Despite being far more tech-savvy than previous generations, Generation Y, the 80-million strong cohort of Americans between the ages of 18 and 35, has not forsaken shopping in stores for online purchasing—as long as retailers keep their offerings “fresh” and interesting, says a new report from ULI.
Generation Y: Shopping and Entertainment in the Digital Age explores the shopping preferences of Gen Yers, who associate shopping with socializing, and who place a high value on living close to retail. It notes that while Gen Yers enjoy shopping and dining out, they tend to bore easily, compelling retailers to constantly update their merchandise and find new ways to engage these consumers.
The findings have numerous implications for today’s retail property owners, developers and managers, including the following:
- Restaurants at all price points are popular with Gen Y, but owners should be careful of providing tenants with generous improvement allowances to attract them. Young consumers tend to move from one “hot spot” to another; vacancies can result when a hot trend turns cold.
- Enclosed malls remain popular, but can face challenges to retain their appeal among fickle consumers. To keep shoppers visiting, mall owners should refresh interiors frequently, encourage social gatherings, incorporate movie theaters and renovate obsolete ones, add specialty food purveyors and grocery stores, serve as pick-up points for merchandise ordered online, and encourage pop-up stores.
- Malls are big contributors to the chronic inventory of excess retail space in the U.S.; many are ripe for redevelopment. Smaller formats are more suitable for time-conscious shoppers, many of whom may just be looking at goods that they will ultimately buy online.
- Gen Y strongly supports discount department stores and warehouse clubs – a format that could supplant aging malls and be suitable for infill sites. In contrast, power centers with single-focus “big box” stores are losing out to both warehouse clubs and online aggregators such as Amazon.
- Most lifestyle centers target older, affluent shoppers; to attract Gen Y, owners should focus on apparel brands favored by Gen Y, offer more choice in eateries and include specialties such as a gym, salon, “green” grocer, bike shop, pet store and/or dog run, and uniquely local offerings.
Authors M. Leanne Lachman and Deborah L. Brett based their report on an online survey of 1,251 Gen Yers conducted by ULI and Lachman Associates, a focus group conducted at Columbia University’s Graduate School of Business, and a literature search.