How Best Buy, Charlotte Russe, and IKEA shape their stores around the next generation of shoppers
As the next generation of shoppers takes over, Best Buy, Charlotte Russe, and IKEA are creating in-store experiences with them in mind.
Selling consumer electronics and fast fashion for young women, respectively, Best Buy and Charlotte Russe are drastically different retailers. But one thing they have in common is a strong focus on Generation Z and creating in-store experiences with that next generation of consumers in mind.
According to Barkley and FutureCast, Gen Z, which represents those born between 1995 and 2010, holds up to $143 billion in direct buying power. That’s a staggering number, considering the majority of them are minors. They’re also projected to represent more than 40% of consumers by 2020.
One thing that sets Gen Z consumers apart is their comfort with technology. They’ve grown up with smartphones and social media, and 40% of them would reportedly choose working Wi-Fi over a working bathroom.
Instagrammable moments and the Best Buy app
“Fitting rooms should be Wi-Fi-enabled because Gen Z is so interested in sharing every experience they have with their networks,” says Emily Watkins, Charlotte Russe’s SVP of Real Estate & Construction, who spoke at Worldwide Business Research’s recent Future Stores event in Seattle.
As a result, creating “Instagrammable moments” in-store is a priority for Charlotte Russe. The brand’s new flagship store in the Manhattan Mall has a staircase backlit with neon pink and “that feeling when…” written on the wall. Charlotte Russe designed this staircase with selfie-taking in mind.
Best Buy isn’t inherently as Instagrammable, but mobile is still an astronomically important component in the in-store experience.
“We’ve done a good job over the last year making the app very useful inside of the store,” says Sidd Bhaskar, Senior Product Manager for the Best Buy Technology Center’s mApp. “It automatically knows which store you’re in. Every single piece of inventory is customized for that particular store, with an accuracy rate over 99%.”
In-store influencers
Because Gen Z consumers are so tech-savvy and comfortable with online research, they’re often very involved in their parents’ purchases. Indeed, this demographic has the potential to impact more than $665 billion in family spending, according to Barkley and FutureCast.
“Because they’re able to comprehend and process digital information so well, I often find them to be the decision-makers,” says Bhaskar. “Very often, it’s the customers’ kids who ask the difficult questions and make decisions.
For Charlotte Russe, the in-store influencers are the employees. As Watkins says, “Our store associate is our customer. She often takes the job because she wants the discount.”
That passion makes sales associates built-in brand ambassadors. And unlike social media influencers, they don’t charge thousands of dollars for Instagram posts. They do it on their own; the #CRworklife hashtag on Instagram has thousands of tagged pictures, many of which are sales associates sharing their outfits.
Thinking outside the big blue box
IKEA is another company with future store decisions based on the next generation of shoppers. However, IKEA is more focused on millennials, who are far more likely to be furniture-buyers. (Although 76% Gen Z does influence family furniture purchases, according to IBM research.)
Millennials frequently flock to cities and drive less than previous generations. That means the current store model has to change for IKEA, which traditionally situated its “big blue boxes” out in the suburbs. Before the Brooklyn store opened in 2008, New York City’s nearest IKEA warehouse was in Elizabeth, New Jersey. That’s 15 miles from ClickZ’s office in the Financial District, but it takes nearly an hour and a half to get there on public transportation.
“We have an amazing product range that’s designed to meet the needs of people who live in small spaces. But our units are not where those small spaces are,” says Phil Szuch, an IKEA Project Manager, who spoke in a separate session at the conference. “Customers enjoy walking through the store and they want us to be closer to them.”
At the moment, IKEA is prioritizing stores in city centers (the first one opened in Hamburg, Germany, four years ago) which are much smaller and more vertical than usual. Szuch doesn’t think IKEA can afford not to move toward the city. “Playing it safe and not doing anything is the riskiest thing we can do,” he says.
