Season 2 of BoF’s hit podcast series Retail Reborn, presented by Brookfield Properties, is investigating the consumer of tomorrow, identifying the new fundamentals that will shape the lives and behaviours of both the next-generation consumer and retail landscape.
In this episode, we assess how the climate crisis and economic downturns are impacting consumer behaviour and retail practises, before addressing the new centres of wealth and income polarisation on a global scale. In the US, for example, more than 50 percent of American wealth in 2020 was held by Baby Boomers, or those born between 1946 and 1964, while Millennials held less than 10 percent, according to Harvard Business Review. In contrast, young consumers in China are powering an unprecedented level of spending as the first generation to come of age during China’s economic revolution — almost 80 percent of luxury spending in China today is by those under the age of 40.
“The notion that simply receiving an education and securing gainful employment are no longer guarantees of any level of longer-term prosperity, given the increasingly frequent global disruptions these generations have been impacted by,” says podcast host and founder of Retail Prophet, Doug Stephens. These circumstances, he says, are “forming new attitudes and behaviours but [also] given rise to new growth sectors and categories.”
The conversation goes on to analyse younger consumers’ relationship with luxury and the democratisation of consumer access to this sector, before considering the strategy behind one direct-to-consumer brand’s brick-and-mortar expansion plan post-pandemic, attuned to the next-gen consumer whose expectations far exceed those of previous generations.
Three global experts share their insights and expertise with Stephens on which cohorts of consumers will shop, shaped by their generational expectations and economic realities.
Tracy Francis is the head of consumer packaged goods and retail practises in Central and South America at McKinsey & Company. Based in the São Paulo offices, Francis is the author of the McKinsey report, ‘True Gen’: Generation Z and Its Implications for Companies, which has generated over 1.5 million views. Francis previously founded and led the company’s Latin American healthcare practice.
”Millennials and Gen-Z see the world very differently from each other. But one thing that has happened for both of them was [the] 2008 global financial crisis. […] In the case of Gen Z, what that created was a desire to actually be meaningfully employed, and fomented a view of the world which is much less disruptive and much more cooperative with the institutions.”
Erwan Rambourg is a luxury and sporting goods analyst and author of The Bling Dynasty: Why The Reign of Chinese Luxury Shoppers Has Only Just Begun, and Future Luxe: What’s Ahead for the Business of Luxury. A former marketing manager at LVMH and Richemont in the early 2000s, Rambourg is a regular contributor to the Wall Street Journal, Financial Times, CNBC and Bloomberg.
”The future is really about mainland China and, to a certain extent, the up-and-coming American consumer. You have to take into account values that might be different. Typically, if you’re looking at a European consumer, she has been exposed for ages to these goods and she probably lives in a country — whether it’s France, the UK, Spain or Italy — where you’ve had an aristocratic history. In the US, it’s completely different.”
Sandy Gilsenan is senior vice president of retail at Warby Parker, which she joined in 2018. Gilsenan oversees all retail operations as well as the expansion of vision services. Prior to Warby Parker, Gilsenan was the senior vice president of North America for Sweaty Betty and spent 14 years at J.Crew as vice president of store operations.
“It’s painful to come to a retail store. It can be inconvenient, except for those people that really like to shop. So we really consider what customer feedback does to help us to make critical decisions around our brick-and-mortar business.”
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