Gen Z and the Retail Revolution

No, that’s not the name of a new rock band from across the pond. Rather it’s a description of what is happening in the world of retail these days, or should I say this decade. Yes, there is a retail revolution taking place and it’s something that we are all involved with no matter what letter is used to describe your GEN-eration—Z, X, Y or BB (that’s me, ha ha).

As the generations change, a massive retail revolution is occurring. Here's why the old retailers are closing and the new retailers are technology-driven.

Generation Z shoppers are a force to be reckoned with and are now a major influence on the retail market.

Generation Z (or Gen Z) is the demographic age that arrived after the Millennials (Gen Y). Demographers and researchers typically use the mid-1990s to late-2000s as birth years. That makes them somewhere between age 10 and 25 years old about now. Most of Generation Z have used the internet since birth and are comfortable with technology and social media. They really know no other way. That’s the reason for today’s post about Gen Z and the retail revolution and how it is affecting everyone!

Old Retailers Do Die, They Don’t Just Fade Away

If you are too young to remember General Douglas MacArthur saying the original form of that (referring to “old soldiers never dying”) back in the 1950s, I forgive you. I don’t actually remember it either, but I have read it so I have applied it here to the aging world of retailing that I grew up with. You know the kind I am talking about. The mall with a zillion stores like Sears, K-Mart, and all of the rest of the laundry list that has filled my work life and consumer spending life for the past 70 years.

If you aren’t quite at the point I am right now, you are probably still a little bit surprised at how the retail landscape is changing. And it’s changing at a pace we have never quite seen before. Does it please you? The world of retail is changing and the old way has to change or die.

If it feels like retailers are rushing to close stores, you would not be wrong. It may feel like there’s a rush to empty out retail space all of a sudden, but this situation has been building for a long time.

Remember When?

Not that long ago there was a time when teens would just “hang” at the mall, kill time, play a few video games, grab some food at the food court, and that was a great Saturday night. Not anymore.

Retail stores used to be places where merchants would assemble an array of products they’ve selected for their consumers. That was important because consumers had nowhere else where they could see such a broad spectrum of products.

Everyone now has all the selection they could want on their phone and the original idea of the mall is obsolete. Every major e-retailer now competes with mall stores online with their own app and websites.

As smartphone penetration and internet use has increased, the importance of retail stores has declined dramatically. Just think Amazon

Where Did They Go?

Many of your “best friends” are disappearing as big retailers are closing multiple stores. Names you know and love like Payless Shoes, J.C. Penney, Macy’s, Sears and K-Mart, Abercrombie & Fitch, and The Limited just to name a few.

I have worked for several companies that were big in the 70s, 80s and 90s and no longer exist today. It’s due to the ever-changing demands of the ever-changing consumer and technology. Would you believe that I worked for a large 8-store chain of department stores in the late 1970s that didn’t use electric or electronic cash registers? They used a manual cash drawer instead (they also used elevators that were operated by actual elevator operators, too!). Is it any wonder that they didn’t make it into the 1980s?

The Mystery of the “Next” Generation

Every few years, marketers must come to grips with the fact that they don’t fully understand the motivations of the next new generation that’s growing up and assuming more spending power. Although Gen Z has been on the radar for a few years now, organizations are still trying to figure out who they are, how they work and live, and what they really want from their shopping experiences.

Economic prognosticators have been predicting the death of department stores for generations, only to be proven wrong. These days, though, the doomsayers have numbers on their side. Department stores had $150 billion in total sales in 2018, down from $230 billion in 1999. And big brands like Kohl’s, Macy’s, J.C. Penney, and Sears are coming off a downright awful holiday season where each reported lower sales than they’d reported the previous year—even as retail sales overall were rising sharply.

It’s a New World for Us All: The Retail Revolution

Gen Z already makes up 25% of the U.S. population, so it’s smart for any retailer to update their stores with what Gen Z wants. This means implementing new innovative technologies in stores such as smartphone self-checkout, interactive shopping screens, and virtual try-on for apparel.

It makes going to the store an interactive, fun experience—which is the only way to draw in the generation that’s grown up with instant access to everything, from films to social media, Gen Z.

If you are adapting to the tech, then you just need a little practice to get the hang of all the apps out there and the use of your smartphone and computer for shopping discounts and accessing new ways to be environmentally friendly and save money, too.

