In partnership with global market research firm Mintel, a recent report released by Base Beauty Creative Agency sheds light on how Millennial and Gen Z consumers are reshaping the beauty and personal care industry with their aspiration-driven purchase behavior. The report titled "Chasing Rich" delves into how these younger consumers' beauty purchases reflect their taste and the values and lifestyles to which they aspire – sometimes at a high personal cost.
Rachel Howard, Director of Owned Media at Base Beauty Creative Agency, shared the report's key takeaways and timely insights into attracting and retaining these consumers as the 2024 holiday shopping season is underway.
Understanding aspiration-driven consumer segments
The report categorizes aspiration-driven consumers into distinct groups based on how they view and prioritize wealth in their purchasing decisions: "Being Rich," "Playing Rich" and "Living Rich (but in Debt)." According to Howard, these categories reveal distinct behaviors and motivations among Millennial and Gen Z consumers that can inform targeted marketing approaches.
"Being Rich"
Consumers with wealth tend to seek high-end, luxury brands, viewing quality, exclusivity and premium experiences as essential. "This group often gravitates towards well-established brands known for their legacy and superior results," Howard noted.
Social media, mainly through celebrity endorsements and partnerships, has made luxury lifestyles more accessible to aspirational consumers. Figures like Gwyneth Paltrow have tapped into this trend by expanding into consumer products, such as her goop line and partnerships with brands like Ruggable.
Importantly, for beauty brands, 65% of U.S. consumers believe that luxury products and services impress others, highlighting the power of premium positioning.
"Playing Rich"
These consumers live within their means but selectively purchase items that help project an elevated lifestyle, often using resale platforms and "dupes" to access the look and feel of luxury at a lower price. A key data point from the report shows that 64% of Gen Z and 67% of Millennials use product dupes to save money, and one-third of beauty shoppers bought makeup dupes seen on social media.
"For those 'playing rich,' beauty purchases are about maintaining a high-end look within a budget, often relying on select items that allow them to show up as if they have greater financial freedom," Howard explained. This insight can be crucial for brands considering the potential of affordable luxury lines or exclusive collaborations that deliver high-end aesthetics without the high-end price tag.
"Living Rich (but in Debt)"
Some consumers are willing to go into debt to pursue luxury experiences, a behavior often seen in the ‘girl math’ trend popularized on social media. According to the report, 35% of Millennials go into debt for experiences, while 33% of beauty shoppers regret overspending on beauty.
This figure is even higher for Gen Z, with 52% expressing regret over beauty expenditures. In response, Howard recommended that brands promote the value and longevity of products: "Focusing on the quality and multi-use potential of beauty products can help consumers justify these aspirational purchases as smart investments."
Social media and influencer impact on purchase decisions
With 48% of Gen Z shoppers and 59% of Millennials making purchases based on influencer recommendations, influencers significantly drive aspiration-based purchasing. Social media platforms like Instagram and TikTok have democratized access to luxury by showcasing premium products in ways that feel both attainable and relatable.
"Influencers bring luxury within reach by pairing high-end products with affordable alternatives," Howard noted, pointing out that influencers often help followers recreate luxury looks on a budget. This trend is reinforced by data showing that 59% of Millennials are more likely to buy products sponsored by content creators.
For brands, authentic influencer partnerships offer a powerful channel to reach these audiences. By collaborating with a diverse range of influencers, including micro and mid-tier creators who share personal experiences with the products, brands can maintain an aspirational yet relatable image.
"Encouraging influencers to showcase how they integrate products into their daily routines highlights practicality while reinforcing the brand's high standards," Howard said, suggesting that influencer collaborations based on authentic storytelling resonate strongly with these consumers.
Responding to the demand for financially mindful choices
As consumer debt and financial literacy become more relevant issues, especially among "Planning Rich" Zillennials focused on long-term wealth-building, brands can benefit from promoting products that reflect smart spending. The report indicated that 42% of consumers actively seek less expensive alternatives to high-end products, reflecting a growing focus on value and practicality.
For brands, transparency in product value and benefits and messaging around durability and functionality can help win over these financially savvy consumers. "Highlighting multi-use functionality and educational content on building a versatile beauty routine can resonate with Zillennials," Howard advised, noting that trust-building through clear, honest communication will likely cultivate brand loyalty in this group.
Implications for beauty brands: Building trust through authenticity and value
As Millennial and Gen Z consumers continue redefining aspiration-driven purchasing, Howard explained that beauty brands that prioritize authenticity, transparency, and value are best positioned to meet their evolving expectations.
She emphasized that brands need to connect with these younger consumers by "focusing on transparency, quality and value." By offering smaller sizes, promoting multi-use functionality, and communicating product benefits, brands can help consumers feel confident in their purchases, she said
She recommends beauty brands think beyond selling a product and instead create communities that reflect shared values around social responsibility, financial mindfulness, and inclusivity. "The most successful beauty brands today aren't just selling a product; they're cultivating a community that reflects and supports their consumers' evolving values," Howard concluded.
