A.S. Watson reveals Gen Z as its key growth driver

In 2019 Gen Z became the largest consumer segment and now account for 32% of the global population of 7.7 billion. Using its extensive network of over 15,200 stores under 12 retail brands in 25 markets, A.S. Watson Group’s insight found a 23% increase in Gen Z’s spending power in 2018. 

The insight also shows that 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. 

As a result, A.S. Watson group has identified Gen Z as the growth driver of its business, and the lynch-pin of current and future plans.

While Gen Z is the first generation of digital natives, insight shows that they prefer in-store shopping; they love the social and experience aspects of browsing and shopping at physical stores with their friends. ASW’s customer insight shows that 99% of Gen Z shop offline and they like shopping in “destination stores” (stores in shopping malls and city centres).

The digital natives do, however, 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. This has led to 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.

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

In Asia, Watsons China talked directly to students with a series of flash mobs and beauty classes in university campuses. Meanwhile, Watsons Taiwan opened a Tech Fun store with technology devices including StyleMe, Tap & Shop and Digital Beauty Advisor.

In Spring 2019, Watsons Taiwan launched the #BeautyMyWay campaign in line with Pantone announcing that ‘Living Coral’ the colour of 2019. To bring this to life, a pop makeup fashion show installation was created in the Xiemending shopping centre with a social mechanic asking customers to share photos of them with coral lipstick on social media in exchange for a free lipstick and coupon. 

A.S Watson Group’s insight found that sustainability concerns are a big factor for Gen Z customers. Since 2014, the company has banned the use of microplastic in its rinse-off own brand cosmetics or personal care scrub products and by the end of 2019, this ban will extend to all brands too, meaning no microplastic will be found in any rinse-off cosmetics or personal care products sold in stores.



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