Do Malls Need a Gen-Y Makeover?
The good news for enclosed malls is that online buying isn’t drastically taking away their business with the Gen-Y crowd. The bad news: big box discounters and warehouse clubs could be, according to a new report from the Urban Land Institute (ULI).
The core finding of the report, Generation Y: Shopping and Entertainment in the Digital Age, was that Gen-Yers (18 to 35) still likes brick & mortar shopping despite their comfort with technology. A recent survey of 1,251 Gen-Yers in late January found that 37 percent "love" shopping and 48 percent "enjoy" it. Half the men and 70 percent of the women consider shopping a form of entertainment and something to share with friends and family.
However, a secondary finding was that Gen Y strongly supports discount department stores and warehouse clubs, which are visited at least weekly by 31 percent of Gen-Yers. That compares to 12 percent who visit a full-line department store weekly.
Big boxes are also increasingly becoming destinations for apparel, a core mall offering. When asked an open-ended question about going for "trendy" or "chic" apparel without spending too much, the most frequently mentioned store was J.C. Penney, followed closely by Target and Walmart.
Given Gen-Y’s acceptance, ULI urged municipal governments as well as mall owners to consider encouraging the use of the discounters’ smaller formats to fill unoccupied retail space.
Based on the survey’s responses, a number of suggestions were also offered for malls to retain the "fickle, easily bored" Gen-Y crowd:
- Refresh interiors frequently with paint, lighting, new carts, etc.
- Encourage social gathering — food courts, center courts, restaurants, and temporary or permanent event venues.
- Keep bringing in pop-up stores, partly because some will become permanent.
- Add specialty food purveyors and grocery stores.
- Incorporate movie theaters, and renovate obsolete ones.
- Become pickup/drop-off points for merchandise ordered online. Malls can work as a hub for multichannel selling.
At the 2013 ULI Spring Meeting in San Diego, ULI officials along with a panel of retail, development and technology experts stressed the importance of bringing fresh sensory experiences and social interaction.
"I think ‘marketing director’ is a dead term," Linda Berman, president of Team I-Sight, said at the event, according to U-T San Diego. "You need a programming director now. I would pull somebody out of entertainment; somebody who has lived and worked in popular culture. Those are the people who are going to make your centers vibrant."
- Tech-Savvy Gen Yers Still Flock to Stores, Challenging Retailers to Keep Up with the Quickly Changing Preferences of these Young Consumers, Says New ULI Report – Urban Land Institute
- Generation Y: Shopping And Entertainment In The Digital Age – Urban Land Institute (Study) – Urban Land Institute
- Gen Y still flocks to malls – U-T San Diego
How can enclosed malls reinvent themselves for Gen-Y? Do you agree that “program director” is a better way to describe a mall’s marketing director’s role?