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Stores are closing on Main Street, ecommerce is booming (up 15% in the last quarter), and malls are being reinvented as lifestyle hubs. Retail is being reinvented, but consumer tastes are shifting, too. What does the next generation think about and expect from retail? There’s a whole new way to do retail right, if you understand what Gen Zers are looking for is not just stuff—but a stage.

 

The team at Faith Popcorn’s BrainReserve went shopping in L.A. with Katie, 20, Billie, 19, and Lilou, 14, who gave us the lowdown on where shopping is headed. Here, we share the learning from this outing and the implications for your brand.

 

Photo-ready

We started off in West Hollywood where a new storefront on Melrose Avenue was just revealed. Suddenly it became the backdrop for thousands of Instagram posts. Teens are flocking to this corner because it’s home to a gloriously vivid Pepto-Bismol pink wall, and mythical sprightly unicorns are dancing all over it. Oh, and Kourtney Kardashian is rumored to be behind it, say our Gen Z shoppers. The brand about to take over the space—perhaps as a pop-up, or a try-out retail experiment—is Pretty Little Thing, which is known for nightclub-slinky dresses and teddy-bear fake furs in neon brights. The girls pose for pictures and promise to return the moment it opens.

 

“Look north”, says Katie, and we see Kylie Jenner’s billboard facing the Sunset Strip. Her straight-to-consumer business is on track to pull in $1 billion by 2022. We head up there to grab a selfie against Kylie’s famous pout before continuing to the mall.

 

How this will morph: Social media-friendly spaces that integrate AR and VR. The more spectacular and surprising a location—real or virtual—the more Gen Zers will want to experience it. The success of the Rain Room and Museum of Ice Cream tells us that immersive events are customer candy—and the more digital integration involved, the better. Perhaps the pink billboard we spoke about above will soon have holographic unicorns racing across it.

 

Social Scene-Me

How do Gen Zers navigate where to go and what to get? Social media is becoming ever more powerful in steering shoppers: 41% of Gen Zers are influenced by Facebook ads, 30% by what they see on YouTube, and 26 % by Instagram—and that doesn’t include the additional boost delivered by seeing brands in influencers’ feeds. “For special events, I look on Snapchat to see what other people are wearing,” says Lilou. “I try not to wear super basic clothing, so I check Pinterest to see if they have any good suggestions, but I’d say most of my outfits are inspired by Instagram.”

 

Is the mall still relevant? Yes, says Lilou. It’s where she and her friends gather on the weekend. Their parents feel they are safe there, and—according to IBM’s “Uniquely Generation Z” study—67% of Gen Z shoppers still prefer to buy their items in-store. Beyond that, GShopper found 86% prefer “experience” stores today where they can interact and try before they buy—and engage in new ways with the products. Says Billie, “I do my research on social media—it’s where I get inspiration—but then go to the store to try it on, buy, and be part of whatever event is happening.” The kinds of events that young shoppers crave: meeting influencers in-person, photo-ops against cool backgrounds, and VR immersions.

 

How this will morph: Marketers will have to target Micro-Clans—small groups with commonly held beliefs—rather than going for the big, universal wins. Think small events catering to passionate tribes who will broadcast your message and products with their carefully cultivated audience. Then make sure you are balancing the ways these consumers can interact with your brand—it’s not just online vs. in-store anymore. Your role will be to engage these Micro-Clans via social platforms, AR, VR, and IRL. Only through having a full array of efforts will you connect with this consumer.

 

The Thoroughly Modern Mall

Today’s Westfield Century City, a 1.3 million square foot outdoor emporium where 90% of the stores are trying out their “future concepts,” shows exactly how the mall is evolving. The food court has gone, replaced by an upscale Eataly; Tesla has a showroom with hands-on VR next door; Amazon is trialing a no-prices-posted store (sign in as a Prime member to see what stuff costs). There’s even the hot new Silicon Valley concierge wellness service called Forward; mall-shoppers can visit the tech-enabled doctor’s office of the future in between trying on jeans and gobbling up dumplings. The Westfield’s huge AMC theater does secret Hollywood studio previews once a week, and live music gigs are part of the program. This isn’t shopping as we know it—this is an experience—and a stage for Gen Z to explore, perform and record memories. Says Billie, “I feel like I need something really new, really cool and surprising every time I come here. I don’t just want to revisit the same places.”

