In today's digital age, where online shopping has become increasingly popular, shopping malls have struggled to maintain their relevance. However, a glimmer of hope is on the horizon, thanks to the emergence of Generation Z (Gen Z) as a powerful consumer force. Gen Z, born between 1995 and 2015, is breathing new life into shopping malls and reshaping the future of retail.
Gen Z, typically defined as those born between 1997 and 2012, is rapidly becoming an influential demographic in the global economy. As digital natives, they have grown up with technology at their fingertips, which has shaped their shopping behaviors and expectations. Gen Z's comfort with technology and social media has made them key influencers in the retail space. This article will explore 10 ways this young generation is transforming the in-store shopping experience.
1. In-Person Shopping Experience
Contrary to popular belief, Gen Z is not abandoning physical stores in favor of online shopping. In fact, a staggering 81% of Gen Z consumers prefer to shop in-store, according to a survey by the International Council of Shopping Centers (ICSC). Several factors drive this preference for in-person shopping. For one, Gen Z values the opportunity to discover new products while browsing in-store. They appreciate the tactile experience of seeing, touching, and trying out products before purchasing. Additionally, shopping in-store allows Gen Z to disconnect from the digital world and engage in a social and interactive experience.
2. The Influence of Social Media on Purchasing Habits
According to the ICSC survey, 85% of Gen Z consumers stated that social media influences their buying choices. Platforms such as TikTok and Instagram are particularly influential, with 45% of Gen Z respondents naming them as the top platforms influencing their purchasing decisions. These platforms provide a curated shopping experience tailored to Gen Z's tastes, showcasing fashion, decor, and gifting ideas. Influencers and brands using social media effectively can capture the attention of Gen Z shoppers and drive them to physical stores.
For example, a cosmetics brand could launch a campaign on TikTok where they collaborate with popular beauty influencers to create unique makeup challenge hashtags. These influencers would showcase the brand's products by participating in the challenge, encouraging their followers to do the same. The viral nature of the challenge could lead to increased brand visibility and drive Gen Z consumers to both the brand's online store and physical retail locations to purchase the featured products. The brand could use Instagram to highlight user-generated content, where customers post their own looks using the brand's makeup.
3. The Rise of Experiential Retail
Gen Z's desire for experiences over material possessions is reshaping the concept of shopping malls. Malls are no longer just places to shop; they have become destinations for socializing, dining, and entertainment. To cater to Gen Z's preferences, malls are incorporating elements such as amusement parks, movie theaters, and interactive art installations. This transformation aims to create a sense of community and bridge the gap between the digital and physical worlds.
For example, a shopping mall in California might partner with local artists to create an interactive art gallery where visitors can view and participate in creating art. This space could host workshops, live performances, and social media-friendly installations encouraging visitors to share their experiences online.
Additionally, the mall could introduce a high-tech gaming zone equipped with virtual reality (VR) stations, esports arenas, and classic arcade games to attract Gen Z gamers and their families. By offering a variety of dining options, from trendy food trucks to farm-to-table restaurants, the mall would provide a complete experiential visit that goes beyond traditional retail shopping. Such a mall could become a hub for community events, pop-up shops featuring local and sustainable brands, and spaces for co-working and collaboration, appealing to Gen Z's preferences.
4. Gen Z's Impact on the Economy
With their significant buying power, Gen Z is a force to be reckoned with in the retail industry. Their spending is estimated at approximately $143 billion per year, and they influence an additional $450.5 billion in spending by others, according to CBRE research. Retailers who can capture the attention and loyalty of Gen Z stand to benefit from this lucrative market.
Their influence is also seen in the rise of the "experience economy," as Gen Z consumers often prefer spending money on experiences rather than on physical goods. This has led to experiential retail concepts where shopping is combined with entertainment, education, or personalized experiences, making brick-and-mortar stores destinations in their own right.
