The millennial generation is quickly becoming an important demographic in the economy as they begin to graduate from their respective scholarly institutions, get jobs, and contribute more into the workforce while progressing their careers. According to Pew Research Center in 2017 Millennials already comprised 35% of the labor force with some estimates stating that the percentage will grow to 46% by 2020.
With this growing presence, one of the consumer trends that is witnessed (particularly with millennials) is that they are very engaged with spending their hard-earned money on experiences more so than just products. This trend is illustrated by many sources and economists in the United States.
The overall theme forces companies to adapt and incorporate a full experience around the items they sell and services they provide. This cultural influence is witnessed across all consumer markets, especially in retail centers and shopping malls around the country. The tangible changes anchored around customer experience will only be further witnessed in the coming years.
We reached out to various commercial real estate professionals focused in the retail sector to provide their expertise on what changes they see geared towards successfully engaging millennials in the retail market especially in the foreseeable future.
Here are what the experts say on Engaging Millennials in the Retail Market:
Millennials are driven by experiences. A vibrant retail center will be one that effectively mixes experimental concepts like rock climbing with traditional tenants that are effectively adapting to changing consumer preferences. With more dollars now being spent on restaurants than grocery stores, new food concepts are a major driver of foot traffic as well. Merging consumer convenience, innovative tenants, and immersive technology should be the focus of retail landlords moving forward.”
Karly Iacono, Associate Director, Iacono Retail Group
Retailer centers must adapt by offering engaging and experiential environments that appeal to millennials.
Many shopping centers are well positioned in communities that can serve as eating and socializing spaces where millennials can congregate. Further, developing plazas with sustainability in mind will attract younger clientele since they genuinely believe in making positive environmental choices.”
Dimitrios Langas, Managing Partner, RPM Realty Management, LLC
In this ever changing retail investment world, 3 Properties prides itself on being a small but nimble and forward looking firm. We are keeping our attention on the millennial focused response of retailers to better educate our clients who invest in these assets. We seek ways to quantify and qualify the data and feedback shaping the retail landscape to help investors relate the changes in their investments. We have to have the same approach as developers and retailers, adapt or die.
The changes of more mixed use and unique consumer experiences tied to online behavior, shape the planning and development of new concepts and finding ways to create a brick and mortar presence should change the way a broker analyzes data for an investment. We are constantly looking for ways to use knowledge and trends to disrupt our industry, be more efficient and data driven.”
Teal Henderson, President, 3 Properties
At STOLADI, we tell our clients, The “War” between the new & old retail titans is being fought daily with both sides winning and losing at the same frequency… Outflanking is only half of the battle when frequency of change coupled with social sustainability in urban and suburban regeneration practice wins the day. Millennials and any customer, for that matter, want to see reactionary change with Landlord’s re-thinking, adjusting and re-tooling which screams of a Landlord’s mental fortitude and confidence in the marketplace.
At the end of the day, both are essential and mental/social lines are becoming blurred between jumping over to the local mall/retail neighborhood in order to experience the social interaction we all need coupled with shopping e-commerce whereby they begin to complement each other through natural equalization given that, millennial or not, human nature will drive the future and often not necessarily in the same manner.”
Jim Stokes, Principal/ President, STOLADI
As the overall buying power of Millennials continues to grow, retail centers must adapt or be left behind. The era of the Mallrats died with the advent of smart phones, Amazon/online shopping and social media. Landlords and developers can no longer buy a center, plug-n-play with the same tenants/uses from their other sites and expect to have a profitable project.
Landlords and developers of retail centers need to spend more time analyzing their project demographic makeup and identify unique retailers with entertainment & community components to draw in the Millennial shoppers. Chef-driven restaurants with Instagram worthy meals & walls for photo-ops, Shopping Center snapchat filters & apps with tenant directory, unique common areas for community events, free center-wide WIFI, Uber pickup / drop-off stations and parking stalls, virtual entertainment and so on. It’s clear the Millennial shopper has changed the retail landscape and it’s just getting started.”
Gabriel Gonzalez, Leasing Associate, Woolbright Development, Inc