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The In Crowd: Retail Rushes to Keep Pace with Generation Y

Every generation of teenagers is convinced it is different from the generations that came before. It has become an American rite of passage for teenagers to howl to their parents, "You just don't understand!"

Each wave of teenagers defines itself by embracing new styles in fashion and music. From Elvis mania in the 1950s to the grunge rock craze in the 1990s, each generation has sought music to rebel by. Trendy clothes, makeup and accessories - some worn to make parents grimace - are the means by which teenagers take those tentative first steps toward asserting independence.

Now, a new generation asserts, "We're different!" They're dubbed Generation Y. And this time, the kids are right: Generation Y really is unlike any generation that's preceded it.

It's not just Generation Y's love of way-baggy jeans, power beads and the Backstreet Boys that sets it apart. Thanks to the Information Age, these kids are being raised on a steady diet of Internet technology and digital wizardry that leaves many adults feeling dazed and confused. Having problems programming your new Palm Pilot? Ask a Gen Y member. Chances are the youngster will have that gizmo figured out in 10 seconds flat.

Shopping malls across the country are rushing to employ a host of innovations that will align themselves with Generation Y's very real differences.

The differences First, there's size. Generation Y, generally defined as children born from 1980 to 2000, already numbers about 72 million. By the end of the year, it could eclipse the largest generation on record - the baby boomers, who stand at 76 million. According to Teenage Research Unlimited, a Northbrook, Ill.-based research firm, teenagers currently consist of about 11% of the population, and that number is expected to balloon until 2010.

Second, there's money - and lots of it. Generation Y is growing up in the most prosperous economic boom our country has ever witnessed. As a result, many of these kids have money to burn.

"The amount of allowance these kids are getting is astronomical," says Maddy Dychtwald, a generational trends specialist with Kent-Dychtwald Inc., an Orinda, Calif.-based market research firm. "It's not unusual for kids to get $50 a week."

Indeed, according to Teenage Research Unlimited, teen spending jumped 8.5% in 1999 - to a hefty $153 billion.

Although Generation Y's ample numbers and padded cash flow stem from a convergence of economic prosperity and soaring birth rates, what truly sets Gen Ys apart is the fact that they are "wired." These kids are the first to come of age during the Information Revolution, which means they don't remember life without a personal computer. Generation Y members expect information to be tailored to their individual needs and funneled to them digitally. They expect high-tech graphics and data zooming at them at 100 mph - even when they are shopping.

These very real differences mean that Gen Ys are likely to exemplify a new breed of shopper. How exactly are shopping malls supposed to communicate with young people whose hands are permanently wedded to the computer mouse?

Attitude shifts Generation Y's outlook on life stands in sharp contrast to its predecessors, the gloom-and-doom Generation X, who became synonymous with "cynical." Gen Y is almost the complete opposite: These kids have sunny attitudes, and a growing interest in civic duty, community involvement and volunteerism.

"This tends to be a much more optimistic generation, partly because the economy is so much healthier," says generational marketing expert Claire Raines, co-author of "Twentysomething and Generations at Work: Managing the Clash of Veterans, Boomers, Xers, and Nexters in Your Workplace."

Raines notes that Gen Xers matured during an era of "latchkey children" and soaring divorce rates. Now, it's cool to be a kid again.

"We are much more family-focused as a culture than we were 15 years ago. It's just the swing of the pendulum," says Raines, who points to the plethora of infant safety products and parent advocacy groups as evidence of the new interest in children. But the pendulum may have swung too far, with parents heaping excessive amounts of attention and gifts on their children. "Some people feel this generation is being overindulged."

The advent of the personal computer has certainly indulged Generation Y's need for speed. These kids expect their desires to be filled within seconds - if not immediately.

Savvy kids But, just because Gen Ys have a feel-good attitude, don't mistake them for naive. Generation Y is one savvy group of kids, particularly when it comes to marketing campaigns. They've grown up in a media-saturated environment, with a gazillion cable TV channels, websites and e-mail spam. As a result, Gen Ys can spot a marketing ploy right away, and their first instinct is to run.

