Forget those predictions over the demise of the U.S. shopping mall.
A new report from HRC Retail Advisory on Generation Z reveals a consumer demographic that shops online, but also considers malls an important destination.
Farla Efros, president of HRC Retail Advisory and lead author of the report, which was based on a survey of more than 3,000 consumers in the U.S. and Canada, told WWD the research also revealed a consumer demographic that influences household purchases across categories — apparel, home goods and electronics.
“Generation Z have been born with a tablet in their hands,” Efros said. “And parents and other family members are using them for information and research on products.”
As the parent of a 14-year-old, Efros knows their role and influence in the household firsthand. “When I have a problem — any problem — I go to her first,” Efros said. “So, parents are empowering the influence of this generation.”
And their influence is great, as Efros and other researchers estimate the spending power of Generation Z to be $43 billion. “Generation Z will represent 20 percent of the population by 2020,” she added.
The context of the study is a retail market that is “experiencing a generational shift in consumers, and these new younger shoppers have vastly different expectations of how they want to interact with retailers,” Efros said in the report, adding that Generation Z “has become an increasingly important influencer of consumer spending with new shopping behaviors that focus on both malls and online shopping, and are heavily influenced by friends, bloggers and social media.”
Efros said retailers “must appreciate the different expectations and habits of this group, as well as of Millennial parents with children, and develop and execute strategies that address their needs in order to stay competitive with this increasingly important consumer segment.”
The HRC study noted that malls are “not dead, but are being shopped differently.”
“Malls are still very popular, especially with Generation Z shoppers,” the report stated. “While more than 60 percent of all survey respondents said they visit a mall or shopping center at least once a month, 72 percent of Generation Z respondents (children aged 10 to 17) and Millennial parents with children say they do so.”
“These shoppers go to the mall with a specific mission and in search of specific items,” Efros said in the report. “Generation Z shoppers also spend more time at the mall and they visit more stores.”
Twenty-two percent of respondents who are “frequent” Generation Z visitors “say their typical trip to a mall is more than 90 minutes and they visit, on average, four to five stores.”
When it comes to social influencers, Efros said Generation Z influence their friends and vice versa. The report noted that Generation Z shoppers “tend not to be strongly influenced by celebrity endorsements from athletes, actors and singers.” Respondents said 61 percent of their buying decisions “are most strongly influenced by friends, with 13 percent being influenced by bloggers.”
Moreover, social media platforms play a critical role in influencing purchasing decisions. “Approximately 50 percent of Millennial and Generation Z shoppers surveyed use social media while they shop,” the report noted. “Of their social media time, most is on Facebook (61 percent), followed by YouTube (38 percent) and Instagram (24 percent).”
Regarding gifting, HRC found that 62 percent of all respondents had a preference for receiving gift cards over an actual gift while 69 percent of Generation Z felt the same. “The majority of respondents, particularly parents, plan to include gift cards among their holiday purchases,” the report stated. “Among Millennials that have children and earn more than $150,000 per year, 96 percent plan to include gift cards in their holiday shopping.”
The report also found that Amazon.com is a prime destination, with 79 percent of respondents stating they shopped on the site in the last year. And 66 percent of Millennials said they bought items online at least once per month.
Efros said as Generation Z “begins to gain a foothold in the consumer spending environment, and Millennials mature, their expectations are transforming the retail landscape.”
“In order for retailers to remain competitive, they must begin to develop a balanced approach to serving Baby Boomers and Generation X — who still have the great majority of the spending budget — while positioning themselves to best serve the emerging and future consumer segments for longer term success,” Efros said.