Young Generation Z Fosters Boost in Sales of Self-Care Products and Cosmetics
Young Generation Z Fosters Boost in Sales of Self-Care Products and Cosmetics
Social media's focus on aesthetics has turned into a societal trend, with Sephora, part of LVMH, leading the way.
Ever since the Baby Boomers started maturing in the music-filled '50s, young adults have been excessively concerned about their appearance. Now, propelled by the surge of user-generated content on social media platforms, it's Gen Z and Millennials who are driving the expansion of the beauty and personal care industry globally.
By 2023, the worldwide market was approximated at around $550 billion, with North America accounting for about 25% of that figure. Through 2030, estimates project a compound annual growth rate of up to 7.7%, which is substantial compared to the 3% predicted increase in overall U.S. retail sales for the current year by the National Retail Federation.
A major driving force has been Gen Z's active participation in user-generated content on social media.
Appearance has become a team effort, as evidenced by the countless videos on TikTok and YouTube made by teenagers as young as 13, demonstrating their skincare and makeup routines and the products they use.
While it may be concerning that teenagers are preoccupied with wrinkles, this is the reality of their world today. Entertainment seems to be limited, social media filters "correct" blemishes and create unrealistic expectations, and creating a positive impression has never been more crucial.
In a survey conducted by McKinsey & Co. in the spring of 202X, American Gen Zers indicated a desire to invest in beauty products in the future.
At the forefront of brands catering to this market is Sephora, owned by LVMH Moët Hennessy Louis Vuitton. In 2020, during the Covid-19 pandemic, Kohl's announced a partnership with Sephora, opening Sephora stores within their own stores.
This collaboration proved to be a strategic move for Sephora. By 2023, more than 900 Kohl's locations had incorporated Sephora sections, and today, there are over 1,000. The results have been astounding. Sephora store-in-store sales were $1.4 billion in 2023 and are projected to reach $2 billion by 2025.
According to Pass_by, a retail industry forecasting service, Sephora has seen a 20% increase in store visits from Gen Z and a similar increase from Gen X (44-59 years old).
Gen Z men are also contributing to the growth of the global beauty industry, particularly in Asia, as per a recent McKinsey & Co. report.
A third of Asian men surveyed by McKinsey use makeup regularly, compared to 5% of men in the U.S. and 10% of men in Europe.
According to McKinsey senior partner Kristi Weaver, "Just because Gen Z plans to invest in beauty products doesn't guarantee sales for any particular brand". Instead, brands need to establish a "meaningful, authentic, and collaborative connection" with consumers, essentially by engaging and building relationships with them.
Weaver also advises, "Beauty leaders must ensure their brands grow and evolve with Gen Z". This advice applies to any retail business.
Gen Z's interest in beauty products, as revealed in the McKinsey survey, is driving a significant portion of consumer spending in the industry. This trend is also visible on social media platforms like TikTok, where Gen Zers frequently share skincare and makeup routines, influencing others. Sephora, with its strategic partnerships and store-in-app features, has successfully tapped into this market, resulting in substantial sales growth.