"They've developed a very thick skin to marketing efforts," says Michael Wood, vice president of Teenage Research Unlimited. "They've been marketed to their whole lives, and because of that, they've become extremely savvy consumers. It makes it very challenging to get your messages across to this group."

"Today's kids can see right through the hype," agrees Kristen Harmeling, associate director of Yankelovich Monitor, a division of the Norwalk, Conn.-based market research firm Yankelovich Partners Inc. Harmeling recommends a "straightforward, no-holds-barred" marketing approach, and notes that some traditional brands such as Levi's, Nike and Pepsi have faltered with Generation Y, in part due to marketing missteps.

Today's teens are so savvy that they even grasp a mall's strategy of locating popular teen stores at opposite ends of the mall, to encourage teens to traverse the entire mall and thus see more products. "They get it. They think, 'I get what they are trying to do. I don't really like that. Why don't they put all the stores I like together?'" says Dychtwald.

What next? If Generation Y is so savvy, how can shopping malls reach out to these kids? Tapping into their sense of community involvement is a good place to start, says Wood.

"Perhaps it's getting involved in the local community by sponsoring local causes or events. Maybe it's holding school events at the mall during off hours. Maybe it's recognizing the fact that teens need a place to go that's safe to hang out on Saturday night, so every now and then, the mall is going to hold an all-night moviethon," Wood says.

At the Mall of Georgia in Buford, Ga., a nature park, an educational center, an entertainment amphitheater and IMAX create a place that teens would like to frequent, says Ben Carter, president of Ben Carter Properties, co-developer of the mall with Indianapolis-based Simon Property Group. "To appeal to the Y Generation, we had to appeal to their value system."

Technology is another way to keep Gen Y's attention. Sure, a portion of incorporating technology into the shopping experience falls under retailer responsibilities. But Harmeling says malls themselves must also leap into the techno-action.

She recommends mall cybercafes featuring Internet connectivity, information kiosks in food courts and globally connected entertainment zones. "These are all ideas to stimulate and reflect the growing role that technology plays in our life," she says. "If you don't have a website, and it's not exciting, you're not even in the game."

Embracing technology The Macerich Co. is staying in the game with its "Know Before You Go" campaign, which hails the debut websites for each of its 54 properties in 14 states.

"We will have the whole portfolio up by April 1," says Susan Valentine, senior vice president of marketing for the Santa Monica, Calif.-based company.

The "Know Before You Go" campaign is centered on Macerich's belief that Gen Y's shopping patterns are based on instant gratification. "Their shopping trips are not going to be planned in advance. It's going to be very much, 'I saw this outfit in a video, or my friend got it, and I have to have it immediately. I don't want to wait,'" she says.

To that end, the websites are designed to make the shopping trip more efficient. "We can even tell them where to park. We have software that will tell them during the busy Christmas season that you can park in lot No. 5 - it's the fastest way to get into Abercrombie & Fitch," says Valentine.

The websites promote "preshopping" by allowing viewers to research products online before they hit the mall. Eventually, the websites will feature extras such as "the hottest selling merchandise, 10 things that kids have got to have, 10 things you need for your home, 10 hot paint colors if you are going to be painting your living or dining room," says Valentine. She notes that a Macerich study performed during the past holiday season revealed that 80% of Macerich shoppers were using the Internet to pre-shop, and then going to the mall to make the purchase.

The sites aren't presently linked to retailers, though. "The only thing we will be selling online will be gift certificates. We are not selling merchandise. We are trying to prompt a visit to the mall," Valentine says, noting that certain Macerich properties do feature kiosks with Internet connectivity.

Glimcher Realty Trust is boosting its digital connection by incorporating the Internet into the actual mall. Last fall, Glimcher debuted the I-Port, an information kiosk, at Dayton Mall in Dayton, Ohio, and at the Jersey Gardens Outlet Mall, a 1.7 million sq. ft. property in Elizabeth, N.J.

Response to the units has been fantastic, says John Hoeller, senior vice president and director of property management at the Columbus, Ohio-based company. At Jersey Gardens, he says, "we had as high as 40,000 to 50,000 hits just from October to the end of the year."

