Chart of the Month – May 2019
Don’t Destroy the Malls Yet![i]
[i] Data for above chart was obtained from a survey of >1,000 children ages 13 to 19 conducted in the USA by Engine on behalf of the International Council of Shopping Centers.
It is easy to believe that the days of the “good ole shopping mall” are over and that internet sales will take over the retail shopping experience. Indeed, if one were to look at the Millennial generation one would be justified in such a belief. However, when one looks at the younger Generation Z cohort you find that the kids love the physical aspect of shopping and the mall has once again become a social venue. Malls of the future will clearly provide many food and beverage outlets. More surprisingly perhaps is the trend to purchasing personal care products in a store as opposed to simply ordering on-line. Generation Z likes to try on new duds and would prefer to try things on and see how they look than take selfies to give clothing manufacturers their measurement and have a selection of clothes sent to them. Also very surprisingly the Gen Zers want to see their electronics before purchasing them, or maybe the electronics store has become a social venue unto itself.
These trends could explain the reasons for Amazon, of all companies, acquiring bricks and mortar distributors like Wholefoods. The question remains to whether Gen Zers will still want to go shopping as they grow up and their lives become more complicated. There is also a question around whether they prefer shopping in malls or in the big box stores like Costco and Ikea.
Clearly if one wishes to build one’s own virtual store that will appeal to Generation Z one should be looking for novelty items that may not sell as well in a mall but if you wish to appeal to their appetites you should be looking for a prime location to set up a modern eatery.