If your mental image of Gen Z is a bunch of teenagers glued to their devices, you’re only half right: time has marched on, as it is wont to do, and the oldest members of Gen Z are now 28 years old, while the youngest members are turning 13 this year. And there are a lot of them — they already comprise nearly one-quarter of the total population.
Retail marketers, understandably, want to appeal to this large consumer set, with spending power that’s forecasted to reach $12 trillion by 2030, according to the National Retail Federation. Even before that, in 2029, they will overtake Baby Boomers in total generational spend, according to the 2024 Spend Z report from NielsenIQ.
And despite their addiction to devices (not unique to this generation, of course), Gen Z consumers are enthusiastic in-store shoppers. However, their brick-and-mortar experience must be closely linked with their digital journeys, both before and after they visit a store.
But to really wow this cohort, the physical store needs to engage these consumers as well as reflect the brand’s overall values (which, hopefully, are in harmony with Gen Z shoppers’ values). “With Gen Z, there’s a resurgence of thrifting, and they’re also looking for sustainable packaging,” said Paige Lustbader, Retail Audit Director at BDO USA in an interview with Retail TouchPoints. “They want to ensure their dollar is going to the right place.”
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Gen Z’s enthusiasm for in-store shopping could even be a factor in rejuvenating malls, particularly if they house retailers with a strong Gen Z connection such as Claire’s, Five Below, Muji and Daiso Sangyo.
Post-COVID Search for Connection Motivates Gen Z
Gen Z has other reasons for in-person shopping: “Now that we’re in the post-COVID environment, people are striving for that connection and in-person experience,” said Lustbader. “Gen Z are craving [this] because they missed out on so much during COVID. They want to be part of something and feel connected.
“Since Gen Z now has spending power, retailers need to shift their focus to these individuals,” Lustbader added. “That means in-store experiences, interactive product demos — and merging the in-store and online environments is key. In fact, pure-play ecommerce companies are realizing that they need brick-and-mortar to connect with Gen Z.”
Lustbader gave the example of Warby Parker, which began in 2010 as an online-only retailer but recently celebrated the opening of its 300th store: “When it was all about ecommerce, they were all about it, but now, you have to have a bit of both,” Lustbader noted.
Could Gen Z Pave the Path to Malls’ Resurgence?
Gen Z’s thirst for brick-and-mortar shopping options has helped push retailers Daiso Sangyo, Muji and Five Below onto the NRF Hot 25 Retailers list, compiled by the association and David Marcotte, SVP of Global Retail and Technology for Kantar.
According to Marcotte, Daiso Sangyo and Muji appeal to younger shoppers — both Gen Z and their younger cohort, Gen Alpha — with assortments that are “what to an American is an eclectic Asian collection of goods,” said Marcotte in a statement. Additionally, Muji offers a “blind box,” containing a small item that remains unknown until it’s opened, feeding these consumers’ desire for a “treasure hunt”-style experience. Both retailers increase their allure by including events that “generate enormous foot traffic at malls,” Marcotte added. “They’re creating the energy to make the mall come alive.”
In fact, with one survey indicating Gen Z is as likely to shop at a mall as their Boomer forebears, they are driving a new trend in commercial real estate “to take older malls and make them into Gen Z malls,” said Marcotte.
As for Five Below, the retailer is slowly “aging” its product assortment: “They started by targeting tweens, but have expanded to reach young adults,” he noted.
Best Practices for Gen Z-Friendly Retailing
1. Support sustainability with actions, not just promises: When Coach developed its new Coachtopia sustainable fashion brand, it tapped into the fun, edgy designs that Gen Z loves, but it also developed a scalable model for reusing leather and other materials to create its products.
“Coachtopia has done an amazing job speaking to this generation of young shoppers who care about consumerism, circularity and the environmental impact of their shopping choices,” said Marie Driscoll, Adjunct Professor at Parsons The New School in an interview with Retail TouchPoints. “By designing products from inception with a circular mandate, Coachtopia is truly differentiating the brand and the product in the marketplace and has become a brand that younger shoppers are eagerly wearing and advocating.”
2. Show that your brand values diversity and inclusion: Mark Pingol, SVP at research firm Savanta, noted that Gen Z consumers’ support for inclusivity and accessibility has inspired some brands to broaden their appeal through more diverse product design. Gucci has leaned into informal luxury, “which marries streetwear and luxury in a way we have not seen before,” said Pingol in an interview with Retail TouchPoints. Additionally, brands such as Miu Miu have taken a genderless approach to fashion design, part of the “inclusive luxury” trend.
3. Talk with Gen Z, not at them — and listen to them: This is about more than just using the right Gen Z lingo in your communications (although that’s important). Many retailers are reaching out to members of Gen Z and Gen Alpha for ideas and inspiration. In February 2024 Claire’s began tapping a range of young creators and influencers for The Collab, inviting them to share stories, talents and perspectives via ongoing content development and social dialogue. The original seven members of The Collab — one as young as seven years old — were invited to participate in styling photo and video shoots, creating content and hosting events over a 12-month period.
4. Leverage social media and social commerce as touch points: “Social media plays an important part for Gen Z, both in terms of buying from platforms and with influencers starting their own brands,” said BDO’s Lustbader. “It’s another way of bringing their attention to products, even if they’re not necessarily buying” on a social platform; it’s just “one place they can go shopping. Gen Z likes multiple ways of buying what they want. And retailers need to provide a seamless experience between online and in-store to be successful.”
