The retail landscape will not look like what it does today when Gen Z ages up.
At Calik Denim’s Ever Evolving Talks last month in Amsterdam, Matt Britton, a millennial and Gen Z expert and CEO of the software company Suzy, shared how Gen Z will reshape consumerism to better suit their nomadic, technology-driven lifestyles.
It’s a shift that Britton boils down to the advent of the internet. Growing up with access to the internet was the game-changer, he said. Different forms of messaging replaced phone conversations. Google replaced traditional methods of research.
“People who grew up with the internet in the household have brains that are wired differently,” Britton said.
Household internet connections instigated this evolution in consumerism that he said has created one of the biggest accumulations of wealth and disruption in retail and technology, and large companies have struggled to come to terms with this new normal.
“Their intuitive understanding and knowledge of technology is unlike anything we’ve ever seen,” Britton said. “They are the most sophisticated consumers that are insistent on facts and information and real-time understanding. They have a very large expectation for things being delivered instantly. And because of that, you really need to rethink [the Gen Z] consumer.”
Here, Britton shares three ways the cohort’s values and wants are already affecting retail, real estate and rental services.
Owning things is passé.
“This generation likes the fleet of foot. They don’t like to be tied down to a mortgage payment or any overhead that will stop them from pursuing their new version of their dreams, which doesn’t have to do with settling down,” Britton said. “It has to do with unleashing themselves.”
As a result, companies are realizing they need to create marketplaces versus transactional relationships with customers. This new mindset—access over ownership—is impacting all types of business, but Britton said it’s a win-win situation for companies and consumers. Businesses with rental models allow consumers more freedom and room to be fickle, while companies benefit from “tremendous gross margin profiles” and recurring revenue.
“If you get recurring revenue as an organization, you can scale and you can forecast out,” Britton said.
There’s a new American Dream.
The picturesque scene of a suburban home with a white picket fence, 1.7 children and two cars in the driveway is lost on Gen Z. “The action is not happening in the suburbs,” Britton said. “It’s happening in cities. Cities [are] now the world where young people imagine themselves.”
Gen Z is changing the footprint of cities. Safer streets, cleaner parks and improved educational systems are making urban areas a viable setting for Gen Z to begin their adulthoods. “Gen Z will gladly give up space and the privacy of the suburbs for community and connectivity of living in cities,” he said.
But they won’t give up speedy service. The gentrification reshaping urban enclaves is driving up the demand for delivery. “The notion is that consumers in cities with two-income households expect on-demand services,” Britton said.
Experiences are the new status symbol.
In the ’80s, ’90s and early 2000s, people represented who they were in society by the cars, houses and watches they owned. “That was the social currency,” Britton said, adding that experiences were saved for only the people who had access to your photo albums.
Social media changed that. “Now through Instagram, with over 1 billion monthly active users, experiences have created social currency that can scale,” he said. “Consumers are pursuing these experiences as a new social currency over brands.”
While luxury brands are in their heyday right now, Britton said the story may change when millennials and Gen Z get older. “I’m not sure these luxury brands are going to be what they are today because as of today, they’re catering to Gen X, an audience that still values luxury based on their upbringing,” he said.