The kiosks, developed by Omnitech Corporate Solutions, are about 2 ft. by 8 ft. Two keyboards are attached to each unit, which features Internet connectivity and e-mail access. There's an interactive digital camera, so mall-goers can e-mail a digital snapshot of themselves at the mall, which is a potential worldwide promotion for the mall. The kiosks also feature a mall directory, classified ads for mall employment, banner advertisements, and coupons that can be downloaded.

Hoeller says Glimcher is finalizing plans to install the I-Ports into each of its 22 regional malls, and eventually plans to install units in its 103 commercial strip shopping centers. The kiosks are also a potential venue for purchasing, Hoeller says.

"The store pages (on the kiosk) are the same store pages you would see on the Internet. They could get on the Internet and pull up, say, The Gap's website. And if they want to make that purchase through the Internet, that's fine with me," he says. "We embrace the e-commerce side of it. We see this as an opportunity to sell more goods. Any time we can do something like that, we want to be active participants in the process."

Supporting teen volunteers The Macerich Co. also is reaching into the community with "Project Smile," an umbrella campaign in which each property facilitates community betterment. The programs, tailored to individual community needs, reach people of all generations, and appeal to Generation Y's sense of civic duty.

For example, after a spate of murders in Colorado Springs, Colo., a Macerich-owned property called The Citadel started "Streetwise," a program in which safety awareness lectures were presented in high schools, colleges and local businesses. "Streetwise" has now evolved into a community project, with 50partners in local corporations.

A recent "Project Smile" endeavor is "Volunteer 2000," in which malls host registration booths for a variety of nonprofit organizations. Macerich provides gift certificates for volunteers who work a certain number of hours.

"Volunteer 2000," which recently kicked off at Northwest Arkansas Mall, has been a hit with teens. "It was unbelievable how many teenagers participated," says Valentine.

Keep 'em entertained The Mills Corp. isn't just targeting Generation Y's retail spending. Instead, Mills is capitalizing on Gen Y's love affair with "extreme" sports by offering three indoor parks for skateboarders and inline skaters. The parks range in size from 40,000 to 60,000 sq. ft.

Mark Rivers, executive vice president of the Arlington, Va.-based company, says the parks feature "half-pipes and, literally, swimming pools without water that the kids can skate through, and street courses, jumps and ramps, and retail stores."

The first Vans Skatepark, operated by Santa Fe Springs, Calif.-based Vans Inc., opened at The Block at Orange, in Orange County, Calif., in November 1998, followed by an even larger park at Ontario Mills in Los Angeles. A new park is slated to open at Potomac Mills in Washington, D.C., in April.

Kids pay a membership fee that garners admittance for one year. The parks attract not only the Gen Y contingent, but also their parents and friends.

"In the 21st century, we see a vibe in these skateboard parks that's not much different from the vibe in Little League parks in the 1970s, where Dad and Grandma are videotaping Junior, who is doing his first 180 (a half-circle jump) on the half-pipe," Rivers says.

Mills plans to open up more skateboard parks, and may expand to other extreme sports. "We are looking at a lot, everything from mountain biking to rock climbing," Rivers says.

The Mills Corp. concept rests on an experiential mode of entertainment and shopping that has more in common with a theme park than a traditional shopping mall. Mills' projects are crammed with streetscapes, interactive architecture, IMAX theaters and cutting-edge game arcades.

Mills aims for its projects to be epicenters of community activity by offering sporting events, festivals, art fairs, concerts, and even a series of offline auctions with E-bay. The advent of the technological revolution and online shopping has only spurred the evolution of the Mills concept.

"If anything, the Internet has just caused us to accelerate our positioning in the out-of-home business as much as the shopping center business," says Rivers. "Socialization, recreation and leisure time, and the convergence of different kinds of experience, whether it's retail or dining or entertainment, is squarely where our strategies lie."

