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Which Retailers Are Drawing Gen-Z Shoppers In Stores?

A surprising number of mall-based chains are winning out with the youngest consumers — but mom and dad might have something to do with it.

Amidst an ‘over-storing’ crisis in retail, mall-based brick-and-mortar chains like Ugg and The North Face actually appear to over-index with Gen-Z shoppers when it comes to drawing foot traffic, according to a new report from InMarket (download required).

The proximity platform looked at generational foot traffic (from Gen-Z teens to Baby Boomers) to determine which physical businesses over-index or under-index for specific age groups, in a bid to give marketers a glimpse into demographic shopping affinities. Some of the finding appear evident — Baby Boomers do more shopping at Yankee Candle than Millennials, for example — but Gen-Z’s shopping habits at “traditional” brick-and-mortars may come as a surprise.

“If you’re a brand marketer, it’s never to early to start understanding
what’s coming next,” InMarket’s report states. “Gen-Z — the supergroup of digital natives born after 1995 — don’t know a world without the internet and [they are] poised to shake up the world as they become the prime-spending demographic.”

In-Store Spending Isn’t Dead

The top four retail stores attracting more Gen-Z customers than other generations are Ugg, The North Face, Payless, and Vans, according to InMarket’s location analysis.

This finding offers two key insights: First that Gen-Z teens are patronizing “traditional” mall-based retailers not just online but in their physical spaces; and second, that this demographic favors more upscale brands than their Millennial counterparts — whose power rankings are topped by discount chains like Ross, Rainbow, and Burlington.

Gen-Z’s willingness to spend at retailers like The North Face likely has something to do with the fact that mom and dad are still padding the pockets of this generation; teens born in 1995 or later are still under 18, meaning that most of them probably aren’t picking up the tab for their shopping trips. Essentially, this trend may or may not last once Gen-Z members are working full time and footing the bill themselves in a few years.

But, on the other hand, Millennials are the generation that entered adulthood during or soon after the financial crisis, making it easy to see where their relative frugality comes from. Over and over, research has underscored the idea that the majority of Millennials prefer to spend on experiences rather than things, and they can be a bit gun-shy when it comes to pulling the trigger on more expensive retail purchases. Perhaps members of Gen-Z will take a different view, which could serve as a boon to retailers as they come of age over the next five years.

As for parsing out Gen-Z’s apparent willingness to shop at retailers who could be considered to be a part of the current “mall crisis?” It’s a bit more complicated. Are they patronizing these retailers because their parents are in the habit of driving them to a mall or other block of local stores? Or is it because Ugg, The North Face, and similar competitors — like REI, for example — have created a online-to-offline brand message that resonates with a generation fixated on authenticity?

It’s likely a mix of both. The North Face has been lauded for creating a community of outdoor enthusiasts online, especially through its partner online hub Planet Explore. And for its part, Ugg has long engaged in influencer marketing, working with athletes like Tom Brady and teen icons like Kendall Jenner — who are known as brand advocates on social media in a bid to create influencer endorsements that feel more “transparent” (think hashtags like #ad or #partner).

As a panel of Gen-Z teens discussed at this spring’s MMA Location Leadership Forum, creating these kind of social media/online communities in a way that doesn’t seem manipulative is one factor that appears to have a profound impact on younger shoppers — as does a brand standing for a cause or message that seems endemic to its industry/mission.

Perhaps these outdoor retailers in particular have done a good job of broadcasting a consistent, cross-channel message that appeals to Gen-Z teens as a means of thinking “beyond commerce.” But as this demographic ages out of being driven around by their parents, brick-and-mortars will almost certainly have to do more with mobile, in-store experiences, and beyond in order to keep these consumers coming back.

About The Author
Lauryn Chamberlain Lauryn Chamberlain @laurynchamberla

Lauryn Chamberlain is the Associate Editor of GeoMarketing.com. A New York City based journalist, she specializes in stories related to retail, dining, hospitality, and travel.