Millennials, or the approximately 82 million Americans born between 1985 and 2000, are coming of age and changing just about every feature of the U.S. economy. Housing, jobs, investing, and even retirement are just some of the sectors being revolutionized by Gen Y. Now we can add retail to that growing list.
Millennials spend about $600 billion annually and by 2020 their retail spending is expected to hit $1.4 trillion per year—about 30% of all retail sales. Generation Y likes shopping, in fact about 58% of consumers between the ages of 18 and 33 would self-categorize as people who “love to shop.”
Sure Millennials are spending, says Deena Varshavskaya, founder and CEO of Wanelo, an online shopping community, but they’re spending differently. “Their habits are social experiences. Everything they do is online and on their phones,” she says.
The ability to connect with retailers globally and compare prices all with the click of a button is changing the power dynamic between buyer and seller, “what’s really happening is a shift of power from retailer to the consumer. Because the consumer is exposed to so many choices the retailer has no choice but to create an amazing product, set it at a great price, make it available exactly where the consumer is spending time and that’s how you win the future,” explains Varskavskaya.
The younger generation is savvy; they browse and make sure they’re getting the best deal possible. When shopping, seniors make purchases 72% of the time but Millennials only pull the trigger 57% of the time.
For Millennials it’s out with the days of the corner shop that’s open from 9-5 and closed on Sunday and in with Amazon drones dropping items on doorsteps just hours after they are ordered.
About 15% of U.S. malls will be converted into non-retail space or fail entirely within the next 10 years, according to Green Street Advisors. Retail advisor and friend of Breakout Howard Davidowitz predicts that 50% of America’s retail centers will close within the next 15 to 20 years.
“I think it’s possible that offline retail will just play a different role in the future,” says Varskavskaya. “One interesting thing that’s happening right now is ‘webrooming’ which is the opposite of showrooming where you’re window shopping offline, ‘webrooming’ is window shopping online and then coming into the store with a very specific idea of what you want to buy.” According to a 2013 Harris poll, 69% of adults have ‘webroomed.’
Millennials want convenience and they want to be informed but they also went to shop and spend money. When it comes to retail, the kids are alright.