ICSC RECon Day 2: Survey Finds Millennials, Gen Z Would Rather Rent Than Own
Rent a ring. Or a dress. Borrow a table. Rent a sporting good.
This may be the shopping center of the future.
A JLL report released Tuesday found that a large majority of millennials and Generation Z would rather rent trendy, well-made products than actually buy and own things.
“Just imagine in the future having a different phone every week,” JLL President and CEO Retail Americas Greg Maloney said during a media panel at ICSC RECon in Las Vegas. “I don’t know [if those type of stores will work]. But those are the type of things we need to start investigating.”
JLL released a survey titled the Future of Retail on the second day of the ICSC RECon convention, the largest gathering of retail professionals in the world. JLL brought in speakers to highlight retail's growing shift from traditional brick-and-mortar to slowly incorporate experiential and innovative concepts.
The survey, conducted earlier this year, polled 1,500 male and female consumers nationwide across six generations — from Gen Z to seniors — and asked them what they wanted from their shopping centers in the future. The survey did not break down consumers by income or ethnic demographics.
The survey found several interesting tidbits:
- More than 50% of those polled want a skilled customer service person and only 7% want a robot with artificial intelligence to help them shop and check out.
- More than 62% of the participants across generations, led by 72% of millennials, want stores to remember their shopping preferences.
- Nearly 30% want malls to have some sort of family-friendly entertainment.
- Nearly 37% want stores to offer same-day delivery.
- 71% of millennials and 72% of Gen Z would rather rent a trendy and well-made product from a store than purchase it.
The poll comes as the retail industry continues to undergo a tremendous shift as it tries to adjust to the growing influence and sales from e-commerce.
A recent report by commercial real estate data company Reonomy found that retail property values are going down for the first time in years.
It is clicks vs. bricks.
But rather than discuss the state of today’s retail climate, the JLL survey and officials wanted to focus on the physical retail industry’s enormous potential in the years to come, Maloney said.
Maloney said developers can no longer rely on the old model of “build it and they will come.”
“Before, it was a developer-driven business,” Maloney said. “Today it is a consumer-driven business. If we don’t deliver for the consumer with what they want, we’re not going to achieve their sales.”
Maloney believes the shopping center of the future will be mixed-use.
The new shopping center will have a hotel, office, an entertainment venue, plenty of food options and open space — perhaps a soccer field. About 20% of the respondents in the survey expect to see a wellness center or healthcare facility in shopping centers. Nearly 38% want these centers to have healthy food and drink options.
“It’s going to be a true live, work and play center,” Maloney said.
The survey also found that technology will play a key role in the future of shopping centers. More than 26% of shoppers want technology that helps them navigate a shopping center.
JLL Americas Director of Retail Research James Cook said another interesting trend is the rise in popularity of the sharing economy.
Since millennials, those born from 1981 to 1996, and Gen Z, those born between 1995 and 2015, value experience over material goods and are aware of their impact on the environment, there could be a shift in what kind of stores will inhabit malls of the future.
Some mall stores could become a type of retail library, where people can rent clothing, technology, jewelry and other items for a price and return them at a later date.
The rent-a-product approach is not that far-fetched, Maloney said. There are already at least nine stores that allow shoppers to rent designer high-end clothing and accessories.
The survey found across the six generations that were polled, more than 57% would rather rent a trendy item than purchase and own it. And fashion retailers Rent The Runway and West Elm have teamed up to extend the rental concept to home design, according to the survey.
Maloney remembers when he heard about Amazon discussing drone deliveries several years ago.
“We all laughed at it,” Maloney said. “[But some] of these far-fetched ideas are starting to get some traction to it.”
Cook said it doesn't matter what kind of product a store or shopping center offers if it doesn't treat customers well. No tech or gizmo can replace good human interaction, he said.
The survey found that more than 50% of respondents care most about receiving quality customer service when they walk into a store.
"They just want good old fashioned customer service and a [positive] retail experience,” Cook said.