The generation that is technologically 'Connected', 'Creativity' focused and driven on 'Collaboration', has arrived and is here to stay. This 15-35 year old cohort must be represented and understood for brick & mortar businesses to be successful and survive in the future. The prevalence of social media platforms and the accessibility they have has inspired this consistent drive to stay virtually connected. The most utilized social media platforms happen to also be free which makes their usage that much more prevalent, especially with Generation C (Gen-C). Being connected through technology is now vital for businesse success and growth because Gen-C has $200 billion in purchasing power and they want to know a businesses story before they decide to buy.
Brick & mortar retail isn’t dead amongst Gen-C as long as the consumer is educated on why they should visit via the Internet. If it is difficult to find a business on Google Maps, if a business has more bad reviews than good reviews and if a business doesn’t have a mobile friendly site, an important portion of profit from this generation will be lost. Brand loyalty exists within this demographic but they want authenticity, originality and philanthropy. Gen-C wants to be connected and feel connected with a business through social media and they want to really understand a brand's purpose. Examples include crafting and manufacturing in the same location you are selling; this could mean the same building, the same city, the same state or the same country. In respect to food and beverage, examples include coffee shops that also roast coffee on site or source it locally, craft breweries/distilleries that manufacture on site or source product locally, and craft burger and fast casual joints that aim for farm-to-table whenever feasible. Multi-use real estate is also gaining popularity in regard to shared retail space and shared office space. Companies like WeWork and ShareDesk are capitalizing and shaping this current shared office space trend. Also, having to drive to multiple big box stores is not idealistic for Gen-C and companies like CVS and Target are responding by placing CVS Pharmacies in Target stores to create a one-stop-shop, collaborative feel.
Gen-C will gravitate to brick & mortar businesses that ‘Creatively’ maximize the amount of service that can be sold per square foot verse the amount of product that can be sold. This sounds counter-intuitive but think of it like a restaurant. The more expensive a meal is at a restaurant has a very slight correlation with food quality and alcohol, but really the customer is paying for the service. Gen-C wants to talk about where they shop, eat and hangout online with their social circle and if they experience exceptional service they will provide the best free advertising a company can receive. Service includes everything that is intangible: the customer service, the labor expertise, the location of the building, the ambiance, the purpose of the concept and the overall human experience. Maximizing products sold has already been optimized online, companies like Amazon have the algorithms and logistics that brick & mortar can no longer do daily. But what exclusively online companies can’t compete with is the in-person interaction and experience; Gen-C looks for businesses that creatively maximize this.
In May of 2015, the U.S. Department of Commerce reported that $80.3 billion dollars were spent on e-commerce in the first quarter. Although this $80.3 billion spent online only represented 7% of total retail sales, buying retail online is still a fairly new concept and this number is expected to grow. Big box stores are losing popularity and tenant synergy at strip centers is paramount now more than ever. Mixed-use development is continuing to gain popularity with Gen-C because it is environmentally friendly and it is the most feasible for urban communities to work, play and collaborate in close proximity. More than ever, a business must know and understand their "why", especially when it comes to specialty retail. Simon Sinek explained this concept of a business knowing their why (or purpose) with proven examples in his book, Start With Why. The intangible factors in commercial real estate that still remain strong with Gen-C are proximity to residential living and the positive experience associated with visit. Brick & mortar retail must focus on the intangible services that are Connected, Creative and Collaborative to capture Generation C.