“Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it” George OrwelI once said. This holds true as different generations attempt to gain a better understanding of the other, while harboring a preconceived bias. Let’s take a deeper look into the two newest generations.
The term "Millennial" is a buzz word and has been a hot topic for a few years. There's many articles written about Millennials with many people trying to dissect this generation. Millennials are classified as people born between 1981 and 1996. Well, there's a new generation entering as a consumer and while they posse similar qualities to Millennials, their buying behavior varies.
Generation Z consist of people born in the mid 1990's through the early 2000's. According to Forbes, they make up 25% of the U.S. population, surpassing both Baby Boomers and Millennials.
Spending Habits
Millennial shoppers in the U.S. spend $600 billion each year, with an average yearly expenditure of $47,112.1
Generation Z shoppers in the U.S. have $200 billion in spending power, including the influence they have over their parents and their household shopping.2 By 2020 they are expected to account for 40% of all U.S. consumers.4 Generation Z consumers tend to lack brand loyalty with 52% of Gen Zer's willing to switch to a different brand if quality becomes an issue.2
Digitalization of Shopping
Digital strategies for companies are important for both generations. Gen Zers are overconnected to digital since they have grown up always having the internet and access to purchasing products and services virtually.
Millennials grew up during the rise of the internet and were early adopters to digital, social media and purchasing products online. Millennials are more likely to purchase a product if they have read a product review or testimony first.1 Since both generations have adopted a strong digital competency, it's important for companies to have a mobile and social media strategy to connect with this group of consumers. They want to be able to access
product information, product reviews and connect with brands via mobile devices. In addition, simplifying the buying experience is a good way to connect with both generations. They are interested in streamlining purchases via mobile devices or apps, whether it be in-store or online.
Impact on Cosmetics
Millennial women buying habits have helped to shape the cosmetic industry. They created a need for niche products and helped drive the way products are offered to consumers.3 Long gone the days of only purchasing from the drug store or the cosmetic counter at a department store. These consumers are now utilizing subscription-based services to try different products, they are shopping at cosmetic retail stores to purchase a diverse mix of products at once and they're purchasing online to streamline the shopping process.
Women Gen Zers are known to spend the most money on beauty products and are more willing to buy high quality products.2 In addition to purchasing online, this generation has sought purchasing cosmetics from specialty brick and mortar retailers such as Sephora and Ulta. They are driving the need for high quality prestige products and are well versed in ingredients, due to being able to instantly conduct research via the web.
In addition, social media, bloggers, influencers and YouTube have greatly impacted the way both generations purchase cosmetics.
References
1. Law, L. (2019). 45 Statistics on Millennial Spending Habits in 2019
2. Heller, L. (2015). Move Over Millennials, Generation Z Is In Charge
3. Swain-Wilson, S. (2018). 10 ways Gen Zs spend money differently than their Gen X parents
4. TABS Group (2015). TABS Group 2015 U.S. Cosmetics Study Finds Millennial Women Buyers Reign in $13 Billion Dollar Cosmetics Market
5. Pearson, B. (2018). 7 Ways Gen Z Shoppers Are Different From All Others -- And None Include Technology
