and over 100,000 analysed products in its database – help young shoppers research every aspect of a product before they buy it.
As consumers become more educated about ingredients, heritage brands are being forced to reevaluate their formulations to stay relevant and address the desires of younger consumers. Last year, just one heritage label – Clinique – ranked in Gen Z’s top 10 favourite skincare brands, according to Piper Jaffray. In response to this and to target the younger generation, a number of established brands have created their own sub-brands or diffusion lines. Clarins, for example, launched My Clarins in 2018 – a natural, vegan skincare collection aimed at teenagers and young adults. With the birth of skintellectuals, stalwart brands are being pushed to consider the ingredients in their formulations more than ever before.
This changed focus provides an opportunity for innovation which has led to fresh brands rushing to fill gaps in the new skin-centric market. Well-known names have entered the market, such as popular actress Millie Bobby Brown who launched her vegan skincare line for teenage girls, Florence by Mills, in August last year. Elsewhere, online giant Amazon took its first foray into skincare with the launch of affordable and mostly vegan skincare range, Belei, in October 2019. In total, hundreds of Gen Z-specific indie brands have made their debut recently, including Plenaire which “reinvents the classic coming-of-age skincare rituals” and aims to provide teenagers with a range of clean, sustainably designed products that meet their everyday skincare needs.
URL or IRL?
Generation Z have grown up with integrated mobile technology and spend an average of nine hours a day online. And so by definition, social media platforms – like globally dominant Instagram or leading Asian channels, Weibo and WeChat – are their main source of beauty inspiration, influence and education. These online platforms allow them to both consume and create trends, engage in online beauty communities and perhaps most importantly to brands, shop directly and instantly.
This youthful segment of the population is also eager to experiment with new technologies within the beauty and personal care space. Having grown up using Snapchat filters, this generation is no stranger to trying the likes of Artificial intelligence (AI) and Augmented Reality (AR).
In fact, one study found that 72% of Gen Z expressed a willingness to use AR or VR to try on or understand more about health and beauty products, in comparison to just 63% of millennials and 53% of baby boomers. As these technologies move further into the mainstream, we can expect it to evolve the way Gen Z interact with brands and ultimately, their purchasing decisions.
Given their inclination to go digital, it would be fair to assume that Gen Z would prefer to purchase products online and have them delivered direct to their door. However, for many young consumers, the desire to feel, touch and smell their products supersedes the convenience of e-commerce. Whilst 62% of teenagers say they research beauty products online before making a purchase, a massive 90% of American teenagers surveyed said they prefer to buy cosmetics in-store at popular drugstores or retailers such as Ulta and Sephora.
For this combination approach, experience is key. Malina Ngai, Group Chief Operating Officer at A.S. Watson Group, said: “Generation Z is shaping up to have great spending power and they are the future of modern retail… It’s important to stay relevant to them, not only focusing on the products they want, but also the stories and experiences that goes with them”.
Destination stores such as Boots UK’s new immersive beauty halls ensure this physical touchpoint is primarily experience-led for what is a typically digitally focused consumer. A plethora of brands have used pop-up retail and brand activations to tap into this, such as aforementioned sub-brand My Clarins which aimed to reach its target audience through a mobile tour around Universities campuses in Spring 2019. Similarly, YSL utilised this strategy to draw in younger consumers at last year’s Coachella festival, staging the ‘YSL Beauty Station’ mimicking a gas station.
This perhaps contradictory preference can be attributed to Gen Z’s polarization of ‘Gen Me’ (the competitive, follower-focused and style-driven consumer) and ‘Gen We’ (the collaborative, feelings-focused and belief-driven), of which they can be both. It’s likely also to have something to do with their double-sided desire for URL (online) and ‘IRL’ which commonly stands for ‘In Real Life’. With demands of a fast-paced and constant digital world, the young generation are also craving ways to go offline and experience reality. A brand that can make the distinction between both, whilst ensuring the connection is seamless and frictionless will find success in this growing market.
Much like their digital nature, sustainability and the impact we have on the environment is front and foremost to Gen Z’s experience, having grown up with climate change as the global topic that has dominated their lifetime. These eco-conscious consumers place an emphasis on buying ethical products, and strongly believe in a brand’s responsibility over its own environmental impact. Indeed, according to Nielsen’s global survey from 2018, 80% of Gen Z feel strongly that companies should help the environment. This is also reflected in the APAC region, with 82% of Southeast Asian Gen Zers claiming they prefer products from ethical brands.
