NEW YORK–It’s an accepted fact among many in credit unions that younger Americans do everything online, a change in consumer behavior that will eventually lead to the death of physical CU branches, shopping malls and more. But the behavior of at least one cohort of younger people seems to challenge that assumption.
In what might lead to at least a rethinking of their future plans, new research has found Gen Z, those currently between the ages of seven and 22, “still appreciate brick and mortar” and “love” the shopping mall. While that research wasn’t focused on financial institution branches, it could portend a generation showing a preference for physical locations.
According to study conducted by the International Council of Shopping Centers, approximately 95% of Gen Z'ers visited a physical shopping center in a three-month period in 2018, as opposed to just 75% of Millennials and 58% of Gen X. And three-quarters of the Gen Z’ers said going to a brick-and-mortar store was a better experience than online, the ICSC found.
‘Turns Out Not to be the Case’
“There’s always been this assumption that as you go through the age spectrum, the younger consumer that has grown up with online and digital and is very savvy would shun physical experiences,” Neil Saunders, an analyst at GlobalData Retail, told Bloomberg Business. “But actually that’s not turned out to be the case.”
But a preference for physical facilities is not enough in and of itself, Bloomberg Business reminded, noting that retailers that have failed to understand differences in how the youngest consumers shop has sent many to bankruptcy court, and left U.S. malls with a 9.3% vacancy rate.
Two Lessons
Among the recommendations made by Bloomberg Business for evolving with the market:
* Don’t Fight the iPhone. “Gen Z spends a lot of time on their smartphones—and they know it: Nearly six out of 10 self-diagnose overuse, according to a recent survey by Bloomberg and Morning Consult. For companies that embrace that, instead of fighting it, the payoff can be huge,” the report found. In the case of malls, this includes push notifications with digital coupons when shoppers are inside the mall.
* Let Users Customize Their Experience. “Different is the name-of-the-game for these young adults. Nearly half of Gen Z shoppers want products tailor-made to their tastes and interests, according to a 2018 report from IBM and the National Retail Federation,” Bloomberg reported.