Beauty Store Business magazine - January, 2020

The Retailer's Guide to Millenials

10 things beauty retailers need to know about millennial shoppers—plus tips on how to capture their interest
Millennial Shoppers

If there were ever a generation that deserved your thoughtful planning, merchandising and product selection based on its sheer magnitude of population, shopping prowess and buying power, it’s the millennials. Born between 1982 and 2000, millennials have officially surpassed baby boomers as the largest generation, accounting for roughly 25 percent of the American population—about 80 million people, per the U.S. Census Bureau. Not only that, the millennial population is still growing, as immigrants continue to populate the United States. If that weren’t sufficient to pique the interest of savvy retailers, experts estimate millennials will spend $200 billion annually by the end of 2017.

A few things are clear about millennial beauty shoppers: They are smart spenders and knowledgeable shoppers who don’t mind splurging when something excites them or is exactly what they’re looking for. “Compared to older generations, millennial households underspend their expected share across beauty as a whole. On the other hand, millennials spend 20 percent more than their fair share in haircare accessories and 14 percent more in cosmetics,” explains Jordan Rost, vice president of consumer insights for Nielsen. In other words, they spend where it matters to them.

What’s even more interesting is that skin care and personal care are among the more important beauty categories for millennials, bumping up against makeup, of course. A couple of factors may contribute to this trend:

Millennials are an extremely conscious group. They’re aware of the ingredients in the products they use, and they care about how the brands they buy impact the world around them. So, it makes sense that millennials are mindful of spending their hard-earned cash on beauty products that really count. And truth be told, this group is not getting any younger, with the oldest millennials now in their mid-30s. This insight rings true at organic and natural beauty retailer Vert Beauty. “At Vert Beauty, you will find millennials spending the most on skin care,” says Vert Beauty founder and owner Amanda Hume. “They are getting to the age where aging is a concern for them. So, they tend to splurge on a facial serum versus a new eyeshadow.”

Rost adds, “Personal-care products are the second most commonly purchased consumer goods online, behind only certain health products. This is particularly true for millennials, 60 percent of whom will purchase personal-care products online over the next six months.”

Katie Matthews, director of stores east for beauty retailer Cos Bar, notes millennials’ tendency to invest in one or two products, rather than an entire regimen, when it comes to skin care. Retailers would do well to be aware of this fact when selecting products for their own stores.

Millennial males are increasingly purchasing men’s grooming products. “We see men who are on the later spectrum of millennials who are concerned with aging,” says Hume. “We sell a lot of facial cleansers, moisturizers and beard oils. It is definitely a category that will continue to grow. At Vert Beauty, we just expanded our men’s selection, so that the men can have more options available (even though everything in our store is unisex).”

Aside from makeup, skin care and personal-care products, natural ingredients are another big draw for millennials. A variety of shopping characteristics and preferences apply to millennial shoppers. As Rost puts it: “The millennial generation spans a wide range of life stages, from young adults still dependent upon parents or guardians to older millennials starting families of their own.”

Here are some top millennial insights retailers should know.


1. Open to New Ideas
“Generally speaking, millennials are more open to new ideas than older generations,” says Rost. He adds that 77 percent of millennials are willing to try new brands. This means that your millennial customers are likely to explore those new products you add to your shelves that are unfamiliar and even different>P>.

“They want to see the latest and greatest,” concurs Christine Sandoval, Cos Bar’s director of stores west. “They are confident, adventurous, trend driven and attracted to newness. Other generations come in with specific concerns that they want to address. Millennials come in for an item or brand that they’ve heard about.”

2. Experience Matters
Millennial shoppers are a sensory and experientially driven group. They want to see, hear, taste, touch and smell their prospective purchases. And they want to have a good time doing so. Atmosphere, customization, personalization and experience all matter.

“They are independent shoppers and look for an environment where they can do their thing

: fix their lipstick, spray their hair, touch up their mascara,” says Sandoval. “They are not always coming into the store to buy, but rather to experiment and discover. If they’re coming into a store instead of buying online, they want the one-on-one attention. Here, millennials can receive a personal experience, but still have anything and everything at their fingertips to try.”

3. Tech Savvy
This generation is a tech-savvy one. Thus, retailers are advised to keep current with the latest and trending technologies that affect retail. Millennial customers are making mobile payments, purchasing online and using digital coupons and location-aware apps. “Online sales exceeded $12 billion, according to Adobe Digital Insights in 2016, which reinforces the importance of your brand's access and ease online in addition

to the store retail experience,” says Joan Kuhl, founder of Why Millennials Matter. “Millennials want access to both, but, for sure, are going to be banking on the option of purchasing online.”

Jenna Hilzenrath, public relations director for beauty subscription service and retailer Birchbox, says most of Birchbox’s traffic comes from mobile. As a result, the company is giving even greater attention to mobile. “It's been a huge priority to maximize our mobile experience—through both our app and mobile web—and make it as fast and easy to use as possible.”

