BY ELISABETH KING
Anyone seeking insights on Gen Z behaviour, the latest demo to attract the fever-pitch interest of global marketers, will be deluged by a flood of data, big figures and speculation about what this millions-strong age group does and doesn’t want. You will also be inundated with conflicting buzzwords and generalised commentary. Sound familiar? Over the past five years, Millennials have hogged the marketing limelight and it’s time to move on as the oldest cohort of Gen Ys are more likely to have baby seats in their cars than a makeup stash.
Many of the reports and much of the information about Gen Z are based on overseas research, mainly from the US. No bad thing because the Anglophone countries – the UK, Australia, Canada and New Zealand – have many similarities. But it’s important to look at the Australian stats. According to McCrindle Research, Gen Zers born between 1995 and 2010 comprise about 20 per cent of the Australian population and they are the biggest generation ever. One in two is predicted to obtain a uni degree and by 2025 they will make up 27 per cent of the workforce.
Millennials were the first generation to be dubbed digital natives, sparking a revolution in how cosmetic brands approached customers through social media and high-tech innovations such as apps and virtual reality. But little has been written about how Gen Z will impact the beauty landscape.
What and Where They Like to Buy
The oldest Gen Zers are 22 and the youngest are seven, so the majority are tweens and teens. Like Millennials they want to look camera-ready and in 2016 aspirational teens in the US forked out US$2.3 billion on makeup and personal care – 7 per cent of the total US skincare market and 6 per cent of cosmetic sales. Long lashes and perfect skin lead the pack of beauty goals and close to half US teenage girls use mascara and foundation or concealer. Personal care is also getting a major boost from teen males in the US with four in 10 regularly buying facial cleansers, body sprays and fragrances and lip care products.
Much has been made about social media’s role in pressurising teens and Millennials to conform to unrealistic images of attractiveness. But it’s also had a seismic effect on how Gen Z learn how to use beauty products and search for new looks and styles. In a US study, 65 per cent of teen girls are influenced by beauty vloggers on YouTube and 56 per cent follow beauty brands on social media.
Many studies point out that Gen Z beauty buyers love quality, but only if they can afford it. Aspirational brands such as M.A.C and Urban Decay are frequently cited as teen favourites, but so are their mainstream, less expensive counterparts such as Maybelline New York, CoverGirl and Rimmel. L’Oréal Paris is also a hot favourite and recently added 19 year-old Elle Fanning to its celebrity roster of ambassadors. Similarly, Sephora and Mecca Brands are pinpointed as favourite shopping destinations, especially for trying shades and ‘playing’, but many teens are still dependent on their parents for funds and are major consumers at Walmart and Target in the US and Priceline, Chemist Warehouse and other pharmacy chains and Kmart in Australia.
Different Beauty Goals/Committed to Store-Bought
Gen Z may be digitally dependent on social media for cosmetic tips and advice, but their beauty goals are not the same as Millennials and are more age-appropriate, reports Mintel.
More than 90 per cent of teen girls use makeup, says the researcher, but 75 per cent of girls aged 12 to 14 and 69 per cent of those aged 15 to 17 prefer the natural look. “While Millennial women are seeking selfie perfection through contouring and highlighting, their little sisters are embracing a more natural look. Natural-looking hair is also on-trend. Among girls aged 12 to 17, nail care, nail polish, lipstick and gloss, mascara, foundation, concealers and facial cleansing are top of their shopping lists”. Gen Z’s pervasive use of technology is good news for retailers. According to the AMP Capital Shopping Centres annual Recommended Retail Practice Report, 87 per cent of Australian Gen Zers like to shop in stores, as well as online (79%). “The so-called future shoppers are social creatures, drawn to the face-to-face, touch-and-feel contact that in-store shopping provides”, reveals the report. Like other generations, they tend to research products first (61%), check on availability (83%) and then go in-store to buy (87%). They also like going to the shops with friends (53%). Young Aussie males, like their US counterparts, buck the trends of previous generations. Nearly half – 46 per cent – say they are interested in popular trends, by contrast to only 36 per cent of their female counterparts aged 18 to twenty-two. “The research highlights the importance of developing fun, social experiences in-store and the opportunities that emerge once brands and retailers align online and offline”, says Mark Kirkland, managing director of AMP Capital Shopping Centres. “Trail-blazing retailers such as Mecca Maxima and Culture Kings have captured the attention of future shoppers by creating a personalised customer experience that’s exclusive to in-store”.
Another important takeaway from the survey for the beauty industry is that 70 per cent of Gen Zers prefer brands that give back to society. Giving back is a major focus for beauty brands big and small such as L’Occitane’s support of women in Burkina Faso as suppliers of shea butter. Sustainability is another non-negotiable with Australian Gen Zers and 59 per cent are willing to pay more for sustainable products. Because they are the biggest generation and are a step away from making career choices, AMP believes that Aussie Gen Zers will influence the future direction of retailing.
Mobile First/Less Celebrity- Oriented
Brand loyalty may be a thing of the past across generations but Gen Z’s round-the-clock social media habit is good news for beauty brands. According to Mintel, more than 45 per cent of today’s teen girls advise their peers and friends and review beauty products through videos, Instagram and other platforms. They also embrace diversity in beauty even more than Millennials and aren’t so keen on celebrities.
The explosive popularity of Rihanna’s Fenty beauty range, exclusive to Sephora, was a powerful indicator of Gen Z’s multicultural desire to see “someone like me” in ads and colour palettes.
Gen Z is the first generation to grow up with the smartphone and they like to buy through mobiles and even seek advice from their friends in store using the device. More than 50 per cent of Gen Zers have purchased beauty and cosmetics products online. The annual m-commerce index from PayPal revealed that 72 per cent of Australians surveyed shop via their mobiles. Nearly half do so once a week -up 36 per cent since 2016. A significant 25 per cent say they prefer to use smartphones over other devices for buying online – an increase of 40 per cent over the past 12 months.
But Libby Roy, managing director of PayPal Australia, warns that Australian businesses are not keeping up with this huge shift in purchasing patterns. “Over the past year, we’ve seen Australian consumer frequency and preference for mobile purchases growing significantly. However, despite almost three-quarters of Australian consumers transacting via mobile, 49 per cent of Australian online businesses are still not optimised for mobile payments”. It hardly needs pointing out that to capture Gen Z consumers, many retailers will have to re-think their mobile buying technologies.
Accenture’s Global Consumer Shopping Survey 2017 canvassed the opinions of 10,000 respondents in 13 countries, including Australia. Older Gen Zers (18 to 20) were a major focus. Two-thirds are interested in making purchases directly from social media and 44 per cent said it was a popular source of product information. Loyalty programs such as Priceline’s Sister Club are very important to this age group. Yet just 19 per cent shop at a single location or beauty retailer, by contrast to 26 per cent of Millennials. They also believe their opinions count and 70 per cent of Gen Zers say they have posted product reviews on YouTube, Instagram or Snapchat. Three major factors pushing them on the path to purchase are – receiving the lowest price, seeing products in stores and reading reviews.
Millennials were and continue to be a driving force propelling retailers and marketers to put the pedal to the metal on their digital efforts. Gen Z will keep up the pressure to push even further, says Accenture, and introduce more sophisticated innovations in AI, augmented reality and voice activated ordering.