Many of today’s most successful beauty retailers share this quality in common: They’ve unlocked the code for how to best reach and appeal to Generation Z (Gen Z) and millennial consumers. These two demographics currently wield tremendous purchasing power, which is projected to grow significantly. Gen Zers include the teenagers and young adults of today, born from 1995 to 2018. Their spending power totals close to $200 billion, but since Fast Company projects this age group will account for 40 percent of all consumers by next year, it’s a number that will just keep rising. Forbes reports that millennials, or young professionals born between 1981 and 1995, account for $600 billion of total U.S, consumer spending. By 2020, that figure is expected to balloon to $1.4 trillion annually. If you are not actively marketing your business to capture these younger consumers, it's time. Of course, you must seek to understand the preferences, values and habits of these generations first.
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Although some older millennials do still remember the antiquated days before dial-up, most members of both groups grew up living largely digital lives. That means they shop online with ease and are accustomed to toggling between screens or switching seamlessly from one platform to the next. “Millennials and Gen Z consumers always make online
the first point of call in terms of research and price comparisons,” says Emma Chiu, creative innovation director at J. Walter Thompson Worldwide. Brands should therefore strive to ensure that the designs of their technologies–from websites to social media sites–are user- friendly, pretty to look at and immersive, in order to be considered viable by younger buyers. Bloomingdale’s, for example, now offers curated editorial content on its site, to compel shoppers by the stories behind its products and labels.
Being mobile-first is essential. Studies show that teens, especially, are moving away from shopping on computers to making more mobile phone purchases. According to a 2017 IBM survey, 75 percent of Gen Z members selected the smartphone as their preferred device. Websites should therefore be mobile-optimized: Think easily scrollable content, vertical videos and a simplified checkout process.
It’s no secret that Gen Z and millennials spend much of their time online watching videos on their mobile devices. Platforms like YouTube, Instagram stories and Snapchat have never been more popular. Selling strategies should therefore be social-centric, comprising a variety of formats from video reviews to posted images and stories. But not all social sites were created equal. “Millennials have fallen out of favor with Facebook, whereas Gen Zs were never fully engaged with it in the first place,” says Chiu. “Instagram seems to be the preferred social media platform for both.”
When it comes to shopping recommendations, Adweek found that 24 percent of Gen Z consumers make YouTube their platform of choice. That’s because younger customers grew up in the age of Amazon, and therefore wouldn’t dream of making a purchase without first scrolling through pages of user-generated content to glean honest, insider reports. “Gen Z is more likely to purchase based on a YouTube review,” says the marketing team at Shen Beauty, a popular beauty destination in Brooklyn, New York. “If everyone’s raving about a product and making a fuss online, the impulse is to not miss out on the hype.” What’s more, both demographics are likely to have certain YouTubers they return to time and again, because they base purchasing decisions on their trusted opinions. Glossier, Milk Makeup and ColourPop Cosmetics have all been deemed “millennial makeup,” and it’s perhaps no coincidence that they include in-depth reviews for all the products available on their sites. To further sweeten the pot, many of the bigger YouTube channels (those typically numbering 100,000+ viewers) feature codes that can be used for discounts online.
But honesty is essential. “Not every product will be great, and smart brands are the ones that realize it’s important to create an open dialogue where all thoughts can be voiced,” says Shen marketing. Teens, college students and young professionals enjoy the snack-sized content created on Snapchat, which further speaks to the importance of crafting messaging that can be quickly and clearly communicated–else retailers run the risk of losing sales.
Looking to the future, Chiu sees an increasing variety of new channels for retailers to consider when courting tech-savvy customers. These include chatbots, also called conversation agents, which use software to mimic human speech and spark real-life interactions. Voice technology–aka Siri, Alexa, Amazon Echo–is becoming increasingly integrated with smartphones and other devices, which will continue impacting the ways we search and shop. Finally, emotion recognition technology is a booming market being fueled by advancements in artificial intelligence. It teases a future where machines will have the ability to decipher nuanced facial expressions and body language, thereby determining our emotional response to a product–and tailoring the shopping experience accordingly.