Concerts and clustering With her mega-mall tour behind the hit single "I Think We're Alone Now," teen dream Tiffany proved that the shopping mall also can serve as a legitimate concert hall. General Growth Properties is echoing a similar strategy by coordinating with record labels and musical acts to bring music to the malls. On March 23 at Southland Mall in Hayward, Calif., General Growth kicked off a 20-mall tour featuring the band Youngstown, a big hit with the many female Gen Ys, according to John Davidoff, president of Center Advertising Agency, the marketing service division of Chicago-based General Growth Properties.

Davidoff says General Growth is also experimenting with clustering teen stores together in the mall. The first experiment took place at RiverTown Crossing, a 1.2 million sq. ft. center in Grand Rapids, Mich. "Traditionally, the teen market zig-zags through the mall, with a shopping strategy that would drive any adult crazy," he says. "We took a lot of the teen-oriented stores and put them in a definitive area of the mall."

Retailers supported the clustering strategy, especially when they realized it was "centralizing the traffic," says Davidoff.

As the Internet heightens the need for convenient, easy-access shopping, the trend toward zoned shopping districts may take off. At Ridgemar, a shopping complex in Fort Worth, Texas, which is leased and managed by New York-based Shopco Advisory Corp., the entire mall is zoned into three districts - kids, sports, and arts and fashion. Within the kids district, teen stores such as Buckle, Hot Topic and Journeys are clustered together, creating a shopping zone that encourages teens to congregate.

At Glendale Galleria, a 250-store superregional in Glendale, Calif., a retail district called The Zone is being constructed to appeal to the Gen-Y shopper. An "E Station" will provide entertainment and events such as radio promotions, contests and celebrity appearances. The Zone's own Channel Z, featuring news from local schools, music videos, movie trailers, live local Xtreme sports events and updates on trends, will be broadcast throughout the shopping area.

Donahue Schriber, the mall's locally based management firm, decided to create The Zone after its market research showed that Los Angeles area Gen-Y shoppers who visit the Galleria spend between $2,700 and $3,000 per capita per year. Teen focus groups gave guidance on the design for The Zone, and an advisory group of local teens continues to provide assistance.

Family-friendly malls For Urban Retail Properties Co., teen marketing means offering the hottest stores - period.

"Our main strategy has been leasing," says Cindy Bohde, senior vice president and national director of marketing for the Chicago-based company. "At the end of the day, it's the stores and location that drive teenagers to the mall."

Urban is pushing, however, to create family-friendly malls that appeal to both younger children and their parents. After all, Generation Y includes a lot of tykes and toddlers as well.

"Children's areas are key," says Bohde. At the Fox Valley Center, a 1.2 million sq. ft. center in Aurora, Ill., part of the mall renovation plans included a 17-foot children's climbing tower that was designed by the DuPage County Children's Museum. The Roseville Galleria, slated to open in August 2000 in Sacramento, Calif., will feature a children's play area and a carousel in the food court.

Details such as kid-sized chairs in the food court, or changing stations in the restrooms are now a key part of Urban's family-friendly approach, says Bohde.

The Macerich Co. also is enhancing its family focus. In June, a new children's play area will debut at Pacific View Mall in Ventura County, Calif. The display is sponsored by a local newspaper, the Ventura County Star, and incorporates newspaper logos as climbing elements. There's a padded floor that doubles as a county map -the tykes can learn some geography while they romp.

"There will be a complimentary newspaper, so the Dads and Moms can have their coffee and grab a newspaper as they sit and watch the kids play," says Valentine.

Teen boards Long before Gen Ys were even born, the teen advisory board was a standard method for malls to enhance the teen connection. But even teen boards, which traditionally consisted of local fashion shows and makeup lessons, are changing with the times.

The year 2000 marks the debut of the Style Squad, a teen advisory board at Hudson Mall in Jersey City, N.J. The board is modeled after the 50-member Style Squad at Christiana Mall, in Newark, Del. The Style Squad concept has evolved from its inception in the late 1980s, says Moffat Welsh, regional marketing director for both malls, which are managed by PREIT-Rubin Inc., an affiliate of Pennsylvania Real Estate Investment Trust.

