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How Beauty Brands Are Incentivizing Loyalty Among Gen Z

Alternative payment company Catch incentivizes customer loyalty through its tangible dollar rewards.

How Beauty Brands Are Incentivizing Loyalty Among Gen Z

Nico Perdomo, chief executive officer of Catch, chats about how to get customers to make a second purchase.

Nico Perdomo, chief executive officer of Catch, sat down with Jenny B. Fine, editor in chief of Beauty Inc, to discuss how beauty brands are rethinking loyalty strategies. 

Coming from Affirm, Perdomo is a veteran in the buy now, pay later payments space and started his company during the pandemic in 2021. Catch, an alternative payment company, is integrated into a brand’s direct-to-consumer website to help cut out credit card processing fees. Catch gives tangible dollar rewards to consumers when they use their direct bank accounts or debit cards, which helps incentivize loyalty and repeat return customers. 

Capturing the attention of hundreds of thousands of younger consumers, Catch works with household names in beauty and retail space, such as PacSun, Living Proof, Saie, Rare Beauty, Kosas, SoulCycle, West Elm, Ouai, Summer Fridays and Nest New York.

The company’s data shows younger shoppers do have brand loyalty — but there’s a catch. “Young shoppers are incredibly savvy, and they want to be loyal but it’s difficult,” he said. “They want some of the same things that other generations have had. Many founders have talked about how they’ve put their DNA into the product and that’s what customers want.”

Perdomo said that brands need to be more innovative in their marketing, on the storytelling side and novelty. He cited E.l.f. as a leader in garnering consumer loyalty for Generation Z and Gen Alpha by jumping on new social platforms, forging buzzy collaborations, creating must-see Super Bowl ads and more. 

Citing the recent news of Glossier’s partnership with former college basketball star and WNBA first draft pick Caitlin Clark, Perdomo sees the intersection of women’s sports becoming an important driver within the beauty category — as they become sponsors and athletes start their brands.  

How Beauty Brands Are Incentivizing Loyalty Among Gen Z

“Value is about getting an amazing product and feeling like you’re getting a good deal getting it,” Perdomo said. “It’s about getting the customer to feel savvy and smart. Our thesis behind Catch is that everyone buying a product has to pay. Why don’t we make that moment extremely delightful and give that customer something back right when they pay? That makes them feel like they’re getting more value to come back and keep shopping.”

Looking at consumer behavior sentiment and forecasting what the year will bring, Perdomo said the year is tricky given geopolitical issues, the upcoming 2024 presidential election and inflation. While beauty has been one of the more resilient categories coming out of the pandemic, he forecast beauty might weaken this year with expected consolidation in the industry.  

However, Perdomo sees these changes as “an opportunity for the best brands in the space to build businesses. Brands that think about an omnichannel strategy like Sephora or Amazon, direct-to-consumer channels will be the ones who win,” he said.

Tags

  • beauty
  • buy now, pay later
  • Consumer Behavior
  • Generation Z
  • retail

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