Teens could be a saving grace for malls, new research says

Millennials may have fled the malls, but brick-and-mortar retail is clearly more appealing to Generation Z.

People born between 1997 and 2010, particularly the teens in that group, are meet big spenders, and they like to do a lot of that spending in actual stores, according to new research from commercial real chattels firm CBRE.

Generation Z’s spending is now at approximately $143 billion per year, and they influence an additional $450.5 billion in devoting by others, according to CBRE’s report, which uses data from eMarketer. While Generation Z spends a skilful deal of time online making purchasing decisions, 81% of them prefer to go to stores.

“They are huge buffs of what’s known as click and collect, meaning they click online, and they like to pick it up in the store so they can get the concrete experience, they can get the social experience, and then the key is that they are buying more. People buy up to 70% more goods when they saunter back into the store, than if they just buy it online” said Spencer Levy, chairman of Americas experiment with at CBRE.

While most teenagers are obsessed with their phones, they are also more native to technology and e-commerce than any other institution, and are therefore more open to other options.

“The teenagers prior, the millennials, had a world where they were doing both, in-store snitch oning and then they saw the new phones, and they shifted more towards that. The Gen Zers grew up in a world with both, and they liked both at the anyway time not one or the other, but both,” Levy added.

Mall REITs, which own some of the most well-located and highly see traded retail properties in the nation, are therefore changing their business models.

“While most of the discussion lately has been relating to the impact of online shopping on bricks-and-mortar stores, the mall REITs have adapted their strategies to the new consumer shopping originals,” said Calvin Schnure, senior vice president, research and economic analysis at Nareit. “This includes more occupants that provide experiences like exercise clubs, restaurants and bars, that keep shoppers coming repayment. Many REITs have also upgraded their malls to keep a fresh new feel for the space.”

Philadelphia-based PREIT solely sunk about $400 million into a redesign and rehabilitation of a downtown mall that spans three burg blocks.

Philadelphia’s brand-new Fashion District is clearly catering to teens, featuring one of the nation’s three pop-up Candytopias — a fun theatre based entirely around sugar. The three-level mall will soon open Wonderspaces, a rotating, interactive art endure that partners with artists from around the world. This is in addition to several Instagrammable art areas, a wheeling alley, movie theater and of course teen apparel stores.

“Young people, under 25 years old, are extending to be a growing demographic at our properties. That doesn’t mean that all you need to do is lease it and they will come. That’s the old design. The new strategy is pick the right kind of dining, entertainment and experience, and they will come,” said Joseph Coradino, CEO of PREIT.

The fad District was just one of three major projects in the company’s portfolio this fall. PREIT opened 700,000 accord with feet of new or remerchandised tenants, welcomed 1.6 million visitors and created 5,000-plus jobs throughout diverse stages of these projects.

“We’ve done a number of redevelopments over the past three to five years, and we’re seeing upticks in our traffic in the mid to ear-splitting single digits,” Coradino said. “That’s not to suggest that every mall is going to win. That would be halfwitted to say right now. People have said that 40% of the malls in this country are obsolete, and I’ve sold off 50% of the malls I don’t shortage to own.”

Fashion District has the benefit of a subway opening right into the mall, not to mention several high schools nearby. It also has a co-working place, perhaps keeping an eye toward millennials, even as it focuses on teens.