Back to the Future
Nov 1, 2007 12:00 PM, By Elaine Misonzhnik
They also discuss their purchases and shopping experiences with their friends, both in person and through online forums, so word-of-mouth marketing becomes of supreme importance, adds Gronbach.
The takeaway for retailers? First of all, consider wider aisles so the store can accommodate larger groups of people, according to Sago. In addition, hire Gen Y-ers to staff the stores. “The labor force used by retailers for the past 20 years has been whoever they can get,” says Gronbach. “But these kids speak a different language, so having their contemporaries working in the store is a critical factor.”
And, don't forget, when Gen Y-ers go out to shop, they want more than just a shopping spree. They want to have an experience, a fun outing where they can touch the products and discuss them with other people of their age, says Maloney. Apple stores serve as an excellent example of where the retail environment is going, he says. Anyone who has ever been to one of Apple Inc.'s Apple Stores will remember the modern feel of the layout, the interactive merchandise on open display and the slew of on-site help experts ready to answer even the silliest questions.
The mall is back
Generation Y's consumer savvy and sense of entitlement means that retailers will have their job cut out for them in tapping that lucrative market. “They are looking for…everything. Experience, engagement, empowerment, enticement — basically a reason to be there,” says Robinson. Shopping center owners, however, should have an easier time. It turns out that unlike their parents, who tired of the enclosed mall and now gravitate to town centers, lifestyle centers and downtown storefronts, Gen Y-ers embrace all kinds of retail formats, including the much-maligned enclosed mall.
At the same time, a lot of mall owners have enacted curfews at properties across the country (50 at last count) to control the hours of teen access — the groups shopping tend to be intimidating to adult visitors.
The trick lies in making the mall a social gathering place, as well as a shopping venue, says Nevins. That means adding entertainment components like movie theaters and bowling alleys and providing a selection of fast casual restaurants where teens can sit down and eat for a reasonable price. It's also not a bad idea to cluster retailers targeting Gen Y-ers demographic into a single area within a property, Nevins adds. That's how Macerich targets teens at the 2.2-million-square-foot Tysons Corner Center in McLean, Va. In 2005, concerned that the center wasn't reaching its full potential, the company took a former 250,000-square-foot JCPenney building at the property and rehabbed it, adding another 275,000 square feet of space in the process.
This section of Tysons Corner now features an 18-screen movie theater, a collection of restaurants and a mix of stores that includes Abercrombie & Fitch, Hollister, Urban Outfitters and, come December, the Canadian chain Garage, which sells teen apparel and accessories. The entire project cost Macerich approximately $100 million.
“We specifically targeted key retailers in the Generation Y segment, but we also tried to hit all socioeconomic price points, so we've got everyone, from Old Navy to Abercrombie & Fitch,” Nevins says.
The reason? Even if certain members of Generation Y can't afford to shop at upscale stores, either because of their socioeconomic background or because they are too young to manage their own money, they enjoy window-shopping at upscale chains. Nevins' 13-year-old daughter Hayley, for example, can rattle off a list of luxury brand products she plans to buy once she has the money, even though she can't yet afford most of them.
“When I was growing up, I knew the Gap and I knew Levi's and those were pretty much my options,” Nevins says. “But my daughter already understands what the aspirational brands are and she's looking for her shopping environment to include those stores because she [plans] to shop there in the future.”
Jones Lang LaSalle, which manages 35 million square feet of retail space in the United States and the Caribbean, advises its owner clients to do the same thing. Generation Y members like the clustering of the stores and they also like areas where they can multitask and meet their friends, says Maloney. That's where food courts and movie theaters come in.
