Far From the Apocalypse: How Malls Can Survive Destruction Thanks to Gen Z Shoppers
It’s been said that millennials have a way of killing industries. At this point, the list of casualties includes fast-food, mayo, napkins and, of course, shopping malls. And, while millenial’s younger counterparts, Gen Z (born between 97’ and 03’) also chalked-up several of their own casualties (beer potentially being one of them), Gen Z might just prove to be the generation that saves the shopping mall.
Why Gen Z?
When it comes to shopping at brick-and-mortar locations, Gen Z loves the experience. One study estimates that about 95% of Gen Z’s members stopped in at a physical retail space at least once within a three month period compared to 75% of Millennials and an even lower 58% of Gen X. The study also found that 75% of Gen Z admitted they preferred the experience of shopping at brick-and-mortar locations as opposed to shopping online. And, in one study by Criteo, 80% of Gen Zers admitted they eagerly await the chance to visit a shopping mall in their freetime.
Where’s the Love?
For Gen Z, the love of shopping malls stems from the generation’s general (yet scattered) approach towards the path-to-purchase. Unlike millennials, who largely prefer to discover and buy products through one-stop-shop e-commerce sites like Amazon and Google, Gen Z shoppers often purchase across multiple websites in search of deals, discounts, and unique looks. Gen Z often prefers to discover and interact with brands through social media before heading to the store to browse and investigate brands further in person.
In Essence, Gen Z Prefers to Browse
For many members of Gen Z, the experience of browsing is an experience worth having. And, that’s exactly what shopping malls allow for. In essence, a mall acts as a giant real-life browser only better because it also offers fully formulated looks, curated designs, and tangible products to interact with physically.
Here’s what retailers are doing to fit Gen Z’s habits
To reach Gen Z, which will have $143 billion in spending power by 2020, brick-and-mortar retailers are crafting retail experiences that fit Gen Z’s shopping preferences. That means embracing in-store smartphone use, creating more enjoyable in-store experiences, and allowing customers to personalize products and shopping experiences in-store to fit their own unique styles.
Start w/ Tech Use
Given the wide-adoption of smartphones among Gen Z — the first generation considered “truly digitally-native” — retailers are already finding success by integrating smartphone use with the in-store experience.
Forever 21, for example, offers 21% in-store discounts to customers willing to post a picture of themselves wearing the brand’s clothes along with the hashtag “#F21PROMO.” So far, the hashtag accounted for 20,000 different photos of customers featuring Forever 21’s clothes. Essentially, that’s 20,000 micro-influencers leveraging an in-store experience to advertise to their peers in the digital space.
Build w/ Elevated In-Store Experience
Supporting smartphone use encourages customers from Gen Z to not only share but to also experience a store the way they want to; however, brick-and-mortar retailers can amplify the in-store experience even more by altering the physical space to make it more entertaining for the customer.
In order to bring entertainment to the shopping experience, Macy’s recently renovated 36 of its stores to include more interactable spaces. These store-within a store spaces, termed “Story,” include bright colors and ping-pong tables along with engaging displays featuring unique novelty items like books to cure hangovers and purses that recharge phones.
In reference to these Story items, Macy’s CEO, Jeff Gennette, stated that Story products are goods that “nobody needs’’ but that people are “going to want’’ after interacting with them in these unique spaces.
To keep things fresh and vibrant (and to keep customers returning for a new in-store experience), Macy’s completely renovates Story spaces every two months. For Gen Zers with a habit of visiting brick-and-mortar retailers at least once every three months, a store renovation every two months provides just another reason to swing into the mall to see what new experience awaits them.
Personalize for the Win
According to a 2018 report from the National Retail Federation and IBM, almost half of Gen Z customers demand products tailored to their preferences. Individual interests, styles, forms of expression, and tastes all come into play here.
And, as a long time innovator in allowing customers to modify products, Nike brings product customization, digital technology, and interactive experiences under one (physical) roof with its NYC flagship store, the House of Innovation.
The House of Innovation allows shoppers to customize individual products in-store and uses the Nike app and smartphone tech to give shoppers access to more info and customer support. The whole store itself is an experience, not just a place to browse endless aisles of shoes.
So, How Can Physical Retailers Entice Gen Z?
- Promote, rather than fight, the use of smartphones among customers in order to enhance the in-store shopping experience.
- Embrace discovery as a unique and valuable component of the brick-and-mortar shopping experience.
- Provide options that allow Gen Z to customize, mix, match, and personalize products and in-store experiences to fit their individual shopping needs and forms of expression. One-size-fits-all approach won’t work here. Uplift the individual.
Want to learn more? Feel free to reach out at any time. We would love to chat!
The above piece was written by Connor Beck in collaboration with Carter Jensen and the Latitude research team.
Resources and original reporting of the above points covered by the following publications — Marketing Dive, Bloomberg Businessweek, National Retail Federation, IBM, Latitude, & ICSC
More about Latitude
At Latitude, we love taking incredible brands of all sizes and elevating them through tech-fueled experiences that add true value. From pop-up retail to permanent build-outs, our team brings brand stories and modern-day commerce together to truly stand out. Want to learn more? See our case studies. Give us a shout.
Additional Resources
Want to learn more? Our 2019 retail report is now available and includes a long list of case studies and insights from Shopify, Dollar Shave Club, and much more.
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