 

How this will morph: We are at the start of the Entertain-Me Economy, and this will seep into autonomous vehicles and send shockwaves through the marketplace. Not only will brands need memorable, buzz-worthy experiences, they will need to take them on the road and offer them to consumers in driverless vehicles. Rides in fact may be free, with marketers providing free trips as long as consumers engage with their brands while in motion.

 

Use Your Voice

The Amazon store at Westfield is less about books, and more about pushing Alexa. All three girls are familiar with voice-activated assistants and have them on their phone, in their college dorm, and at their parents’ places. This is an important trend. Have you trained your brand on an Alexa “skill” yet? According to a recent study from Walker Sands, nearly 1 in 5 consumers purchased something via one last year, and the number for Millennials was much higher, at 43%.

How this will morph: Soon, getting product intel and ordering will be unspoken and internal. Our culture is already flirting with implanted chips—like the ones some 3 Market Square employees in the US and many Swedish teens have implanted in their fingertips to open locks. In the not too distant future, these chips will allow us to order items, too. Is your team getting ready for fully integrated ordering, messaging and customer service—no written or verbal communication needed?

 

Perfect Personalization

No more off the rack: Our young shoppers said they want to have a hand in designing, 3D-printing and customizing products. Consider fashion: “I would love to 3D-print clothes so I could modify the design to match my style. It would also allow people to feel more comfortable in their skin through custom sizing. Everyone has such different bodies, why try to have us fit into S, M, or L?” asks Katie.

 

In fact, KPMG found that 77 % want products that are personalized, or targeted and displayed specifically to their personal taste. “I would love to be able to 3D print items so that I can custom-make them,” says Billie, “rather than be stuck with what some brand thinks I want.”

 

How this will morph: As consumers want completely personalized products—DNA-level customization—and control, AI will play a more meaningful role. Whether the consumer wants to create their own products or buy pre-made ones, they will expect it to sync with their size, their biometric needs, and their mood. AI will be able to parse their data and that of peers and serve up options that match the individual’s needs and wants.

 

Tell Me No Lies

This socially conscious generation doesn’t want closets and shelves full of stuff. They want to upcycle and know that their products are being re-fashioned into something someone else needs. Basically: lose the landfill. Some stores (like H & M) are diving in and offering discounts for recycling. But Billie wants to know people less well-off can benefit from her former purchases in a way that doesn’t involve any of her time: “I usually donate to a good cause that will pick up from my home. I don’t really want to bring my old clothes back to the store.” Lilou agrees and adds, “I’m starting to pay more attention to how brands treat the environment, too. I want to know more about their policies, both how they source materials and manufacture, as well as what they do with the stuff that doesn’t sell.”

 

This generation demands transparency from brands—they’ve all seen documentaries about sweatshops, child labor, animal cruelty, e-waste and more. This generation is unforgiving when they perceive corporate greed.

 

How this will morph: Brands won’t have anywhere to hide. Consumers will make it their business to know all of your practices and share them widely. Apps will tell them the sources of your raw materials, any contaminants present, and how well you pay your employees and maintain work conditions. Your job is to get ahead of them, clean up your act, and be an early adopter of programs that lift up your staff and your customers’ lives. It’s time to get to work.

 

One thing's for sure: Gen Z has arrived—ready to reinvent retail as we know it. How will your brand adapt and thrive under the new rules of retail? To learn more about the proactive approaches savvy companies should be taking, This email address is being protected from spambots. You need JavaScript enabled to view it. your brand-specific questions (the future of your company will thank you).