I suppose that the cost of goods and the entire retail shopping experience has saved money in the long term because once the tech becomes part of the system (and those costs are absorbed), it eliminates other costs like the people factor from the equation. Imagine a future world where you just say “Alexa, order me the size 6 sandals from Amazon that I like”. It’s here now.

What Consumers Want Has Changed

When Baby Boomers were in their high purchasing years, they wanted products that were mass made, commercial, global, generic, prestigious, and status-oriented, and that just won’t work anymore. Gen Z consumers want products that are local, ethically made, and use fair salaries paid to everyone in the supply chain. They are also into environmentally-friendly items, artisan crafts, authenticity, and “The Experience”.

I have noticed frequent “décor changes” in shopping environments these days and even wondered to myself “why, this place looked pretty good to me?” The answer is becoming clearer to me now that I factor in Gen Z and how these environments are designed to adapt to their demands. It’s all part of the retail revolution.

The Problems That Old Retailers Face Are Huge and Here’s Why

It’s very hard to change from one form of retail, what Boomers like me are used to and like, to what Gen Z consumers want today. For a big organization, it’s almost impossible.

It’s not the products that make it hard, it’s the culture. If you’ve built a big organization that knows how to sell products one way, changing to another way is almost impossible. The corporations are just like me, they find it hard to adapt to change the things they know and love best.

What Do They Need to Do to Survive?

Technology companies all have attributes like being fast to react to something even if it means failure and then move on quickly. They’re built to keep on learning, not to maintain. They do it first and ask for forgiveness later. They always network and move forward. In order to be a big success, you have to be a risk taker.

Traditional retailers never risk failure. They have to be perfect the first time out of the box. They try to force you to think like them instead of the other way around. And they believe they know better than you do when it comes to what you really want.

Traditional retailers go through “corporate” to always get permission before acting and never act on an impulse the way technology companies do. They believe exclusivity insures their successes. Explain that to those companies who thought it would work for them and no longer exist.

Squaring these different approaches is hard and culturally it’s virtually impossible. Consumer product companies that are digital now have a big advantage over the older retailers who have older approaches. One thing that means is that we’re going to see more store closings coming even faster down the pike, so stay tuned.

Final Thoughts

It is true that as we age we spend less and less on the consumer wants of fashion and toys. That’s even truer for a retiree like me. The trends are always forced by the “next generation” that is the driver of the spending and economics of the society. As they grow and spend, the retail world changes and adjusts. Its major difference now is the technologies that have factored in the change. If you want to jump into this pool, then you need to know how to swim—or you just may sink!

If you are on the side of the curve where consumer spending isn’t your recreational preoccupation, you may be able to just sit back and enjoy the changes from the sidelines with a pretty good front row seat.

Is the mall fast becoming a retail museum? Do you shop at the mall at all these days? Where and how do you shop and how dependent are you on technology? Is online shopping from clothes to furniture to groceries the way to do it now? Has the retail revolution already happened?


  1. Holly

    I always enjoy your posts about retail. Having never liked browsing at malls or shopping as a past time, online shopping is perfect for me, but also dangerous. Ads target what I like and it’s harder for me to resist impulse buys when you can click & buy something right from the comfort of your couch. Easy to look up your favourite retailers from your screen and see what’s new. Though the first couple times I made an online purchase, my millennial daughter had to help me lol. I was just reading this week how Victoria Secret has had to cancel their annual fashion show due to poor ratings last year, and they’ve recently hired their first transgender model (what took so long?). It’s changes like this that may appeal to the younger shoppers, or perhaps they’ve waited too late & have lost them already. Sears has closed in Canada. Their website was the worst! They had the hardest time transitioning from catalog shopping to online shopping, and they didn’t move fast enough.

    1. Like you, Holly, I have made the adjustment to the reality of online shopping and the changes in the retail landscape. Call me old fashioned if you must, but I still do like the hands-on, touchy-feely aspect of buying something and seeing it in person. I can’t tell you how many things I’ve sent back (and my wife as well) after we receive them, but I guess as long as they’re going to pay for the shipping (if they do), it’s a no harm, no foul. The bottom line is I guess we all will have to make these adjustments whether we like them or not. They do have some pluses which you hit on. I really appreciate your comments, and thanks for being a loyal reader.

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