Findings
The data comprised of 68.3% female, and 31.7% male in generation Y and 72.8%
female and 27.2% male in generation Z dataset. Generation Z sample presents a slightly higher percentage of females than generation Y. Additionally, on average, generation Y spends more on cosmetics on a monthly basis than generation Z. Statistically, average monthly expense of generation Y is 1495.12 NTD whether for generation Z is 1166.67 NTD. This could be explained on the age life-cycle difference of both generations. It is deducted that generation Z comprises of a younger sample and this can also affect their buying power. Consequently, generation Y consisted of 40.2% students whether 82.7%
of the generation Z participants were students. The rest of the participants were employed in different professions such as management, sales, marketing, service industry, education institutions and arts. Additionally, 86.6% of gen Y sample, resident in Taiwan, were of Taiwanese origin. In gen Z sample, 93.8% are of Taiwanese origins.
Other nationalities included participants from Ukraine, Albania, Norway, Malaysia, German, Austria, Australia, Vietnam, Hong-Kong, China, Ecuador, Thailand and the UK.
According to conducted descriptive statistics, there are slight differences between the generations on the use of product categories percentages. 95.12% of generation Y participants use skin care products, 93.9% use hair care products, 37.8% use shaving products, 71.95% make-up products, 29.27% deodorants, 29.27% toilet soaps, and 30.49% of intimate hygiene, 68.29% lip balms, 54.88% sunbathing and 13.41% tanning products. 37.8% uses nail – care products.
Among generation Z participants, 92.11% use skin care products, 94.74% use hair care products, 27.63% use shaving products, 73.68% make-up products, 27.63%
deodorants, 14.47% toilet soaps, 22.37% intimate hygiene products, 75% lip balms, 39.47% nail-care products, 72.37%, sunbathing and 10.53% tanning products.
When identifying media channels, the participants use the most regarding cosmetics, the following statistics were concluded. According to the analysis of the Generation Y dataset, 75.6% of people find out about new cosmetic products through social media, 41.5% through TV, 25.6%, through magazines, 48.8% through street advertisement, 42.7% through mobile ads, and 57.3% through promotional events.
According to the analysis of the Generation Z dataset, 86.4% of people find out about new cosmetic products through social media, 48.1% through TV, 25.9%, through magazines, 43.2% through street advertisement, 60.5% through mobile ads, and 71.6%
through promotional events. Based on this data, generation Z is more responsive to social media, TV advertisement, mobile ads and promotional events than generation Y.
Furthermore, both generations have a similar response towards magazines and finally generation Y seems to be more responsive to street advertisement.
After conducting a factor analysis on both segment groups, generation Z loaded four factors and generation Y three. From the analysis the following factors were derived for Gen Y: “Knowledge on cosmetics”, “Social media impact” and “Environmental consciousness” and “Knowledge on cosmetics”, “Attitude towards advertisement”,
“Social media impact” and “Environmental consciousness” for Gen Z. based on these results, it can be deducted that generation Z seems to be more sensitive to advertisement compared to generation Y. Furthermore, deeper observations are made into the variables that define these factors.
The following statements defined “knowledge on cosmetics” for both generations accordingly:
Table 4.1.
Factor 1 – “Knowledge on cosmetics”
Generation Y Generation Z
I like to talk to my friends about
It is important to me to know the latest
cosmetic products. I am more careful when choosing cosmetic products than other people.
I am willing to spend money on expensive cosmetic products.
I always look at the online reviews when buying a cosmetic product.
I am more careful when choosing cosmetic products than other people.
I google a cosmetic product online before buying it in store.
I google a cosmetic product online before buying it in store.
It is observed that the statements composing this factor are all of the same nature.
Although the statements are not identical for each generation, they present the consumer behaviour and their characteristics towards cosmetic products and their weight in their personal lifestyles. Both generations are affected by the prior information they have before making a purchase, hence the topic is present in their daily lives. On a psychological point of view, this is of course related to a heavy usage of cosmetics or not and online means, such as reviews or information. Additionally, it can be found that heavy usage of cosmetics is related in Gen Y together with willingness to spend more on products and to always be up to date, but for Gen Z it is important to use online resources of information about their preferred purchases, like reviews and evaluations from peers or experts, and their willingness to spend does not seem to be a correlated defining variable.
Table 4.2.
Factor 2 – “Social media impact”
Generation Y Generation Z
Social media affects my decision when purchasing cosmetic products.
Social media helps me choose cosmetic products.
Social media helps me choose cosmetic products.
Social media affects my decision when purchasing cosmetic products.
The social media peer pressure to look good affects my purchasing decision.
The social media peer pressure to look good affects my purchasing decision.
I purchase cosmetic products because I have seen them in online tutorials.
