By Jessica Branch, Franklin Street
Throughout history, new generations have come along
with fresh attitudes and expectations that differ from those of previous
generations. By taking a deeper dive into the demographics and psychographics of
Generation Z, retailers can alter the way they utilize their brick and mortar
locations and the function of these stores in driving overall sales.
Gen Z is increasing demand for experience and thought leadership within Atlanta’s
fast-growing retail scene. These digital-age youths, who are quickly on track
to become the largest generation of consumers, have traits that are a
combination of those from previous generations. Most importantly, they are heavily
influenced by technology, especially when it comes to retail shopping.
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Consumers
in this generation have a deep appreciation for brands with which they can
interact, relate and contribute. Gen Z cares genuinely about product quality, product
availability, store ambiance and shopping experience. They love collaborative
environments and customer engagement. Gen Z includes many college students or
recent graduates and they are an emerging presence in the local consumer market.
In 2017, NerdWallet ranked Atlanta as one of the top 10 cities for graduates due
to the abundance of jobs in high tech and the reasonable cost of living.
Atlanta ranks among the top 20 metro areas in the U.S. for manufacturing jobs,
making it easier for both headquarters and startups to do business in the
market because the city is an entrepreneurial hub for more than 1,000 tech
startups. Atlanta retailers are adapting to this new reality, which has caused
landlords to grow more receptive towards short-term leases (or pop-up shops) to
activate many of the projects around the town. Retailers are changing their
approach to creating community-oriented spaces where customers want to gather
and hang out, such as food halls and brand collaborations.
Meanwhile, the city’s mall owners are focusing on leasing former big-box anchor
stores with entertainment concepts and coworking spaces to create a demand for these
consumers. By thinking about what attracts Gen Z, owners are leasing newly
renovated and demised spaces to unique interactive users, coworking spaces and
chef-driven restaurant spots to create a new, fresh and memorable destination.
We have seen more mixed-use projects develop across the city that incorporate “live,
work and play” all in one place. A developing example is the $55 million Georgia
World Congress Center expansion that will add 1 million square feet of exhibit
space, various new restaurant concepts and a luxury hotel opening in 2021. In
these situations, the effort is to create a more unique shopping and entertainment
experience for locals and tourists.
Some of the key variables we look for when identifying
opportunities for retailers that strive to capture this new generation are:
- Highly
trafficked areas with dense residential and daytime population; - Level
of walkability and access to mass transit, such as bus, rail or even new
technology like Bird scooters; - Projects
that bring new concepts and amenities to areas that are rapidly growing and
attractive to young professionals; and - Markets
that capture both daytime and nightlife customers.
In conclusion, one size will not fit all in Atlanta’s
real estate market, and supply will need to match this rapidly changing demand.
Gen Z’ers, with an ingrained affiliation toward social media, are going to
change the world to their liking, so retailers need to shape their strategies
accordingly in order to capture their spending habits.
Jessica Branch is a Senior Associate with
Franklin Street’s Retail Tenant Services
team focusing on tenant representation in Atlanta and working with a variety of
commercial real estate owners and developers. Branch specializes in
retail/restaurant leasing and site selection for local, regional and national
retail clients. In addition, she is a board member of the Young Atlanta Real
Estate Alliance.