“It’s a myth that millennials and Gen Z consumers only shop online,” says Chiu. In fact, contrary to some popular misconceptions, IBM’s research found that a staggering 67 percent of Gen Z buyers prefer the in-store experience over its virtual counterpart. “I think makeup and skin care, especially, are items most consumers still wish to try on or test before committing to purchasing the full size,” says Shen marketing. True omnichannel consumers, millennials and Gen Z members demand expedience and ease–simultaneously maintaining a desire to touch items in real life while enjoying a unique shopping adventure. It’s a given that stellar customer service, short checkout lines and helpful employees who can provide insight without excessive handholding (which may smack as condescending) are the load-bearing beams of any brick-and-mortar structure. But stop there at your own peril: Young consumers want to be wowed and entertained. “Our research shows that 57 percent of 18 to 34 year olds say virtual reality experiences would make them more likely to visit a store,” explains Chiu. Smart companies set up pop-up spaces or stage in-store events, like concerts or celebrity appearances, to attract customers. Case in point: Barney’s 2017 event titled “thedrop@barneys,” hosted at their flagship store on New York City’s Madison Avenue. The two-day extravaganza featured tattoo artists, an espresso bar, live screen printing, body piercing and panel discussions with top fashion designers. Other retailers, from boutiques to bars, now set up “Insta walls” in-store, where consumers can snap pictures with photo props and lively backdrops, then (ideally) post and purchase.
In an era of misinformation, it’s not surprising that millennials and Gen Zers tend to be wary. More than previous generations, these groups don’t abide slick sales tactics or appeals that feel like blatant manipulation. “Everyone expects transparency, especially in the digital age, when facts can be summoned at the touch of a button,” notes Chiu. As a brand, it’s imperative to be authentic. That translates in two important ways, starting with superior design. “Appearance is everything these days,” says Shen marketing. “At times, good design might be even more important than the product itself.” Glossier’s immense success comes in part from its consistently on-point aesthetic and brilliantly designed packaging. “All items get delivered in a signature pink pouch that has multiple handy uses–pencil case, wet bathing suit holder, gym bag toiletries carrier,” Shen marketing notes. It also includes stickers, which are now ubiquitous. From adorning cell phones to water bottles to notebooks, consumers are doing much of the brand’s marketing work for them.
Chiu is noticing purity in design that feels more human. “Startups in the tech and lifestyle categories are great examples of using clear messaging and language that resonate with the target audience,” she explains. “Hims (for hair loss and erectile dysfunction) and Thinx (period panties) both tackle stuffy sectors, yet have repositioned these industries into something with which millennials resonate.”
Environmental awareness, socio-economic responsibility and issues of inequality vibe deeply with both demographics. “Millennials and Gen Z, who are rooted in social good, respond well to forward-thinking brands working for a better future,” says Chiu. It’s no surprise that 55 percent of Gen Z shoppers choose eco-friendly and socially conscious brands, according to the National Retail Federation. Nielsen reports that nearly one in four millennials would pay more for offerings they knew were sustainable. Toms, whose shoes are beloved by youth for their one-for-one program, is a fine example: One pair of shoes gets donated to a person in need with every pair purchased. “Both generations are motivated by retailers that carry positive social missions,” Chiu continues. “Even banks are tapping in.” Social-impact banking, which aims to promote enterprises enacting positive change and aid individuals at risk of financial exclusion, is on the rise among fintech startups. Shen's marketing team agrees that younger consumers search for beauty brands that align with their moral values, such as being cruelty-free, vegan and inclusive. “They want models of all colors, sizes and genders to be represented in ad campaigns and products themselves.” Fenty Beauty, created by Rihanna, is a company hitting that mark, with its range of shades for every skin tone. What’s more, Rihanna’s Clara Lionel Foundation, an American nonprofit that benefits impoverished communities around the globe, receives 100 percent of all proceeds from sales of Fenty’s CLF Killawatt Freestyle Highlighter. Ultimately, showing you’re inclusive and support positive social change goes a long way to retaining younger shoppers.