The second factor loaded is “Social media impact” for both generations. It is no surprise to derive this factor given that generation Y is very digital savvy and generation Z being a digital native. This factor is defined by the same statements, except that for Gen Y it seems that online tutorials are correlated to social media whereas for generation Z this is not a defining variable. Both generations are affected by social media platforms and trends that they create which then translate into a social peer pressure for the participants.
Table 4.3.
Factor 3 – “Environmental consciousness”
Generation Y Generation Z
I would rather purchase natural cosmetics than non-natural ones.
I would rather purchase natural cosmetics than non-natural ones.
I purchase cosmetic brands that care about the environment and animals.
I purchase cosmetic brands that care about the environment and animals.
I purchase cosmetic products that have a nice design.
I like to try/test cosmetic products before I buy them.
Both generations have loaded a factor related to their environmental consciousness. This trend affecting the cosmetics industry, as also mentioned before in this thesis is seen to be significant in the generations behaviour. However, comparingly, generation Z correlated environment friendly & natural cosmetics with their design, whereas generation Z correlated testing a product beforehand, for instance by using samples, to estimate their preference towards an environment friendly cosmetic.
Table 4.4.
Factor 4 – “Attitude towards advertisements”
Generation Z I like to see ads about cosmetic products.
I like cosmetic advertisements with a foreign celebrity.
I like cosmetic advertisements with an Asian celebrity.
I am willing to spend money on expensive cosmetic products.
Finally, it is observed that generation Z loaded one additional factor compared to generation Y. their preferences towards ads are significant for this generation, whether they involve international or local celebrities. The willingness to spend money is correlated to advertisements for generation Z, whereas for Y it is correlated to their knowledge on cosmetic products.
Cluster analysis was further applied to both datasets. Each generation is further grouped into three clusters. The statements significant to define these clusters were slightly different in each generation according to their respective ANOVA Table results also mentioned in the previous chapter. Taking a deeper look into the “homogenous subsets” which are derived from performing a one - way ANOVA analysis based on the
initial cluster analysis results, it was discovered that the clusters of gen Y can be identified according to level of cosmetics usage; namely “heavy users” for cluster 1 (N=35), “medium users” for cluster 3 (N=36) and “low users” for cluster 2 (N=11).
Furthermore, statements where clusters differ the most are willingness to spend money on expensive cosmetics, searching for information on a product online before making a purchase, influenced purchases from online tutorials, talking to friends about cosmetics, importance of knowing the latest cosmetic products, amount of carefulness in choosing cosmetic products compared to others and liking advertisements with an Asian celebrity.
Evidently, heavy users are more willing to buy expensive cosmetics, actively search for information online, be up to date with the latest trends, follow tutorials and overall investing more time and effort into their purchases. It is further self-explanatory that medium users spend less efforts and low users don’t consider these lifestyle choices at all. Furthermore, heavy and medium users result to be highly affected by social media, pay attention to products attributes, ingredients and their design.
When observing “homogeneous subsets” for generation Z, the results are different from generation Y. The only statement clearly placing a difference from the 3 clusters is “I am more careful when choosing cosmetic products then other people.”. This is further considered to identify the clusters accordingly in “high cautiousness” for cluster 2 (N=45), “medium cautiousness” for cluster 3 (N=30) and “low cautiousness” for cluster 1 (N=6). It is further observed that level of cosmetic usage does not define preferences for products in generation Z. There is a clear difference from low cautious users to medium and high ones regarding the influence social media has on their purchases, searching for information on a product online and reliance on peer reviews, paying attention to product ingredients, talking to their friends about cosmetics and relying on cosmetic products to look good.
After analysing differences between clusters in each generation, further observations are made focusing on their homogeneity towards the provided statements, meaning assessing preferences and attitudes where all clusters behave the same for each generation. All clusters assessed in both generations have an equal proportion of females and males in each cluster composition. This fact eliminates the possibility that cluster differences are attributed to gender. All clusters in generation Y agree that they purchase cosmetics based on price, but they disagree on purchasing only cosmetics that are on
sale. They all have a neutral opinion when it comes to choosing international or Asian brands. They all agree that a products smell is considered when making a purchase and that they prefer natural cosmetics over non-natural ones. Lastly, gen Y has an averagely neutral preference towards cosmetics that care about the environment and animals.
On the other hand, all clusters in generation Z also agree that they purchase cosmetics based on price and disagree that their decision is based exclusively on sales. They disagree that they purchase a product because of their advertisement. Instead their decision is highly dependent on recommendations from peers. Additionally, purchasing a product in store is more preferable then online. In regard to environmental consciousness, gen Z agrees that they prefer natural cosmetics and that care about the environment. They react positively to cosmetics that have no side effects and have a pleasant smell. Finally, they state that they only purchase the essential cosmetic products and like to receive product samples.
Discussion
This research was focused on the shopping behaviour of Generation Y and Generation Z. The main objective was to demonstrate the specifics of both Generation Y and Generation Z general behaviour associated with the mode of advertisement and evaluate the specifics of shopping behaviour regarding the perception of cosmetic products.