Based on this, and as an extension of their role as skintellectuals, Gen Zers scrutinise every aspect of personal care product, from the ingredients to the packaging – a movement which has added to the modern phenomenon that is ‘clean beauty’. And this shift is apparent over just one generational change: a study conducted by Compose[d] found that Gen Z are 20% more likely than millennials to exclusively use natural skincare products. 82% said they would switch to a natural product if they found one with results comparable to a non-natural product, and 83% think more products should come in refillable containers – 10% more likely to agree than millennials.
And as such, Gen Zers who are looking for stripped back cosmetics and skincare tend to opt for products that are vegan, cruelty-free, sustainable and free from negatively perceived beauty-buzzwords such as parabens. Vegan launches, for example, more than doubled in the five years between 2013 and 2018, growing by 175% according to Mintel’s Global New Products Database.
Eco-conscious consumers present a huge opportunity for beauty brands to become leaders in sustainable beauty and personal care, as well as pioneers in transforming the packaging industry as we know it. Smart businesses are the ones moving forward with eco-friendly initiatives that resonate with their younger consumer and help to build brand loyalty.
In an effort to reduce plastic waste in the cosmetic industry, handmade cosmetics company, Lush, opened a packaging-free shop in Manchester last year, following other “Naked” shop openings in Milan and Berlin. Some brands also offer incentivised loyalty schemes that are accessible for the digital natives, such as Skincare brand, Haeckels which offers a 40% online discount if consumers share a photo of them cleaning a beach on Instagram with the hashtag #HaeckelsBeachClean.
Gen Z is the most diverse, multicultural generation in history and so another trait that defines them as consumers is a rejection of generalisation and strong value of diversity and inclusivity. One size fits all can’t function, and in recent years, the beauty industry has worked hard to become more inclusive and less Caucasian-centric. A clear example of this is Fenty Beauty’s exceptional sell-out success when launching 40 shades of foundation, later expanding it to 50.
Beauty brands that have a product offering as diverse and their customers and openly engage in these conversations are in favour with this cohort. And it is not just about race, they expect a broader inclusivity of body types, genders, disabilities, inclusion of the LGBTQ+ community and more. For Gen Z, it is important that beauty brands see than as unique individuals and expect every single person to be presented. For them, beauty and personal care is an outlet for self-expression, and an opportunity to experiment, have fun and celebrate their uniqueness. In their quest to define their own identity, they share this experimental process with their friends both online and offline.
With more liberal views on race, sexuality and self-expression, Gen Z reject gender-conforming attitudes more so than any generation before them. This plays into beauty trends and is immediately evident in the increased popularity of male beauty amongst the younger generation. All under the age of 21, influential male beauty fanatics have become household names, for example James Charles, Bretman Rock and Jake Warden who have amassed 35.2 million Instagram followers between them. According to Korean e-commerce
Giant, Gmarket, sales of colour cosmetics to male teenagers increased by 71% in 2017, compared to 13% in the previous year. Male-focused make-up launches are increasing, such as Korean brands LAKA and Sneaky, as well as gender-neutral brands like The Ordinary, Fluide and Youth to The People.
Connecting with the most connected generation
“The key to understanding Gen Z and their beauty needs is to accept their fluidity” comments Claire Varga of WGSN. “They are self-educated, allusive and eco-conscious, and they actively seek out beauty brands that share these values.”
Generation Z are our first digitally native generation. Whilst they are receptive to new technologies and live their lives online, they still desire what is real, plus a physical and personal experience. They want to experiment, and they want to have fun. But they are also serious about non-negotiable causes such as climate change, diversity, and equality.
Gen Z will favour brands that, like them, have a strong purpose and identity. Increasingly conscious of ‘Selfie–Esteem’ – the relationship between body dissatisfaction and social media – research shows that seven out of ten (71%) Gen Zers would prefer to always feel good than always look good. By contrast, millennials were more interested in looking good, on a quest for what many would argue is an unattainable beauty standard.
This cultural shift is perhaps the biggest takeaway that brands, marketers, formulators and R&D professionals can take when considering products for the next generation.
Learn more about the influence of Generation Z at in-cosmetics Asia 2020 from Mário Braz De Matos, Controlled Disruption Co-Creator & Practitioner, with over a decade of client-side work with Unilever and Nokia across developed and emerging markets
Mário Braz De Matos will be discussing the societal shifts that have been impacting the personal care and beauty industry on our Marketing Trends & Regulation Theatre this year. Join the session ‘Disrupting the beauty landscape – the role of Gen Z and Millenials’ to understand the main driving forces and the role of Generation Z in influencing purchase decisions, and how to adapt your brand and products to a scenario dominated by digital natives. The presentation will take place on November 5th at in-cosmetics Asia 2020.
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 [US] – Commonsense Media, 2018