AS Watson: Gen Z is lynchpin of our future plans

Superdrug and The Perfume Shop parent company AS Watson has announced results from its global consumer insights research - and the key finding, it seems, is the growing importance of Generation Z to its business.

The group’s insight shows a 23% increase in Gen Z’s spending power in 2018, and over 70% of this demographic’s spending is reportedly on beauty. 

AS Watson said Gen Z - those born between 1995 and 2009 - has become the growth driver of its business, and is the lynchpin of current and future plans.

Although digital natives, this generation of shoppers still typically spend their money in stores, according to the study. AS Watson said most of their time is spent on a screen, but they look for bricks-and-mortar shopping coupled with technology.

Therefore, in-store digital devices have been identified by AS Watson - which has operations around the globe - as key drivers to sales success. The introduction of augmented reality and artificial intelligence in the store environment, as well as the linking of offline and online experienced through apps and social media can aid this process.

Malina Ngai, group chief operating officer at AS Watson, said: “Generation Z is shaping up to have great spending power and they are the future of modern retail.

“It’s important to stay relevant to them, not only focusing on the products they want, but also the stories and experiences that goes with them. To best meet the demand of Gen Z, customer insight plays a vital role in helping us understand their needs, perceptions and even their shopping behaviour.”

In response to what it believes shoppers want to see from its stores, the group’s Watsons Taiwan division opened a ‘Tech Fun’ store, complete with technology devices such as ‘StyleMe’, ‘Tap & Shop’ and a ‘Digital Beauty Advisor’. 

Meanwhile, The Perfume Shop introduced a new digital service earlier this month – Go in Store – to modernise the shopping experience for European customers. The service connects online shoppers with one of The Perfume Shop’s store experts, via live video chat, enabling them to get a personalised consultation and be shown around the store from the comfort of their own home.

As emphasised by recent campaigns and demonstrations around the world - often led by the younger generations - sustainability concerns are a big factor for Gen Z, too.

Retailers across sectors have ramped up their strategies in this area over recent months, and AS Watson believes Gen Z will continue to demand more from organisations in terms of more sustainable products and business practices.

Ngai commented: “Generation Z is a very different customer to the millennials that came before them. 

“They are reinvigorating the retail industry with their desire for experience and activities, while at the same time helping shape a more sustainable future with their emphasis on the environment and doing good.”

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