Generation Z could be the unlikely saviour of physical stores asks Sasha Cuff of RPA: Group

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

With the convenience of online shopping already accepted, why would this group seek to congregate in shopping centres and on high streets? We strongly believe that a need for social interaction is driving this. Think back to 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 to keep the typical teen entertained, but not anymore. 

The Gen 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. It is up to brands and retailers to create environments that support this. It is all about breaking the mould, bringing down barriers, using a lot of imagination and not being afraid of trying new things. In short, there is a need to facilitate opportunities that create memorable moments and experiences for Gen 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 recent 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 demand and looking at the use of space, to allow for the diversification of experience. As Malloch 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 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 evolving. Malloch says there is a strong drive to support local brands, involving a move away from the mass market to something different. This is being bolstered by offering more short-term leases, 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 Gen 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 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 say: “In Wembley, there are events happening frequently anyway and our focus is more on the overall guest experience.” This has been supported by the launch of a digital service called “drop it”, which allows customers to leave their shopping in the stores and attend events. A concierge collects their purchases and arranges home delivery. It is all about identifying “pain points” and responding to them.

Research plays a key part in discovering what drives influencers and spend. Although this generation prefers physical retail, they still want the convenience of an online experience. Developing street-style apps, offering click and collect, and free delivery, and using analytics, all helps to deliver this. iBeacon and tracking technologies allow 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 the curation of 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 with 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.

Sasha Cuff is marketing executive at RPA: Group

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