by Dan Rafter
It’s not all about the Millennials — of, if you prefer, Generation Y — but there’s no denying that these young adults are changing the world of commercial real estate.
Jone Lang LaSalle said that Millennials love change. And that has had a broad impact across several types of commercial property.
For instance, Millennials have embraced new technology, social media and collaboration in the office. This has helped create what Jones Lang LaSalle calls a “sharing” economy in the United States.
This has changed the way stores market to their consumers, how companies design and configure their work spaces and how hotels and multi-family properties are developed. It’s forced retailers to offer robust online shopping options.
According to Jones Lang LaSalle’s report, Millennials — who are generally between the ages of 18 to 34 — total about 80 million U.S. residents and spend about $600 billion each year. By 2020, these consumers are expected to be responsible for as much as $1.4 trillion in spending every year, a figure that will represent about 30 percent of total retail sales.
It’s clear, then, why retailers are so interested in meeting the needs of Millennials.
And one way retailers can nab the attention of Millennials? They can offer them bargains. Jones Lang LaSalle reports that Millennials are extremely price sensitive. These consumers rely on mobile devices to comparison shop while inside stores. They prefer dollar stores, second-hand stores and drug stores to more expensive retailers. Jones Lang LaSalle says that Millennials favor coupons, too, with 68 percent saying that coupons influence their purchase decisions.
The Cross Sector report states that Millennials love gadgets, too, and are fond of in-store kiosks. Millennials report that they are 77 percent more likely to be influenced by in-store kiosks when making buying decisions than is the average shopper.
And because Millennials love change, expect to see more retailers unveil pop-up shops. These shops appear in spaces for a short time — often based on the season — and then disappear after a month or so. Think all those Halloween shops that start opening in vacant retail locations in late September and then disappear by early November.
Millennials are having an impact on the office, too, with Jones Lang LaSalle reporting that these young adults view the office as place for people to gather, share and collaborate, not a place for individual tasks. This means that offices in the future should become more open places, with fewer employees spending their entire workdays sitting at the same desk in the same cubicle. That’s good for workers, but might be a challenge for companies used to the traditional cubicle-focused office environment.