20 Dec Could Gen Z Save The Mall?
As mixed-use or digital retail have gone on the rise, we’ve seen the slow decline of the American mall. In some parts of the U.S. you can easily see completely vacant mall properties. A number of factors go into the general decline of brick & mortar storefronts, several of which are especially true for malls. But, although malls have been decaying, could a new generation of purchasers and a strategy pivot from businesses keep malls afloat?
Generation Z, a group of people under 25 years old, now have roughly $143 billion in spending power and influence an additional $450.5 billion in spending by others, according to CBRE. This generation, growing up as the first digital natives, is not as ready to give up the physical shopping experience as their millennial counterparts. While Gen Z is quick to put their phone to use in buying online or looking for better deals, their preference is click and collect shopping, where they buy online and enjoy the instore experience of pick up their purchase. 81% of Gen Z enjoy going to stores, especially stores that give heightened experience.
The concept of experiential retail has been coming about for the past few years, and hits hard with this demographic. Retailers hoping to entice Gen Z are often pivoting aspects of their store to be more attractive, fun, and “Instagram Worthy.” And malls especially have noticed this. Philadelphia based PREIT recently invested $400 million into redesigning a downtown mall in their portfolio. But, it’s not going to be as simple as “adding experience” to your storefront or mall in order to attract clientele.
“Young people, under 25 years old, are continuing to be a growing demographic at our properties. That doesn’t mean that all you need to do is lease it and they will come. That’s the old strategy. The new strategy is pick the right kind of dining, entertainment and experience, and they will come,” said Joseph Coradino, CEO of PREIT. Thoughtfulness is required to pull people in. Think of Atlanta’s own Ponce City Market as an example. One could argue that this shopping center is a chic mall full of boutique stores in a refurbished building. But it blends that trifecta of “dining, entertainment and experience” mentioned by Coradino.
Although not every mall is salvageable, malls that are able to attract Gen Z could begin to thrive once again. What are your thoughts on the decline and potential revitalization of the mall? We’d love to hear from you!