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Millennials love department stores – but what about Gen Z?

Woman looks in a department store window

While Millennials are flocking to John Lewis and Debenhams, Gen Zs are getting their shopping fixes elsewhere. What can department stores do to reengage this crucial young demographic?

There’s no doubt about it – department stores are embedded in our national consciousness. We all have memories of seemingly-endless escalators leading to floors packed with beauty, fashion, food & drink and homewares. From the standalone glamour of London’s Harrods to the nationwide convenience of Debenhams and John Lewis, there’s no denying that they’re part of our history. But are they part of our future?

For experience-loving Millenials and multi-tasking Gen X-ers, the department store is a haven. For the former, it’s the ultimate foray into experiential retail, a chance to embody a lifestyle while picking up a new coffee machine. For Gen X, it arguably presents more opportunities to speak to a real-life sales assistant than any other store format.

A department store escalator

For their children – digitally-native, convenience-motivated Gen Zs – department stores represent something slightly different. Make no mistake – Gen Z still loves experiential retail, and often mix and match online shopping with visits to in-store locations. But with a new generation comes new habits – and most people born after 1997 have experienced the boom in online marketplaces. 

Are marketplaces the new department stores?

This month, Student Beans launched our Youth Brand Affinity Tracker. We polled over 677 young people to create a snapshot of their affinity to some of the biggest names across multiple verticals.

Within the retail section, Amazon, eBay and Argos came out on top. This is consistent with our Student Shopping Report from earlier this year – the top place for Gen Zs to go when they want to buy something is a website selling multiple brands.

Some T shirts

 Department store brands – such as John Lewis and Debenhams – ranked slightly lower in our Brand Affinity Tracker, although students were aware of both brands. While 64% of young people have bought from Amazon within the past three months, just 11% have bought from Debhenams within the same time period.

There’s a lot we can take from Gen Z’s apparent love affair with online marketplaces. The group products from infinite verticals all in one place; they allow for multiple purchase types in one sitting; and they often act as a conduit for young people to access brands they trust and recognise. Marketplaces are like virtual department stores – infinite digital floors packing every conceivable purchase into one place. 

The endless pull of the department store

If convenience was the only factor to consider in the Gen Z shopping experience, Amazon would win every time. But it isn’t. Trust, ethics and quality are floating around in their heads with every purchase they make. What’s more, students’ priorities shift depending on what they’re buying. When students shop for fashion or tech, for example, their top priority is quality – but when it comes to food and drink, affordability is their top priority. Brand trust often comes in a close second – one-fifth of students say it’s their top priority when buying fashion, and 27% list it as a top priority when buying health and beauty.

In this sense, department stores have something that no e-commerce marketplace can recreate. The in-person shopping experience is the ultimate way for shoppers to try before they buy – and get to know the quality of the product before it arrives home with them.

A girl browses a row of shops

As easy as it is to pit department stores against online marketplaces, it’s crucial to understand that most Gen Z shoppers simply don’t work this way. For the same reason why they like chopping and changing between shopping verticals, they’ll likely always enjoy a healthy mix of online shopping and hitting the stores. But to accommodate these digital natives, there are a few ways department stores need to evolve.

How to become a Gen Z-friendly department store

Endorse brands that they love. However much they love a bargain, Gen Z are leading the way in championing brands with higher AOVs. Think luxury fashion, ethical beauty and student-friendly homewares – all are unlikely Gen Z staples.

Embrace the digital. Gen Z is an anxious generation, and they’re taking the pandemic more seriously than most. While this means you might not catch them instore any time soon, you’ll always find them online. Check out the platforms that they’re native to, and consider how a paid social or display ad campaign could elevate your brand.

Incentivise them. Whatever they’re buying, students are always going to prioritise affordability. Stay ahead of the online competition with a lucrative student discount – and don’t forget to boost it during key spending periods.

To stay ahead of the competition, you have to know who they are. Access our Brand Affinity Tracker to see where your brand sits among your key competitors. 

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