I recently attended a great presentation by my friends at The Pull Agency about the future of the beauty market and how to prepare to capture the spending power of Generation Z. The presentation included some research findings, panel discussion and demonstrations of cutting-edge technology with its possible applications. I wanted to share my thoughts with you and see if I can extract some key learnings for smaller beauty businesses and non-beauty businesses.
Who is Gen Z?
Generation Z are currently 4-24 years in age and have just become the largest generation in the UK. They are the first digital natives - they don't know a world without computers and mobile phones. They expect 24/7 digital content on-demand (remember when the 4 TV channels we had stopped for the night!!??). In fact they spend on average 10.6 hours per day digitally consuming. They are the most educated and the most financially powerful generation of all time. They spend £7billion annually but are also socially conscious. Since they were born they have been bombarded with environmental concerns both at school and in the media.
Gen Z and their relationship to beauty and shopping
Gen Z shops earlier for beauty than previous generations. 60% of Gen Z have bought a beauty product by the time they are 14, compared to just 39% of millennials. The survey results said 14 years old, but I have a 7 year old at home who has bought certain beauty items (tinted lip balms, nail varnish, kids eye shadows) from about the age of 5! (please don't judge me!).
Unsurprisingly, Gen Z searches for new looks, trends and brands begins with Instagram and YouTube. (Whereas Gen X and baby boomers tend to rely more on traditional media like TV and magazines plus word of mouth). However, after the discovery phase, more than half of Gen Z would rather buy in store. In contrast, it is the millennials who are more likely to research AND buy online (possibly due to being time poor - as they are busy with jobs and children).
Brands need to look for ways to combine the physical and digital world, creating an immersive experience and a sociable escape from the digital world.
Despite their consumption of digital content and general trust of brands' websites, there is a growing concern among Gen Z about privacy. They want information and transparency at their fingertips without compromising their personal information.
Who influences their buying decisions?
Very high on their list was 'influencers' (33%). But not celebrities (14%). A brand looking to employ an influencer is much better off aiming for the 'micro' influencer (1k-40k followers) who is a specialist in that field, who can inform and persuade. (Although if you are just going for brand awareness, then by all means go for a celebrity with a huge following!). Also high on the list was friends - with 31% saying they would most likely be influenced by their friends when thinking about health and beauty products.
Product reviews and ratings are also more important to Gen Z than to other generations, with 83% saying ratings and reviews influence their purchases, compared to 79% of millennials, and 65% of Gen X.
Gen Z: Their relationship with themselves and the wider world
When surveyed, 71% of Gen Z said they would prefer to always feel good than always look good. However, as pointed out by expert panellist Peter Tighe from Vice Reversa, perhaps this is more a case of two sides of the same coin than an either/or situation? Either way, key trends for Gen Z within the health and beauty category include health & wellbeing, natural, organic, cruelty-free, the environment, as well as technology and AI. (see below word cloud).
Brands and retailers need to up their game when it comes to recycling, packaging, ingredients etc - these concerns are now 'hygiene factors' (expected) rather than 'motivators' (nice-to-have).
Expert panellist Bernhard Koelbl from Schwarzkopf Professional made the excellent observation that Gen Z want to show their natural authenticiy - being their true selves and embracing imperfections. This means that products need to be more targeted, more personalised and work with the consumer's individuality, rather than masking it.
The role of Technology
22% of UK households own a voice assistant - and it has been predicted that half of all searches could be carried out by voice by some point this year. Most attendees and the presenters seemed sceptical of this figure. However, when I got home, my aforementioned Gen Z daughter grabbed the Ipad and started bombarding it with questions. "Show me a picture of a motorbike from the future" "How do you say 'I would like a biscuit' in French?" All of which the Ipad obligingly tried to answer - instead of telling her "I can't right now, I'm cooking dinner". What suddenly occurred to me is that, in the absence of being able to type as fast as questions form in her over-active brain - she can simply ask the questions aloud. My feeling is that these young Gen Z'ers are going to feel much less awkward about using voice search than we do! This brings new challenges to brands, who need to take voice search into consideration when building and optimising their websites. Tone of voice and content structure will be even more important than it ever was.
Augmented reality was also discussed at length - with great examples of virtual packaging by Lush in Japan, augmented reality mirrors in Sephora and even an AI hairbrush by Kerastase! The use of technology presents one big opportunity for brands - data collection. Being able to collect vast quantities of data on product use and effectiveness will allow brands to tailor products even more to the individual needs of their clients. More data = more opportunity to personalise products and services, provide a personalised customer experience, create more effective products, personalise product recommendations, personalise the customer experience at every touch point, and improve customer retention.
Gen Z and their similarities with other Generations
Perhaps the most startling thing about this research is how familiar the struggles and concerns of Gen Z feel to me (a borderline Gen X/Millennial). In the words of The Pull Agency CEO Chris Bullick, 'Everything has changed, and nothing has changed'. The technology and the marketing channels may change, but each generation is still just 'human' with the same human psychology that they have had for thousands of years. And just like all of us, Gen Z wants brands to focus on solving their problems, put the consumer first, deliver authenticity and integrity, with timely and relevant content, tailored as appropriate for each channel. They want an 'experience' - to be taken care of from checkout to delivery and beyond.
Brands must understand their niche - they need to know what their USP is and communicate that effectively. They need to use marketing channels that are a right fit for them and their customers and develop content that is engaging without it feeling contrived. Brands need to be THEIR authentic self to allow their customers to do the same.