New Study Finds Beauty Consumers Are Waiting to Spend Their Money
According to a new study by ESW, a direct-to-consumer e-commerce company, exclusivity and limited-edition beauty drops are not enticing to the current global price-conscious consumers if they are not a brand’s “super fan.”
The survey sampled more than 16,500 international consumers in 16 countries and found that 67 percent of Gen Zers and Millennials will wait to purchase their products, and risk items going out of stock rather than paying full price. ESW found that consumers from Japan and South Korea are the least price-conscious.
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Contrary to a previous report by WWD about Gen Z’s rise in luxury spending, Clarissa Schealer, ESW’s vice president of sales, beauty, wellness and lifestyle brands says, “Younger consumers are driving the growth in the direct-to-consumer beauty market, yet despite their spending power, they remain very price conscious.”
Forty percent of beauty “power shoppers,” defined by ESW as consumers who spend a minimum of $2,500 online annually, are still bargain shoppers. Only 21 percent of shoppers will spend full price if they’re one of the first people to have it, and only 25 percent will pay full price for the limited-edition product.
Further, the study found that Gen Zers and Millennials are the most likely to spend on beauty products from abroad. Twenty-three percent and 24 percent, respectively, made purchases internationally in the last 12 months. Data shows that China, the United Arab Emirates, Switzerland, Spain and India are among the top countries where consumers spend on beauty outside their home country. The countries they most frequently purchase from include the U.S., France, Germany and the U.K.
“In an industry that has reframed itself around scarcity, exclusive drops and limited inventory, this new data is quite counterintuitive to the trends beauty influencers tout on TikTok,” Schealer said. She recommends to beauty retailers aiming to maximize a brand superfan’s potential that “creating limited-edition products, or offering top customers early access to new products, can help brands overcome price sensitivity in the beauty industry’s key demographic.”
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