Retailers that follow suit and align their operations with their customers’ technological habits keep their stores competitive and relevant.

4. Intelligent Shoppers
Millennial beauty shoppers are smart, experienced, curious and discerning. “Millennials are savvy shoppers who can research your brand/product everywhere and anytime,” says Kuhl. “So, top Google searches and your brand homepage are critical.”

Sandoval adds, “They are independent shoppers and are comfortable browsing and trying on their own. They comparison shop and do a lot of research online before they buy.” Consequently, smarter retailers that are more experienced, curious and discerning will capture millennials’ trust and interest.

5. Budget Conscious
Many millennials entered adulthood amid the recession, receiving a crash course in discerning value before making purchases, due to limited funds. Hume’s experience underscores this observation: “Millennial shoppers look for value and quality. For instance, they will purchase a more expensive facial serum—if they are sure that it will be worthwhile—and a less expensive facial cleanser—that they trust—to meet their budget. They tend to think about the pros and cons of purchasing products, and if their money would be well spent.”

Karen Grant, global beauty industry analyst at The NPD Group, concurs: “Millennials shop most frequently, but cannot afford to waste their limited resources on anything that does not work or that does not either elevate their status or benefit their look.”

6. Loyal? Maybe…
Beauty retailers and experts express varying opinions about the loyalty of millennial shoppers. On one hand, retailers say millennials are loyal to the brands they’re truly passionate about. And, yet, they’re still open to discovering brands that have an edge over their current products. “In my experience, millennials are the trendsetters. When it comes to shopping, they are adventurous with trying new products; but are extremely loyal to the products they love,” shares Hume.

Kuhl presents a slightly different perspective, noting that “Millennials are loyal, but on the prowl for better experiences and stronger alignment to a brand's impact and message.”

However, Sandoval sees an open-mindedness and, consequently, a lack of brand loyalty among millennials. “They may know what works for them, but are open to finding something that works better.”

The answer may be dependent upon the segment of the millennial population that shops your store.

7. Messaging and Source Matter
“More than 50 percent of millennials make an effort to buy products from companies that support the causes they care about (Barkley agency), which is even more aligned to female millennial shoppers in their late 20s and early 30s, as their income rises,” explains Kuhl. “They are sensitive to a brand’s messaging and mission to impact the world beyond making a profit.”

Millennials are prone to doing research to discover those products that align with their values, whether efficacious, sustainable, eco-friendly, organic, cruelty-free, fair trade and so forth. “[This is] very important. I think it is probably one of the most important factors. They like to know where things come from and how they were made,” says Hume.

8. Try Before Buy
“The Next Gen of beauty power shoppers (millennials and younger) not only want or prefer to try before they buy, but they see it as a need,” says Grant. “Financially and socially, product trial fills a real void. They are the most cash-strapped generation and the most likely to state their need to factor cost and budget among their top purchase concerns.”

One might argue that this try before they buy characteristic not only serves their budget but satisfies their thirst for “experience.” Therefore, retailers would do well to offer samples and keep testers readily available, along with other similar incentives. “Millennials are attracted to discounts, gift with purchases and samples, as they tend to be try-before-buy shoppers,” affirms Matthews.

9. Save to Splurge
Believe it or not, millennials’ try before they buy habit may help increase retailers’ profits, as millennials are also apt to splurge when they discover products that are efficacious and exciting.

“Value, price and quality are all very important to the millennial shopper, but she will splurge on a higher priced item if it delivers on its promises,” explains Matthews. “I would venture to say that efficacy is more important than brand name or price. They’ll save up and splurge on an item that they are really excited about.”

10. Chief Influences
A combination of the internet and user reviews may be a retailer’s key to capturing millennials’ dollars. Experts did not hesitate to list these two factors as chief influences on millennials’ buying decisions.

“Real user experience drives their confidence over direct advertising,” says Kuhl. “They need the validation from customers that actually used the product or service to connect with its benefits and the necessity to their own personal life.”
What’s more, “Their beauty authority is the internet,” adds Sandoval.

Observing your millennial customers and continuing to gain insight into how they interact with and select products will always prove profitable for your store. Keeping your staff attentive to customer needs and experiences, as well as continually adding fresh selections to your shelves will keep your millennials happy and attentive.

Kuhl reminds you to tap your millennial workers for their firsthand knowledge of their generation’s shopping experience. She adds these words of wisdom: “Get social. Pick two social platforms to really focus on (even your brand blog). It is not about the number of followers, but more about the authenticity of the conversation! Build an experience that allows for an insider VIP view of your brand from start to finish. [Regarding your content/marketing], you don't need the biggest celebrity. Focus on real people—[stories of] young consumers living their life. Finally, zero in on specific segments, such as the Millennial Mom and study her journey from start to finish to identify the key moments when she needs and relies on your [products or retail brand] emotionally.”

In the end, David Olsen, CEO of Cos Bar, says it best: “Stay relevant and current. Be genuine. Create experiences. Have a strong digital presence.”

[Photo by fotostorm/]