How do people buy these days?

Original Article by Tom McGee

Day after day multitudes go to their town plazas and local shopping centers to purchase the goods and services they want and need. This can be anything from the weekly grocery trip to apparel shopping to a haircut, and anything you can imagine.

The median age in America is 35.3 and 74 % of the population is 18 years and older – that is a significant amount of spending power currently in the economy.

Each month adult consumers make an average of 22.5 visits to retail real estate properties. When you look at these visits holistically, you find that those visits add up to a total of 4.6B visits every month. A far cry from the retail apocalypse that has been repeatedly cited in the media.

On average, consumers visit their local mall 1.7 times, open-air centers 4.4 times and freestanding establishments 16.4 times each month. Those visits result in significant spending that averages approximately $250, $600 and $600, respectively, over the course of the month. 

Malls

Today’s mall has been designed to attract consumers through a carefully curated mix of tenants. On average, 53 percent of adults go to the mall at least two times per month. That means that nearly 8M people visit their local mall every day and this number has held strong over the past three years.

Open-Air

Open-air centers are the center of most communities. These include neighborhood centers with a grocery anchor, and centers that house big box stores that serve as an anchor for a variety of other merchants.

How do we shop?

Physical stores are where brands meet their customers and offer them what they cannot get online: human interaction. In turn, the knowledge gained from the in-person interaction allows retailers to create an even more personalized experience for the customer along the next steps in their purchasing journey.

The synergy between physical and digital retail continues to strengthen as consumers demand a seamless experience when making a purchase. In fact, what we are seeing is a retail renaissance as the industry changes to adjust to the new demands of consumers, to include both brick-and-mortar and online shopping. 

Who is shopping?

Millennials

Millennials, the oldest of whom are in their mid- to late-30s, are more inclined to spend on experience than other generations. Heavily influenced by the Great Recession in 2008 and starting families later, they are less focused on tangible goods and more focused on creating memories. That means eating out, going to the movies, seeing live music, or shows, and other experiences take priority.

The synergy between physical and digital retail continues to strengthen as consumers demand a seamless experience when making a purchase. In fact, what we are seeing is a retail renaissance as the industry changes to adjust to the new demands of consumers, to include both brick-and-mortar and online shopping. 

Gen X

Gen X are the big spenders: Despite being the smallest generation, they are the highest median wage earners ($85,000 per year), hold the largest spending power, and have an average household size of 3.2 people. Gen X is more likely than Millennials to have families, and their spending reflects that: they’re buying groceries, clothes, household wares, and other goods that a family might need far more than experiences or dining.

Baby Boomers

The generation of Post World War II babies, the Baby Boomers, may be heading toward retirement but are still active contributors to the economy. With a median income of $77,600 a year, this generation is aging out of their prime consumption years and shifting their focus from spending on their children to spending on themselves.

The Future

Finally, the future ultimately depends on the demands of Gen Z, the oldest of whom are just beginning to graduate from college. As the first digitally native generation, they also crave social interaction.   In fact, our study shows they frequently visit the mall (95 percent made and average of 8.6 visits in a three-month period). Most importantly, they don’t see physical stores going away in the next five years. Gen Z is likely to continue the trend of shopping in-store just as the generations before them have done.

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