According to the findings of the conducted analysis, generation Y has a higher average monthly expense on cosmetics in comparison to generation Z. this result could be explained on the fact that generation Y is currently in a younger lifecycle phase. In fact, Gen Z has twice the number of students than Gen Y. Understandably, they have less monthly income to spend. When it comes to product categories used, both generations resulted in close percentages with each other for each category provided in the survey.
This emphasises on the presence of cosmetic products and their importance in overall every individual’s lifestyle, no matter to which group they belong to. Noticeably, the most used categories were skin care, hair care, makeup, lip balms and sun protecting products which fulfil the need for basic hygiene and self-care considering the high weather temperatures in Taiwan. Both generations have a close distribution of males and females, with generation Y having slightly more female participants, therefore gender is not considered to be a defining variable. Use of deodorants was particularly not high and it is assumed to be related to cultural reasons. When it comes to advertisement channels, generation Z finds out about new products through social
media, TV, mobile ads and promotional events in higher percentages than generation Y.
As mentioned as well in this paper’s literature review, the study confirms that as digital natives gen Z spends more time in the virtual world and watch more TV. However, even though they lean towards digital media more, generation Z is also more affected by promotional events where they can engage with the brand. On the other hand, advertisement channels like street billboards and posters resulted to be more efficient for generation Y. Furthermore, from a widened perspective, the most influential channel is social media for both generations, with promotional events coming second. The emphasis of advertisement channel efficiency is evidently held by the importance and presence of social media in people’s everyday life. Additionally, because most of the interactions with a brand are experienced in the virtual world, promotional events also have a high impact for customers to feel connected to the brand on a more personal level.
Results from the factor analysis differentiate both generations on the factors loaded for each sample group. Generation Z loaded one more factor then generation Y, that being the “Attitude towards advertisements”. The factors “Knowledge on cosmetics”
had defining variables of a similar nature for both generations. In “Social media impact”
it is observed that generation Y correlated online tutorials with social media, while generation Z does not. Finally, the factor “Environmental consciousness” is presents two interesting remarks; generation Y relates natural and environmentally friendly cosmetics with a nice label design, but generation Z relates them with testing a product before purchasing. Thus, it can be argued that both generations have different perceptions on these types of products.
Findings from the cluster analysis lead us to place the majority of generation Y sample into heavy and medium users, where approximately 87% of the subjects studied fall into these clusters. The same pattern was observed for generation Z where 92% of the participants fall into the clusters defined by high and medium cautiousness when choosing cosmetic products. Even though users belonging to generation Z are not heavy users of cosmetics and the majority purchases only the essential cosmetics, they still perform high due diligence before a purchase using online means. This fact highlights the consciousness generation Z has about products they use, no matter if they are heavy or low users. On the other hand, generation Y presented a clear difference in buying
generation’s attitude can be clearly identified on the amount of effort and time they invest into a purchase. For instance, low users do not use online information means to evaluate their purchase decisions and vice-versa. Because of the vast information available on products nowadays, consumers are more aware in their decisions-making process. Variables such as price incentives do not have a strong influence on purchasing decisions for both generations. Generation Y results to be conscious about natural cosmetics but the fact that a cosmetic is environmentally friendly or not has a neutral impact on them. On the other hand, generation Z results to be more affected by these two variables, through which they state that they prefer both natural and environment friendly products. The awareness generated by media in the past years about environment issues and chemicals applied to the body, is evidently having an influence on the buying behaviour of younger consumers, which are soon to be a substantial targeting market for companies.
The research findings are valuable for cosmetic company managers to use as a resource in better targeting generation Y and Z in their marketing activities. Results regarding the most efficient advertising channels and attitude or buying behaviour of these generations in Taiwan for cosmetics, give deeper insights on the most efficient ways to target the studied groups. It is of interest to know the fact that for instance generation Z has a high response to social media channels but also to promotional events where they get a more personal interaction with the brand. It is no surprise that as digital natives, social media channels result to be important for this group, however on the other hand it is also discovered that personalization in their touchpoints with the band, is also substantial for this group. Similar deductions can be assessed by managers on other aspects of this study as well, such as their sensitivity towards natural cosmetics or the amount of information they want to have prior to a purchase. Additionally, the fact that the clustering of the two generations is conducted based on different attitudes, usage frequency for generation Y and carefulness of choosing a cosmetic product for generation Z, demonstrates the importance of targeting these generations with different strategies. The attitudinal findings of both generations can be used as a tool to better strategize on acquiring new customers belonging to generation Y or Z and to develop accurate strategies on nurturing the existing ones.
Finally, a point of discussion is also the high exposure to subjectivity when conducting these types of segmentation analyses. It is understandable that for instance clustering is prone to high subjectivity and extensive possibilities of interpreting the data (Hoek, Gendall, & Esslemont, 1996). Nevertheless, the reliability of the segments discovered can be restored when the results are proved to be robust.