Gen Z may be the first generation of digital natives, but insight from AS Watson Group shows that in the beauty category they predominantly prefer in-store shopping.

The international health and beauty retailer gathered insight from its businesses around the world to compile an overview of what is driving Gen Z customers and how they can be attracted to its retail brands across the globe.

In 2019 Gen Z – those born between 1995 and 2009 – became the largest consumer segment and now account for 32% of the global population of 7.7 billion.

The retailer operates over 15,200 stores under 12 retail brands in 25 markets and reported a 23% increase in Gen Z’s spending power in 2018.

The company found that Gen Z love the social and experience aspects of browsing and shopping at physical stores with their friends – 99% of Gen Z shop offline and like shopping in “destination stores” (stores in shopping malls and city centres).

These digital natives spend most of their time on screen and they look for brick-and-mortar shopping coupled with technology so in-store digital devices are key drivers to sales success – such as the introduction of AR and AI in the store environment, as well as the linking of Offline and Online (O+O) experiences through apps and social media.

On average 86% of Gen Z were beauty shoppers, and over 70% of Gen Z spending is on beauty – the highest among all the generations. This segment chooses beauty products based on the trend, price and quality and use their phones to read peer reviews while browsing in store.

“Generation Z is shaping up to have great spending power and they are the future of modern retail,” said Malina Ngai, group chief operating officer of AS Watson Group. This segment has become the growth driver of the company’s business and forms the lynch-pin of its current and future plans.

Connecting with Gen Z

To capture Gen Z customers, AS Watson business units across the globe have created campaigns to resonate with their local markets.

In China, for example, AS Watson talked directly to students with a series of flash mobs and beauty classes as part of a series of on-campus activities throughout April. The events were designed using research into the habits and preferences of Gen Z, to show them how AS Watson aligns with their values and help them live a colourful life.

A different approach is evident in Thailand, where AS Watson is working to reduce plastic bag usage and running a No Bag Day Campaign. One day every month, all loyalty members who don’t take a plastic bag receive bonus points as a reward.

“Generation Z is a very different customer to the millennials that came before them. They are reinvigorating the retail industry with their desire for experience and activities, while at the same time helping shape a more sustainable future with their emphasis on the environment and doing good,” said Ngai.

Sourced from AS Watson; additional content by WARC staff