Beauty Store Business magazine - March, 2019

Does Your Store Have Insta-Appeal?

Increase cosmetics sales in your store with a section of products trending on Instagram for Gen Z and millenial consumers.

Millennial and Gen Z consumers differ from the clients of yesteryear because they are constantly inundated with options. They have become more aware of specific products and brands compared to Gen Xers and boomers, who are more likely to turn to retail sales staff for advice.

Tapping social media trends in your business can give you the advantage needed to attract these generations of younger women. To appeal to those who use Instagram as their source for discovering new brands, retailers should not only keep their décor up to date but also have the inventory to match. If you carry cult-favorite brands, you’ll capture those coveted “likes” in real life.

To get to know what the women in this demographic are looking for, we turned to the pros at global market research firm Mintel and found, unsurprisingly, that millennial and Gen Z (also called iGen) beauty consumers are focused on appearance. Millennial women are hyper-engaged when it comes to their beauty routines, and are much more likely to keep up on hair, makeup and skincare trends than women overall. According to the firm’s 2017 report, “The Millennial Beauty Consumer,” millennial women use the most beauty products, have stronger makeup application skills and are more likely to experiment with their cosmetics when compared to women of all generations. This increased engagement with beauty has led to more spending on hair care, makeup and skin care over the last three years. What millennial women are spending on is also different, with a self-reported penchant for natural and high-end brands.

“Many people are not storytellers like we are; we want the customers to know what they are buying, why it was made and how it is going to help them.”

—Jessica Richards, founder, Shen Beauty

The increased enthusiasm in the younger market segment becomes apparent when looking at overall profit trends. Millennials have propelled the beauty industry well into the multibillion-dollar range. Mintel’s “U.S. Beauty Retailing” report values the market at $54.8 billion–with sales projected to reach $59.3 billion or more by 2022.

Where consumers are buying, and what they’re looking for while shopping, varies according to generation. For those in the iGeneration, ages 12 to 24, 39 percent seek out a specialty beauty retailer, more so than any other group. Women of all ages are most likely to buy from a mass merchandiser (47 to 62 percent). Significantly fewer millennial and iGeneration women (respectively 24 and 23 percent) purchase cosmetics at department stores.

To capture this sought-after segment of consumers, retailers are changing the way they sell their products by creating special sections of trending items to draw in younger customers.

Millennial and iGeneration women like to have an experience. When asked about the services or offerings that might draw them to choose one beauty store or online retailer over another, they overwhelmingly responded with “personal makeup artists, beauty product demonstrations or events, kiosks/stations, the ability to customize or create my own beauty products as well as in-store beauty services and augmented reality tools to try on makeup.” Offering up trending products–and Instagrammable moments with those products–will help position your store as a go-to destination.

In creating the kind of shopping experience these young beauty consumers desire, it’s important to look closely at what makes the millennial and iGeneration shopper unique. It could affect who you choose to hire.

Gen Z and millennial women prefer to find a product on their own rather than asking a sales associate, at 67 and 61 percent, respectively. The iGeneration in particular are overwhelmingly influenced by beauty bloggers; 27 percent value their advice more than recommendations from in-store staff, while only 16 percent of millennials and 11 percent of all women felt the same. However, employees are still critically important. Twenty-five percent of iGeneration women are interested in personal makeup artists, and 18 percent feel “sales associates are influential when it comes time to purchase.” In order to capitalize, seek out hires with an online presence or those who double as makeup artists; they can educate your consumer and give them an in-store taste of beauty blogger know-how.

One paradigm for successfully capturing the younger consumer comes from Shen Beauty, located in the ultra-trendy Carroll Gardens section of Brooklyn, New York. Shen founder Jessica Richards opened the store in 2010, “as a haven to bring the cleanest products from Europe into the States.”

The store is known for a selection of top natural brands, a clear category of focus for millennials in particular. With Shen, Richards says she set out to “curate a selection based not just on ingredients and efficacy but on packaging and storytelling.” This attention to store inventory was informed by her personal fashion perspective, treating the beauty store stock as one would a wardrobe. Her exploration of which brands are best for her target demographic evolved from there.

“What started as very strict natural and organic brands grew into brands that are effective, not just natural and organic,” Richards says. “The modern woman does not only shop organic.” Shen is exemplary as a 34-and-under cosmetics mecca, not only because of the heavily vetted brands and products but also because of the knowledgeable sales staff. Richards says she makes sure her employees “truly understand and want to help, not necessarily oversell, the customer.”

The Shen shopper gets a taste of the millennial experience she expects. To make her feel at home, Richards adds, “We strive to bring her under our wing and help her cure whatever problem her skin may be having.”

She trains employees to function as brand ambassadors, so customers trust and seek out their knowledge. “We like to launch newness with a story to tell. Many people are not storytellers like we are; we want the customers to know what they are buying, why it was made and how it is going to help them,” she says.

Part of the Shen model is to offer customers an opportunity to receive beauty services using the products for sale in the store. With a keen eye, Richards identified the need for this element of iGeneration customization: The neighborhood lacked estheticians, and she noticed that women wanted to try the products first, as some
of them are quite expensive. However, smaller brands did not offer samples. “We use all our products on our shelves in the treatment rooms and tailor each treatment to the person’s skin type,” Richards explains.

“Look for the special brand and how it speaks to you. It doesn’t necessarily have to be an entire offering; it could just be one SKU that you stand behind and you are consistently sold out. This is your story to tell, and what you want your business to tell.”

—Jessica Richards, founder, Shen Beauty

To her, iGen, millennials and Gen Xers differ from boomers in skin type and budget more than anything else. Richards sees interest in natural products spreading to women of all ages. “I think boomers are becoming more aware than ever of the harmful chemicals in skin care, and thus are truly looking to learn and care for themselves,” she says, noting that what started as a trend has become pervasive in the industry–and a brand expectation.

While this type of business model may come naturally for Richards, bigger retailers are undertaking major revisions in both stock and appearance to adapt to the younger demographic. Nordstrom expanded their natural beauty offering to include Well Beauty products online and in 38 locations starting in January 2018. The expanded category includes the “beauty while you sleep” concept (with brands such as Hum, Moon Juice, Slip and The Beauty Chef); an aromatherapy category (featuring Aromatherapy Associates, Esym and Vitruvi); a self-care category (African Botanics, Agent Nateur, Karma Bliss, Kopari, NuFace, Pursoma and Yuni); and the promise of beauty from within via supplements (such as Chalait and Glotrition).

To truly achieve a revamp, Neiman Marcus turned their attention inward, recruiting younger employees to lead the charge and creating a section dedicated to iGen consumers. A Neiman Marcus executive revealed that the store is trying to appeal to consumers who discover new products through Instagram. The department store recently added 45 beauty lines, including 8Greens, The BrowGal, Edward Bess, Lawless Beauty and Sunday Riley–a vast change from the one to two brands formerly selected each season. In their Dallas location, the products will be housed under a neon sign that says “New, Now, Next.”

What does this mean for your store? When appealing to iGen and millennials, go for an element of authenticity in your inventory. When you believe in your products, your consumers can tell. “Look for the special brand and how it speaks to you. It doesn’t necessarily have to be an entire offering; it could just be one SKU that you stand behind and you are consistently sold out,” Richards says. “This is your story to tell, and what you want your business to tell.”

[Photos courtesy of Riley Rose and Shen Beauty]