5. Need for Personalized and Seamless Experience
Gen Z has high expectations when it comes to their shopping experiences. They value convenience, efficiency, and a seamless checkout process. Retailers must deliver a positive in-store and online shopping experience to meet these expectations. Research shows that 22% of Gen Z consumers refrain from making repeat purchases if their online experience is poor, while negative in-store experiences deter 25%. Retailers must invest in creating an intimate and personalized shopping experience, leveraging technology and data to tailor recommendations and offers to individual shoppers.
For example, a retailer could offer a mobile app feature that allows customers to scan items in the store to see additional sizes, colors, and reviews. If a desired item is out of stock, the app could immediately offer the option to have it shipped to the customer's home or reserved at another nearby location. To streamline the checkout process, the retailer might introduce mobile payment options and self-checkout kiosks, reducing wait times and enhancing the overall shopping experience. Using data analytics, the retailer could send targeted promotions and discounts to customers through the app, based on their shopping habits and preferences.
6. Mobile Check-out and Virtual Shopping Experiences
Recent statistics reveal that Generation Z exhibits distinctive mobile shopping behavior and a strong preference for virtual experiences. 33% of Gen Z individuals have made purchases based on influencer recommendations within the past three months, and 28% have completed transactions through mobile applications. This demographic is also known for making impulsive purchases, with 29% likely to buy spontaneously during sales and discount events.
Retailers should focus on creating engaging, personalized, and user-friendly mobile applications to attract and retain Gen Z shoppers. Additionally, virtual shopping experiences can bridge the gap between online and offline shopping. Retailers can leverage technology to provide interactive and immersive experiences, allowing Gen Z to engage with store associates and explore products virtually.
7. Embracing BOPIS for Streamlined Pickup
Buy Online, Pick-up In Store (BOPIS) has gained popularity among Gen Z shoppers. This method allows them to enjoy the convenience of online shopping while still having the option to pick up their purchases in-store. Gen Z values immediacy and convenience, and BOPIS fulfills these expectations. Retailers must execute BOPIS seamlessly to boost customer loyalty and generate additional revenue. Smart lockers, such as those offered by Parcel Pending by Quadient, can streamline the BOPIS process, providing a safe, secure, and contact-free experience for Gen Z shoppers.
8. Driving In-Store Purchases and Loyalty Programs
Retailers can drive additional in-store purchases by bringing Gen Z customers into physical stores. Studies show that 61% of shoppers who come to the store to collect their online orders make additional unplanned purchases. Retailers can capitalize on this by incentivizing customers to utilize BOPIS, such as offering product coupons or samples in the lockers. These incentives encourage repeat visits to the store, fostering loyalty among Gen Z shoppers.
9. Social Responsibility and Sustainability Consumers
Gen Z is a socially conscious generation, prioritizing supporting brands that align with their values. Retailers must demonstrate a commitment to social responsibility, sustainability, and ethical practices to resonate with Gen Z shoppers. Supporting causes such as mental health, racial and gender equality, and environmental initiatives can attract Gen Z's loyalty and advocacy. Gen Z's purchasing decisions are often driven by a desire to positively impact the world, and retailers must align their brand values with these aspirations.
10. The Future of Shopping Malls is Community
Thanks to the influence of Gen Z, shopping malls have the potential to thrive once again. Malls can become vibrant and relevant destinations by adapting to Gen Z's preferences for in-person experiences, community-building, and seamless technology integration. The success of retailers and shopping centers will depend on their ability to understand and cater to the unique needs and desires of Gen Z, leveraging technology, social media, and sustainable practices to create an engaging and purposeful shopping experience.
Conclusion
Gen Z's passion for in-person shopping, combined with their reliance on social media and technology, is reshaping the future of shopping malls. Retailers must adapt to Gen Z's experiences, convenience, and social responsibility preferences to capture their attention and loyalty. Malls should provide a personalized and seamless shopping experience, leveraging mobile and virtual platforms, and embracing sustainability, to tap into the immense buying power of Gen Z.
