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A new Generation Z shopping pattern highlighted by the Wall Street Journal shows younger consumers returning to physical retail. Data from Circana indicates that 62% of Gen Z general merchandise purchases occur in stores, significantly higher than older age groups. The shift is prompting mall owners like Macerich to redesign properties and attract digitally native brands opening physical locations. While the trend supports foot traffic and leasing in top malls, it does not reverse the structural decline of weaker retail centers.
➤ SIGNAL
A generation raised on smartphones and online shopping is unexpectedly driving new traffic to physical retail. According to Circana, shoppers aged 18–24 made 62% of their general merchandise purchases in stores in 2025, compared with 52% among consumers over 25.
The trend is gaining attention because it contradicts the long-standing assumption that younger consumers would shift entirely toward e-commerce.
Retail spending power is also expanding quickly. Research from NielsenIQ projects Gen Z global retail spending will exceed $12 trillion annually by 2030, making the demographic increasingly influential for retailers and landlords.
Mall owners are responding by reshaping properties around social and experiential uses. Macerich, one of the largest U.S. mall operators, is redesigning common areas to be more social-media friendly while targeting online-native brands that are now expanding into physical retail.
Several brands illustrate the shift. Edited, which began as an online retailer in 2021, now operates 11 stores and plans to open 14 more this year. Meanwhile, Tapestry, the parent company of Coach and Kate Spade, reported double-digit in-store sales growth, largely driven by Gen Z customers. Apparel retailer Pacsun even expanded its store count in 2025 for the first time in nearly two decades.
The real estate implication is nuanced. Increased in-store purchasing among younger consumers can support foot traffic, tenant sales, and leasing activity in high-quality malls that function as social destinations. These centers often combine retail with food, entertainment, and experience-driven uses, which aligns well with Gen Z’s preference for shopping as a social activity.
However, this trend primarily benefits top-tier retail assets. Class-A malls in strong markets are capturing the renewed interest, while weaker regional malls without strong brands, redevelopment capital, or experiential components remain vulnerable to vacancy and repositioning.
In other words, Gen Z is not reviving malls broadly—it is reinforcing the “flight to quality” that has been shaping retail real estate for years.
Key Takeaway
Gen Z’s preference for in-store shopping is helping drive traffic and tenant demand in high-quality malls, particularly those built around social experiences and strong brands. But the trend does not change the broader structure of retail real estate. It strengthens top-tier experiential malls while doing little to stabilize struggling secondary centers.
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