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Gen Z: What do they look for in personal care

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Enrico Frezza, Peace Out Skincare Founder, joined Yahoo Finance to discuss how his company is cartering to Gen Z.

Video Transcript

BRIAN CHEUNG: All right, well, switching gears, people are trying to take better care of their skin during this pandemic. Piper Sandler's teen survey saying that skin care spent for teen girls was $107 a year. That's 6% up year over year, and what's more interesting is the trend of teens not wearing makeup as frequently.

In the skin care space, it seems like the top brands were CeraVe and Cetaphil. I'm actually a Cetaphil guy myself. Dudes can use this too. But for more on this trend around skin care, let's bring in Enrico Frezza. He is the founder of Peace Out Skincare.

Obviously you've been following this space very closely during the course of this pandemic. Tell us a little bit more about whether or not that's a zero sum gain. Are people caring more about their skin because they don't have to be wearing as much makeup, and how do you guys fit into that ecosystem?

ENRICO FREZZA: Well, thank you for having me. I think a lot of people are spending in quarantine more time in front of the mirror than they probably ever did before. So that made them more focused on taking care of their skin and also wearing less makeup.

But at the same time, a lot of people had to do with being on Zoom, which I think shows even more skin imperfections or much more closely your skin concerns on camera. So I think that kind of drove that.

And also having more time on your hands to take of your skin and have a routine. It's a healthy habit, and I think he helped people going through quarantine a lot easier as self-improvement and self care.

SEANA SMITH: Enrico, taking a look at the trends that you saw, last year, obviously, no surprise that you saw a massive jump in e-commerce sales in 2020. Are you shifting your strategy going forward at all as a result of that?

ENRICO FREZZA: Well, I think at the beginning the pandemic, it kind of gave us some time to sit down. When we originally were planning to get on TikTok, we didn't have the time. But when the pandemic started and we had nothing to do but time and sit at home, we really strategized on jumping on TikTok.

And relooking at our advertising that we're doing, and we were doing a lot of beautiful lifestyle shots. And that type of content was not working anymore, especially for Gen Z. We kind of revamped our entire marketing in last year, and we keep adapting it this year.

So it's much more mobile focused, SMS. 82% of our sales are coming from mobile, and we had a 600% e-commerce sales growth last year. And we're seeing the same trend through this year, so it's definitely been a great challenge and change for our business.

BRIAN CHEUNG: But at the same time, what's interesting is that Sephora revenue, I believe, it grew 77% in 2020. So people still are using those types of big legacy names, whether or not that's brick and mortar or online.

A lot of your products are geared towards taking care of acne, so that would be more younger people, teens, Gen Zers. So knowing those things, how do you ultimately try to push your marketing strategy?

ENRICO FREZZA: Well, the brand was founded because of my struggle with acne, and, when I was a teenager, I didn't have the support system or really the education around acne. Nobody would really talk about it, and we wanted to bring acne positivity from the beginning. So the brand was founded upon that.

And now, especially in social media, when there is the perception of perfection and Photoshop and perfect skin, which is such an unrealistic image of what beauty should be, of what is beautiful, which is untrue because acne's beautiful and skin imperfections are beautiful. It makes you beautiful. So we wanted to re-embrace them. And Acne Champs, which is the most recent acne company to align this, it's what we're doing to say, we're the acne champions. It's to champ your own skin and champ your skin imperfection and champ your acne.

SEANA SMITH: Enrico, talking about the power of the Gen Z market right now, 60% of Gen Z, Gen Zers I guess is what they're called, by skin care before the age of 16, how does this compare to what you saw, say, from millennials, the generation before?

ENRICO FREZZA: Well, good question. Gen Z is one third of our customers, and it's becoming quickly the majority of our consumers. They have a $44 billion power, so it's definitely a very large consumer.

Millennials were more already versed to spend time on mobile and online, but I don't think any other generation is like Gen Z. It's so mobile native and digitally native that they're glued to their phones.

And I think also the way that they embrace brands and that very specific expectation. And that transparency, communities, strong ethos. All those things have to be together in order to attract a Generation Z consumer.

And once you are able to attract it, it's easier for you to maintain it once you create a relationship with them. Versus a millennial, it was harder to add that as a returning customer in a way, if that makes sense.

SEANA SMITH: And, Enrico, going off that massive growth that you felt in your business last year, what are your plans look like just in scaling your brand and then expanding your line of product?

ENRICO FREZZA: So right now, we are in Sephora US. We have 420 doors. We launched in Sephora at Canada last July. We were 100 doors. We have now 950 doors in Sephora Europe, and we launched with Sephora Australia and New Zealand last year.

And this year, we're looking to keep a global expansion. We're launching with Boots, Cole Beauty, and Flannels in the UK. We're launching Sephora Southeast Asia, and we're expanding our footprint, of course, in the US in terms of stores. We're also launching with Sephora Kohl's, which is a partnership that we're really excited about.

And in product pipeline, so this year, it's a really strong focus on acne. We really want to dominate the prestige acne beauty, which, right now, we're the number one acne brand is Sephora. But we really want to dominate the acne [INAUDIBLE] in Sephora and outside of Sephora in the prestige market.

SEANA SMITH: Enrico, great to have you on the show. You're Enrico Frezza, Peace Out Skincare founder. Thanks so much for joining us.