Gen Z is a generation most shake their heads at, but when it comes to liking malls, no generation does it better. According to a recent ICSC study, Gen Zs say they prefer in-person shopping as much as online. Further, 97% say they regularly shop in brick-and-mortar stores and use online shopping for convenience. Whatever the cause, this matters because Gen Z represents nearly half of global consumers with a spending power exceeding $360 billion that is only growing.
A recently released report from the International Council of Shopping Centers ("ICSC") made the surprising conclusion that Gen Z, people from 16 to 26, prefer in-person shopping as much as online shopping, if not more. 97% of survey respondents said they shop at brick-and-mortar stores and 95% that they shop online primarily for convenience.
This bodes well for real estate owners since Gen Z makes up 40% of global consumers with a spending power of $360 billion.
Contrary to popular belief, Gen Z aren't just escaping into the metaverse, they're breathing new life into malls. Retail experts point to Gen Z's instant gratification mindset as a key driver. Accustomed to downloading movies and streaming music immediately, they seek the same immediacy for physical products. There is nothing more immediate than in-store purchases.
"This digitally savvy generation is used to having things immediately that they can download, access, watch... the desire to get physical products immediately makes sense and would explain interest in brick-and-mortar... There could be drones that deliver things to us. But one thing you will not be able to have [delivered] are those [in-person] types of experiences." - USC Marshal School of Business Assistant Professor Stephanie Tully
Other studies support this conclusion. A CM Group (now Marigold) & F'inn 2022 report found that 47% of Gen Z said they prefer in-store shopping over online, more than any other generation. Other reports have found that Gen Z prefers physical and online stores the same. An ICSC report found that 60% of Gen Z would rather spend money on experiences than material items also indicating a shift towards real-life experiences. "Hang time" is key for malls targeting these shoppers adding offerings such as escape rooms, movie theatres, and a diverse set of dining options.
Not everything about Gen Z's interest in malls harkens back to a bygone era of malls as social gathering places. This time it's infused with a modern twist, a blend of instant gratification, social connection, and conscious consumerism. Gen Z's view of themselves tends to align better with smaller brands and the blending of several variables that is difficult to get right in a competitive digital marketplace.
The negative side of remote working trends is many young workers are deprived of meaningful professional interaction and mentorship opportunities. The loneliness factor is another factor retail experts are attributing Gen Z's interest in shopping in physical stores. In the same way companies are having to add amenities to convince their employees to merrily return to the office, the same can be said about the tenant mixes many mals are now employing to bait this generation. Nearly 70% of the ICSS report respondents said they prefer retail centers because they offer fun gathering places.