The reinvention of retail: How Generation Z could save the high street

Online shopping is now more popular in the UK than any other EU country, and eight in ten of us make at least one online purchase per year, according to a briefing paper on the UK Retail Sector from the House of Commons Library in 2018.

A major reason online shopping has grown in popularity is its convenience. According to Nielsen’s

Connected Commerce Report, 95% of British shoppers are choosing to buy online due to timely delivery guarantees, and research by Royal Mail shows that the proportion of online shoppers making purchases on their smartphones while travelling rose seven percentage points between 2017 and 2018, from 71% to 78%.

Generation Z, who are defined as those born after 1996, are the first generation of digital natives and have grown up surrounded by connected devices and the Internet. Their world evolves around digital technology and they have been exposed to smartphones, You Tube and Amazon from their earliest days. The way they interact, socialise and shop is therefore different to other older generations, even the Millennials, their closest generation born from 1981 – 1995. Their ease with technology is therefore understandable and they are perceived as the generation always online.

So what does this mean for the High Street?  You would think the digitally native young shoppers are choosing clicks over bricks, and would rather buy online than trek to their nearest shopping centre. But when you look at the numbers more closely, it becomes clear that it’s actually the opposite – Generation Z loves the High Street and could inspire the next evolution of retail shopping.

Unlikely inspiration from Generation Z

Multiple reports now suggest that Generation Z is actually a brick-and-mortar generation. A report by PWC Canada, shows 18–24-year-old Canadian shoppers are choosing to spend more time in physical retail stores because they value the opportunity to socialise, interact and be entertained. A major pan-European research project by the Grocer had similar findings. Gen Z is the generation that’s most likely to say going to shops is enjoyable (76%) and that shopping with family and friends is a special time (also 76%).

Maciej Partyka, Barclaycard Insights Team, explains why this is the case: “Part of what makes offline shopping so appealing to younger people is that their shopping experience isn’t confined to the physical boundaries of the stores. Social media and influencers continue to play a part in the purchasing decisions for Gen Z, which means High Street brands that take advantage of cross-channel marketing can capture their attention and get them to visit.”

Experience is everything

Amazon already offers two-hour online delivery windows and could one day drop a package on your doorstep using a drone, but recent research by the US’ HRC Retail Advisory shows that Generation Z values the opportunity to have unique experiences in store. That means retailers must augment the buying experience in interesting ways that can’t be found online, like using Magic Mirrors to send photos from dressing rooms to social media, or transforming the entire store into a fully-immersive combination of experiences, with brand ambassadors on-hand to make shoppers feel welcomed and part of the story.

One example is House of Vans. The skateboarding apparel company Vans has turned the Old Vic Tunnels in London into a destination for skateboarders, offering ramps, a cinema, a cafe, live music and an art gallery. The brand shines through every aspect of the venue and, as a result, skaters flock to the flagship store.

Barclaycard research from 2018 shows that ‘surprise and delight’ are becoming increasingly important emotions for retail stores to evoke in shoppers. The findings show more than half of consumers would rather pay for a good experience than splash out on material possessions such as clothes and shoes. The same number (52 per cent) would choose to tell their friends and peers about an enjoyable brand experience rather than a purchase they’ve made. Such is the significance that Brits now place on having a good time that the experience a brand provides is almost equally as important as receiving value for money (81 per cent vs 83 per cent). This indicates there is huge opportunity for brands willing to prioritise the experience they offer – whether that’s through creating pop-up shops in unexpected locations or offering something additional in-store.

The pros of pop-up experiences

Embracing the pop-up concept can benefit smaller stores and independent retailers too. By catering to a crowd they know will be into their product and the experience, they can craft around it and reap the rewards of a prime location and high footfall – luxuries usually reserved for more established brands.

The joy of pop-up experiences can also be incorporated into existing events to give them an immersive, fun quality not found elsewhere. For example, at Barclaycard presents BST Hyde Park, alongside the all-star lineup of music acts, festivalgoers were treated to a range of interactive experiences. At this year’s event over 11,000 visitors experienced the Barclaycard Sensorium, where they could awaken their five senses by immersing themselves in colour and sound and get their taste-buds tingling.

Putting the ‘experience’ in ‘customer experience’

Generation Z’s shopping habits are proving that ‘doing’ is more appealing than ‘buying’.  That means our love affair with the High Street hasn’t fizzled out; it’s just evolved. They want to have fun, try new things and blend their digital lives with the social experience of shopping. Sometimes that can mean giving consumers something completely novel and in other cases, simply ensuring that a store’s offering is fully aligned with its online presence can make all the difference. You Gov research shows that 86% of Gen Z say their biggest frustration is finding that an item marked on a retailer’s site as ‘in stock’ is unavailable when they visit the store.

Barclaycard’s 2018 study on Gen Z’s passions, perspectives and the factors that drive their decisions revealed that they love to let loose and expand their minds with unique experiences. The function of a product is no longer enough to catch and keep their interest – brands must inject an element of fun wherever they can. For instance, eating good food is always enjoyable, but doing it in a social setting is even better. The boom of casual dining confirms it, with premium fast food chains offering a fast and informal way to experience a meal.

The smartphone will no doubt continue to disrupt consumer behaviour by ‘Uberising’ anything that has room to be made more convenient. But some things will always be about people and ‘being there’, whether it’s live music in pizza restaurants or cafes and arts events in bookshops. The habits of Gen Zedders remind us that we’ll always look for ways to get together. For High Street businesses to flourish, these get-togethers need to be exciting and surprising.