10 Min. Read
Pixels and Bricks
Digital spaces are essential to Gen Z’s consumer journeys but, the truth is, engaging with brands via the metaverse is eliciting more eye rolls than excitement from these digital natives. That said, IRL retail holds a shockingly huge place in Zs’ hearts, according to our study. If it’s up to the next gen, the future of retail will be built by both pixels and bricks — as long as brick-and-mortar continues to deliver the IRL entertainment, inspiration, and discovery they crave.
RETAIL RESURRECTION
From middle America’s abandoned malls and blocks of empty Manhattan storefronts, to the rise (and rise and rise) of online shopping, a singular narrative has taken shape about brick-and-mortar retail: that it’s a dying breed. Of course, there’s some pretty damning evidence to back this up. Even in the innocent, pre-pandemic days of 2019, physical store closures were surging. And we don’t need to tell you what two years of lockdowns did for IRL shops. With online shopping now the norm, it’s been assumed that as the world’s first full digital natives, Gen Z would all but forget that “shopping” once involved more than tapping a finger on a screen.
But our research shows that this generation isn’t conforming to expectations. Rather than ushering in the death of IRL retail, Gen Z just might be its saving grace: 78% of Zs tell Archrival that physical stores will always have a purpose. Meanwhile, just 29% agree that physical stores will be obsolete someday, compared to 41% of Millennials — highlighting an unexpected generational divide. In fact, while 38% of Millennials say they will go to great lengths to avoid having to set foot in a store, just 22% of Zs agree. As Kaj, 20, put it, even in our digital-first vision of the future, “everyone’s still going to have to go to the store.”
Beyond just necessity, though, Zs actually like shopping IRL — and many even prefer it to buying from their digital feeds. In fact, 73% of Zs say they prefer making a purchase in-store versus 27% who prefer to do so on social media. Meanwhile, 53% say they prefer discovering products in-store over social media. But that doesn’t mean brick-and-mortars can rest on their laurels. After all, when it comes to discovering new products and brands, Zs are divided evenly: Half say they’re more open to discovery when they’re walking through a store, while the other half says it’s when they’re scrolling social media. In other words, the competition between IRL retail and TikTok is very real. Though it’s predicted that U.S. retail closures over the next few years will be less severe than anticipated, brands still need to understand that getting Zs in the door will require appealing to their unique senses.
IRL-GORITHM
As we explored in The New Consumer Mindsets trend, inspiration is fundamental to Gen Zers’ identities. And while social media offers a never-ending supply of influence and interest, Zs’ Inspire Mindset extends far beyond their screens. In fact, 74% say IRL experiences are more inspiring than digital ones, and 53% agree that “I’m being more mindful about getting offline to find inspiration outside of my algorithm.” One place they’re finding inspiration? In physical stores. Kaj, for instance, says that when he goes out to “touch grass,” he seeks out secondhand shops because “they have a plethora of things that are shuffling throughout the day.” Meanwhile, Elisa, 18, is a Target megafan — not just because it’s affordable and convenient, but because she always manages to find what she didn’t know she was looking for there. “They arrange things so well that I’m always inspired by random furniture or house décor,” she says. “It just makes me want to buy things.” In fact, for Zs, this IRL inspiration is what drives their impulse purchases. As Amaria, 22, put it, “Target is probably the only place where I will go for apples or salad or seasoning, and I’ll leave with two pairs of jeans and maybe a humidifier just because I passed by it and I said I needed it.”
This convergence of inspiration and tangibility is what Zs now expect from physical retail. Just like on social media, IRL shopping for this gen isn’t just about nuts and bolts; it’s about entertainment value too. 40% of Zs tell Archrival that physical stores should just focus on being functional, not entertaining (compared to 52% of Millennials). When asked what he wants from a physical store, Kaj, for instance, says “an experience.” Elisa takes it a step further: “I feel like we really gravitate towards the photo-op places.” While “Instagrammable” emporiums may feel like a page pulled from a Millennial handbook circa 2014, the truth is that Zs do see IRL retail as an opportunity to feed their feeds — just in a slightly less picture-perfect way, perhaps. 63% say they prefer shopping at a huge megastore with lots of products rather than the small, sleek (and Instagrammable) showrooms that catered to Millennials. For Zs, experience trumps aesthetics: 36% say they’d be excited for unique in-store events, such as live music, influencer meet-and-greets, pop-up shops, and more. We’ll dive deeper into how IRL events can drive brand affinity among this generation in our next trend, Brands With Benefits. But for now, we’ll leave you with these words from Lucy Maguire, senior trends editor at Vogue Business: “With physical retail locations, the brands getting it right are the ones creating a hub that feels like a landmark that people have to visit.”
THE ANTIVERSE
Though Zs still clearly see value in IRL shopping, the metaverse has been sold to marketers as the next frontier of retail for this digital-first gen. Big brands made major investments in the space, from Gucci to Walmart to Nike and beyond. And, lest we forget, Facebook bet so big on the virtual world that it’s fully rebranded to Meta. Before AI stole some of its hype — and brands from Disney to Microsoft shuttered their metaverse shops — McKinsey forecast that the metaverse would be worth $5 trillion by 2030.
We’re here to confirm: The metaverse probably doesn’t deserve its mega-hype. According to our research, Zs don’t give a shit about the metaverse. 42% of Zs tell Archrival that the metaverse is a fad, and 43% agree that “the idea of the metaverse makes me cringe.” In fact, when it comes to shopping, it’s Millennials that want to peruse the virtual aisles: 53% of Millennials say the metaverse is the future of shopping and retail compared to 31% of Zs. Meanwhile, 37% of Millennials agree that “I would rather shop in a virtual store (e.g. in the metaverse) than in a physical one,” versus just 22% of the younger gen. For Zs, the metaverse is a glorified gaming space — if even that. When asked if any brand experience would entice him into the metaverse, Kaj replied, “not that I can think of. To me, it’s just like an adult Roblox.” Amaria, meanwhile, made Zs’ feelings on the fad crystal clear: “I don’t even know what that is. Is that the Facebook?” Sorry, Zuckerberg.
This isn’t to say the metaverse doesn’t hold some potential for brands. After all, in late 2020, 2 million 13- to 16-year-olds spent 5 million hours a day on Roblox alone, according to the company. And metaverse enthusiasts are opening their pixelated wallets for some branded virtual goods. But that doesn’t mean brands should be putting their full marketing budgets into the metaverse. In other words, based on what we heard from Zs in our study, our metaverse playbook consists of just three words: Don’t do it.
What it means for brands
Don’t count out brick-and-mortar. While headlines have touted the end of retail for going on a decade, Gen Zs like physical retail and believe it’s here to stay. IRL stores — updated to reach the next gen — should remain a long-term part of brands’ omnichannel approach.
Target both of Zs’ consumer mindsets: the Inspire Mindset and Inquire Mindset. Brick-and-mortar retail remains unmatched in “try before you buy” experiences, but this gen wants stores to inspire them too. Introduction to new products, playful merchandising, and in-store experiences will drive both impulse purchases and overall brand love among Zs.
Invest in the spaces where Zs actually are. Zs might not be roving around metaverse lands, but they are playing Roblox, Fortnite, and the like. If your brand is able to engage and interact with consumers in the game space, go all in on it.
