The 2019 WWD Beauty Summit in New York produced many key highlights, but one particular standout was the discussion surrounding the spending habits of millennial consumers.
Afterpay CEO and cofounder, Nick Molnar, spoke about how different millennials are compared to other generations. In fact, one in three people in the U.S. aged 18 to 30 do not own a credit card – they use debit cards instead.
This is important because it means millennials are spending their money differently, according to Molnar. He said this is mostly due to the 2008 financial crisis, adding that “by 2025 millennials are going to own half of all disposable income in the workforce in America, and largely in the world.”
Interestingly, Molnar also found that beauty brands understand and connect more deeply with millennial consumers, saying that “a lot of other retail industries are actually looking to beauty to learn.”
Afterpay surveyed 2,000 beauty consumers and discovered that the frequency of millennials' purchases are very unique to the beauty industry, with price being the biggest hurdle.
“What [millennials] want is to buy a set, not the individual eyeliner. They want to transact with multiple units per basket. This is the biggest lost opportunity, and it’s only going to extrapolate.”
The survey found that 76 per cent find new beauty brands and products on social media, while 72 per cent purchase products directly from social media platforms.
70 per cent of millennials also said they are inspired by beauty influencers, with 83 per cent watching how-to videos, and 68 per cent making a purchase.
Additionally, 68 per cent buy beauty products online one per month, with 72 per cent shopping online to buy new products and to restock their favourite beauty items. Meanwhile, 59 per cent are loyal to one beauty brand.
With beauty making up one quarter of Afterpay’s activity, the team is currently working to better engage customers, asking themselves what millennials want and how to trade on these insights.
