By Farla Efros, President, HRC Retail Advisory Photo credit: Tyrell Hampton
There is a significant shift in the way Generation Z is shopping for beauty products, creating an opportunity for retailers and brands to reimagine the store experience and how they interact with and attract this growing demographic. These consumers (ages 10-17) are going in-store to shop, but enter the store well-educated on the products they seek thanks to the influence of YouTube beauty gurus, friends and celebrities. They are confident in their purchases, have an instinct to stay on trend and require peer approval to make a purchase.
Generation Z’s unique shopping habits demand a differentiated retail experience from their equally tech-savvy Millennial counterparts and parents, who prefer to shop online and are most influenced by the store experience rather than their peers or bloggers. Beauty retailers and brands need to be attuned to Generation Z’s evolving shopping behaviors and align stores in a way that will accommodate a customer base in search of personalized looks, technology access in-store, DIY-inspiration and discounted products.
As Generation Z gains spending power and influence over household purchases (82% of parents admit that their children have some influence over purchasing decisions) retailers need to be ready to meet their expectations. To better understand the influence of Generation Z and how they are shopping for beauty, we conducted a survey on their shopping habits and influencers driving purchase decisions – from access to Wi-Fi and positive peer feedback to social influencers and discounters.
Below are a few key takeaways:
Wi-Fi Required In-Store
Generation Z enters stores holding their favorite savvy accessory – a smartphone – in search of a quality Wi-Fi connection, which serves as a gateway to their ever-important social network and peers. With most Generation Z kids on limited data plans from their parents, Wi-Fi access is essential. In fact, more than 90% of these consumers claim connection to Wi-Fi impacts their overall shopping experience.
Real-Time Social Media Feedback Drives Purchases
Real-time peer feedback via social media is key for Generation Z shoppers looking to make a purchase in-store. Generation Z’s primary influence when shopping for beauty products is their friends and YouTube beauty gurus (54%) – while in contrast, Millennials are most influenced by the store experience (34%). While more than half of Generation Z use social media as they shop in-store, 40% made a purchase decision based on feedback they received from their friends in real-time.
This feedback expands past the primary trip to the retailer and has an influence over return decisions as well. The study shows Generation Z’s return rate based on social media response from peers was as high as 62%.
Gen Z’s #1 Celeb Influencer: Kylie Jenner
Celebrities also have a significant influence over Generation Z before heading in-store, particularly through social media networks where they “drop” their latest products. With Generation Z seeking to emulate the likes of the Jenners and Kardashians, it is no surprise that these celebrities’ lip kits and various beauty lines have been so successful. This powerhouse has created tremendous buzz in the industry, and brands and retailers need to find the next powerhouse to create excitement in order to reignite brands.
Discounted Beauty Allows Gen Z To Stay On-Trend
While Sephora and Department Stores are leaders in the beauty industry, Generation Z’s taste for the latest trends and heightened money consciousness drives them to shop in discount stores. In fact, in the last six months 55% of Generation Z purchased beauty products at Discount Stores such as Wal-Mart. The traditional store experience itself is significantly less important than cost to Generation Z when purchasing beauty products (11%), as they treat makeup as outfits – changing their look daily to be unique.
Amazon is also a leader in beauty for Generation Z, with 35% saying that’s their go-to store for beauty products. When it comes to Millennials, 49% said they shop at Discount Stores and 45% on Amazon.
Generation Z’s vastly different shopping behaviors are necessitating a change in how beauty retailers and brands connect with, engage and inspire these consumers to shop at all touchpoints. Albeit they watch and love YouTube beauty tutorials, they seldom emulate them. Thus, it is critical for retailers and brands to understand how these consumers shop, who their primary influence is, and what captures their attention in order to build strategies that will not only attract but retain this generation, which will directly affect their ability to tap this tech-savvy group’s enormous sales potential both now, and into the future.