"Originally, we did monthly programs and they were pretty much fashion-oriented," she says. "They'd participate in a show. We'd teach them about hair, makeup and stuff that relates to that." From the Style Squad, the mall gleaned first-hand information about which fashions were cutting-edge, and which trends were, to coin a teen phrase, "so two weeks ago."

But today's Style Squad is about style and substance. "One of the things we determined was that as much as we wanted to work with them as a resource, we wanted to be able to give back to them, too. It became mutually beneficial," says Welsh.

This year's Style Squad will attend classes on job interview techniques, resume preparation and college application tips. After an underprivileged Style Squad member lost a college scholarship because she didn't understand the bureaucratic steps required just to accept the offer, Welsh was galvanized to further action.

The Style Squad has worked with the Delaware Higher Education Department to develop a website and a book that outlines the steps for college applications, and lists an array of resources for obtaining scholarships and financial aid. And, yes, the book even includes a calendar to remind students of the dates by which forms should be filed.

"We have really worked hard to try to prepare these kids," says Welsh.

To become a member of Style Squad, teens must complete an application and submit to an interview. But it's basically a formality. "It's been years since we haven't taken everybody because we learn from them as much as they can teach us," says Welsh.

Tapping into Generation Y's desire for community service is a key aspect of the brand-new Teen Advisory Board at Lake Buena Vista Factory Stores, in Orlando, Fla., which is owned by Coral Springs, Fla.-based Venture Outlet Centers Inc.

In addition to fashion shows, the 22-member board will perform monthly community service events.

"In October, we are going to try to do something with the Humane Society, and one time we might want to do alcohol awareness," says Cristina Bermudez, age 20, director of the teen board. "We want to be completely different. If it's just modeling and doing a couple of promotions, I don't think it will affect them for the rest of their lives."

The teens are compensated for promotional events with gift certificates or free outfits, and they are also putting together a petition at local schools pushing for favorite teen stores, such as Rave Girl, to join the center.

Still hangin' at the mall There certainly is no shortage of strategies for attracting Generation Y to the shopping mall. Still, some might fear that the encroaching popularity of online shopping might be an obstacle that even the smartest teen strategy cannot hurdle.

After all, Generation Y is the first batch of kids to grow up firmly entrenched in the deliver-it-to-my-door-yesterday, e-commerce mentality. If Generation Y points-and-clicks its way through everything - including shopping - then will they still be as enamored with the mall as generations past?

Not to worry. Experts agree that not even the Internet can dampen the mall's reign as a fave teen hangout.

"Kids don't go to the mall just to shop - that's secondary," says Harmeling. "They want to see their friends. Clearly, the mall is playing a role that's different from shopping."

And even technology can't supplant the mall as a teen haven for trend-spotting and socializing.

"What we've seen is that while online shopping might be filling the need to do some of that 'pre-shopping,' nothing is taking the place of that in-store experience of shopping. For a teenager it's so important to touch those garments, to feel them, to get input from the store employees," says Wood.

Still, there's no getting around the fact that technology is now a vital aspect of the shopping experience. And Generation Y will insist that this high-tech bond gets stronger and stronger.

Says Raines, "I think kids are still hanging out at the mall and probably still will. But to assure that, I think shopping malls are real smart to have cybercafes."

The first step in targeting Generation Y is selecting a name to call them. After all, "Generation Y" is but one of many labels currently in use to describe the first generation to come of age in the 21st century. Maybe in a few years, these kids will settle on just one tag for their generation. But until then, names that are being used include:

* The Digital Generation

* the Internet Generation

* the Millennials

* the Echo Boomers

* the Nintendo Generation

* Generation Next

* the Nexters

* Clickeratti

* Digerati

* Netizens

* the Wired Generation

* Generation 2000

* The Baby Boomlet

* Gen-Y

* iGen

* dot-com Generation

To find out more about Generation Y, you should know where they hang out online. Here's a sample of hot Gen Y websites: Touts itself as "the leading online network for the Internet Generation." Features four website clusters, or networks: chickclick (for girls),, (student communities), (entertainment). Features include news articles, movie and music reviews, fashion and chat. This network of sites includes a shopping portal, featuring links to dELiA*s and Droog, "buys of the week," discount shopping, polls and college webcams. This entertainment-based website features celebrity rooms and gossip, music concert clips and MP3s, and English and Spanish websites. This decidedly artsy site features poetry, cool homepages, fashion and shopping, community chats for girls, CD giveaways, advice for girls, "virtual" makeovers and book reviews.

