The Hybrid Market

This is the third of a four-part series of articles by MulvannyG2 Architecture that offers marketing, store design and center development strategies to help retailers leverage Gen X’s spending peak and GenY’s rise into the next decade.

Why? Demographics point to the potential of a longer-term economic funk: GenY, while large in numbers, is youthful and won’t hit peak spending until around 2027. And GenX, at about half the size of GenY and Boomers, is known for more conservative spending habits.

It could add up to the beginning of a 17-year spending slump for retailers. To help, here’s our third idea on a shopping center development strategy.

A hybrid market integrates the ability to customize goods with elements that buck convention. It offers a cultural experience – a place for Generations X and Y to meet, get information, check each other out and customize products. Retail design and planning that nods to a hybrid market’s offbeat aesthetic should embody authenticity and community. Here are four elements a hybrid market should offer:

1. The ability to customize stuff. A commerce center driven by customization could include retail, entertainment and manufacturing components. The idea: Buy a product from a retailer – in-store or online – and have it customized by a manufacturer next door.

Similar to the idea behind “Nike ID,” this mass customized experience is built around an entire center with a tenant mix and design that are geared toward GenY’s lifestyle demographic, including the store mix and types of services offered, as well as graphics and integration of social media and technology on-site.

2. Fun elements that bust convention. Amenities and products not available at a typical lifestyle center will strengthen the appeal to GenY. How about including a dog park? A path for rollerblading? A cooking school? A vet? A clinic? A tattoo parlor? An antique store? Also offer plenty of cafés or places with free WiFi, where GenX and Gen Y can communicate via their chosen media – smartphones.

For example, McMenamin’s, a pub/hotel/movie house in greater Portland, Ore., offers an interesting mix of amenities and events for singles, DINKS (double income, no kids) and adults with kids. Enjoy dinner and drinks, then grab a hotel room for the night. Have kids? How about a raucous showing of “Toy Story,” with parents, babies and toddlers welcome?

3. Educational and cultural opportunities. For Gens X and Y, culture, not price point, is the draw. They want sales associates to talk about music and film, not the products on the rack or shelf.

They also prefer experience that offer more than just a shopping experience. Just as Lululemon has made a name for itself by offering yoga classes in-store and REI offers an adventure travel service in addition to a store full of products to purchase for that adventure, a hybrid market could offer services and educational opportunities that appeal to the community at-large. This could include trips or tours organized by the hybrid market that tie the surrounding metro area with music, film or art events.

4. Symbolism and a post-industrial aesthetic. This demographic also enjoys an element of authenticity. So a rougher aesthetic that signals something unvarnished would be more appealing than a sterile, ground-up mall in suburbia.

For instance, a project for the southern edge of Seattle could take advantage of the variety of old warehouse spaces that populate the area and are now adjacent to the city’s new light rail system. A hybrid market built here could incorporate the post-industrial aesthetic, the transportation utility and the symbolism that comes with it. Even if GenYs and Xers came by car, the accessibility to public transit is a positive signifier for them.

Gens X and Y are looking for retailers and shopping centers that offer the ability for customization, appeal to their desire for authenticity and culture and offer a quirky edge. Don’t give them “sanitized” retail environments where their parents shop. Give them something to call their own.

Cho Suzumura is a design principal at MulvannyG2 Architecture. The ideas published here will be discussed at MulvannyG2’s panel discussion at IRDC in October on “The 17-year Itch: The New Shape of Retailing for Gen X and Y.” For more information or to register for the conference, visit www.irdconline.com.