Generation Z are the unlikely saviours of physical retail

Interestingly and conversely to what was previously anticipated, recent research shows that Generation Z is spending more time in physical stores than any other consumers today.

According to Bloomberg, around 95% of them visited a physical shopping centre in a three-month period in 2018, as opposed to just 75% of millennials and 58% of Gen X. Also among the researchers was The Grocer, which undertook a major pan-European study that targeted 50,000 adults across 11 countries. What was revealed, was that nearly 22% of Gen Z (aged 18-24) do their research and purchasing in-store, compared to the milennials (people aged 25-34) who came in at just 14%.

In light of the Covid-19 pandemic further bolstering online shopping, the convenience of which already being long accepted; why would this group seek to congregate in shopping centres and on high streets? We strongly believe that it is the need for social interaction that is driving this. Think back to the typical “all American” teen movies and inevitably, the social setting for public interactions was “the mall”. However, back then a few fashion retailers and a fast food outlet or two sufficed in keeping the typical teen entertained, but not anymore.

The Generation Z shopper wants an experience that offers ease of use, entertainment, flexibility and immediacy; in other words, much the same as if they are having an online interaction and it is up to the brands to create environments that support this. It is all about breaking the mould, bringing down the barriers, using a lot of imagination and not being afraid of trying new things. In short, there is a need to facilitate the opportunities that create memorable moments and experiences for the Generation Z consumers, which when successful will make them the ultimate brand advocates.

A panel discussion about the future of shopping centres discussed this in detail at the RetailExpo in London. On the panel was Kathryn Malloch Head of Customer Experience at Hammerson, who summed it up by stating, “They must be entertainment venues and not just about shopping.”

Sue Shepherd, General Manager of London Designer Outlet in Wembley, part of the biggest urban regeneration project in the EU agreed. “More than ever, shoppers want an experience, rather than just the option to purchase.”

There is no doubt that retail landlords need to be supporting this and looking at the use of space, to allow for the diversification of the experience. As Kathryn explains, “Traditional anchors are moving. People are coming more for a day out and we need to look at the mix of leisure and retail.” She also went on to explain that there is an opportunity to repurpose redundant department store space, in order to facilitate this growing demand for a variety of experiences. “ People want to do more, rather than buy more,” she added.
A strong example of this is Birmingham’s Bullring, where the mix is constantly changing and evolving. Kathryn explained that there is a strong drive to support local brands, that is involving a move away from the mass market, into something different. This is being bolstered by offering less long-term and more short-term rents, an increase in pop-ups and space for independents, supporting the all-important appeal of localisation.

There are other things that shopping centres and high street retailers can do to attract the Generation Z demographic; events being one of them. Interactive digital displays, increased VR, light shows and artist and celebrity experiences go a long way in increasing the all important dwell time. If the shopping area is located where events happen anyway, then finding ways of making the customer experience easy and effortless, go a long way to increase loyalty.

Sue Shepherd explains. “In Wembley, there are events happening frequently anyway and our focus is more on the overall guest experience.” The solution was to launch a digital experience called “drop it”, which allows customers to leave shopping in the stores, which a concierge collects and arranges to have delivered to their homes. It is all about identifying “pain points” and responding to them.

Research plays a key part in discovering what drives influencers and spend. As previously mentioned, although this generation prefers physical retail, they still want the convenience of the online experience. Developing street style apps, offering click and collect and free delivery and using analytics, will all help to deliver this. Ibeacon and tracking technology allow the affinities between brands, based on consumer behaviour to be analysed, creating better zones and shopper journeys. The relevance and tailored communications that can be offered back to customers as a result of this, via for instance Geolocation software, cannot be underestimated.

In the shopping centres and high streets of the future, we are more likely to see an increase in curating consumer lifestyles. These may well include bespoke offerings such as supper clubs, sushi masterclasses and exclusive events and rewards for local residents only. We are also likely to see an amalgamation of areas, to include mixed-use developments more co-working spaces and possibly even medical and educational environments.

In conclusion, they will become giant “Ecosystems” that facilitate a lifestyle and answer a need. There will be a frictionless experience across brands. They will be very high-tech, but there will always be a place for good service, personalisation, and engagement.

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