In 2015, the magazine publisher Meredith conducted an unprecedented study on America’s most talked about generation, millennials. Millennials or Generation Y, encompasses those born in the late 70's until the year 2000. This generation, spanning between the ages of 16-38, is population-wise the largest living generation in American history.
According to the Meredith 2020 survey, in the year 2020 millennials will surpass the baby boomer generation to become America’s leading consumer generation. Millennial spending will total 2.5 Trillion dollars, and they will account for two-thirds of all first-time homebuyers.
As brands look ahead to the next ten years, it would be wise for them to begin targeting this large generation of young people. According to a new study from the TABS Group, millennial women are already the heaviest buyers of cosmetics in the $13 billion industry, with 47 percent buying more than 10 products every year. According to Tabs Group CEO and Founder Kurt Jetta “Not only are millennial women the heaviest buyers in the category, but their habits are transforming the industry in the areas of brand preferences, outlet preferences and methods for gathering information.”
One of the transformations is the “Sephoraization” of the beauty industry. According to a recent article by Racked, millennials don’t just want to just see a product, they want to test the product and see if it works for themselves. Millennial consumers want to try their cosmetics before they buy them and retailers are listening. Retailers like Nordstrom are beginning to offer more samples and put their products on display for consumers to test verses keeping them behind the counter. This “try before you buy” mentality has also given rise to subscription testing boxes like Birchbox and Ipsy.
Online reviews are paramount to a millennial maiden’s purchase. According to the TABS study, many millennial shoppers said that a recommendation from a beauty blogger or YouTuber was a determining factor in their beauty purchase. The rise of the beauty blogger has made it necessary for brands in the cosmetics industry to devote a significant budget to influencer marketing. Instead of pushy salespeople, millennials are looking towards beauty bloggers, influencers and celebrities to educate them about the newest cosmetic.
We’re also seeing millennial influence in the packaging of the newest beauty products on the market. Millennials have an affinity for minimalism. In the past 5 years, we’ve seen the rise of “white space”, sans-serif fonts, and streamlined logos. Prestige brands targeting millennial minimalism are on the rise, including Glossier, Ouai, and Herbivore Botanicals.
Lastly millennials are making an impact on the natural beauty industries. Research shows that, given the choice, 49% of Millennial women would purchase natural or organic beauty products. According to a study by Grand View Research , Inc. The global organic personal care market is expected to reach USD 15.98 billion by 2020, Growing demand for organic and natural hair care, skin care and cosmetic products is expected to augment organic personal care market over the projected period.
In conclusion, the millennial generation will be the defining factor in the next decade whether the cosmetics industry’s most established brands will survive or thrive. While prestige brands like Estee Lauder and LVMH are successfully shift their marketing efforts towards America’s largest generation, drugstore brands like P&G’s Covergirl and Clarol fail to hit their mark.