Want to get a handle on Generation Y's spending habits? Check out these stats for a quick glimpse of the wealthiest group of teenagers ever.

Total amount of dollars spent per year for adolescents age 12 to 19:

* $153 billion in 1999

* $141 billion in 1998

* $122 billion in 1997

Percentage of teens age 12 to 19 who have shopped at a mall within the past 30 days:

* 69% in fall 1999

* 68% in fall 1998

* 72% in fall 1997

Percentage of adolescents age 12 to 19 who have shopped at a discount chain/mass merchandising store within the past 30 days:

* 78% in fall 1999

* 70% in fall 1998

* 68% in fall 1997

*In 1999, teenage girls spent about $91 per week, while teen boys spent $87. Boys spent about $60 of their own money and $27 of their parents' money per week. Girls spent $55 of their own money and $36 of their parents' money each week.

The major sources of teens' income:

* parents on an as-needed basis (53%)

* odd jobs (46%)

* gifts (46%)

* part-time jobs (32%)

* regular allowance (26%)

* full-time jobs (13%)

Source: Teenage Research Unlimited, Northbrook, Ill.

Even the savviest teen marketing strategy means nothing if the mall isn't crammed with the trendiest and most fabulous teen stores. Hot teen stores are the surest way to drive teen traffic to the mall. Experts say stores and brands such as Journeys, Buckle, Paris Blues for Girls, Mudd, Hot Topic, Rave Girl, American Eagle Outfitters and Abercrombie & Fitch are all the latest rage.

Teens face an ever-increasing range of retail choices, which makes it even more difficult to establish brand or store loyalty.

"It used to be that the big choices were a few different designer brands," says Michael Wood, vice president of Teenage Research Unlimited in Northbrook, Ill. Now, the retail market is filled with smaller niche brands vying for teens' attention, not to mention private-label brands and store brands.

Wood also notes that Generation Y teens are jump-starting the growing craze for discount chains such as Target and Wal-Mart.

The advances in digital technology also mean teens are cycling through trends at an ever-faster rate.

"It all boils down to access," says Wood. "At one time, only select groups of teens had access to the trendiest clothes. Now, because of the consolidation in retail, the Internet, and the teen media in general, they have access to just about everything. Whereas before, maybe a certain trend or style appeared on one coast and kind of worked its way across the country. Now, trends are popping up everywhere and moving through very quickly."

Here's a sample of some stores that are reaching out to Generation Y in creative ways:

* Nordstrom: Special events include offering free makeovers for middle-school girls attending a California dance. The retailer also has developed a CD-ROM targeting teens.

* Target: "We are blown away by Target - not only how well they are carrying brands, clothes and fashionable accessories that teens love, but also how they are being proactive in planning events for teens," says Wood, who recently attended a "style day" co-hosted by Target and Seventeen magazine. "There was a line a mile long of girls ready to walk through the door and attend this event."

* dELiA*s: This trendy retailer has targeted teens by directly passing out information and flyers in high schools. dELiA*s also has a strong web presence, with well-designed cross-promotions and links with hot Gen-Y websites such as and

* Zootopia: A store targeting kids age 7 to 14, Zootopia incorporates Internet kiosks into a fun, kid-oriented shopping experience.

* Virgin Megastores: This music retailer offers sound booths and interactive listening stations.

* Buckle: Featuring a huge denim selection and the latest niche brands, Buckle stays on top of the times with the "trendwatcher" section of its website, which asks GenYs to spot trends and e-mail them to the company. It's like having teenage trend spies all over the country. Teens also can read what other trendwatchers post on the site.

* Old Navy: Some Gen-Y clerks communicate by speaking into headsets. The effect: totally techno-cool.

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