Physical retail will long be gone by 2050. That’s in our lifetime! Legacy institutions such as high retail rents and the operational cost of running stores will certainly play their part in this demise, but the instrumental blow will be the future generations’ interest in real shops and shopping. It is very possible that the next two generations, Alpha and Beta, will be the last of their kind before an explosion in artificial intelligence and virtual experience that rapidly reduce interest in physical stores and products. But just as profoundly, Boomers, Gen X, Y and Z might well be the last consumer generations to place any value on real shops and stores.
Generations that shop is a series of six short articles that aim to explore and consider what opportunities remain for brands and retailers to maximise the shopping landscape now and for the relatively short-term future.
The ‘open source’ generation.
Generation Beta are those to be born from 2025 onwards. So, it makes it a challenge to forecast exactly how they will shop and consume goods and services, but there are many consistent, economic indicators to help us make strong predictions. Gen Beta will be the children of Gen Z, who so far, we know are creative thinkers, least loyal of all generations and heavily conservative when it comes to price sensitivity and money matters. Although the world population is predicted to reach 10 billion by 2050, Gen Beta are predicted to be a smaller group compared to the 2 billion Alphas currently expected to 2025. This prediction is drawn from Gen Z’s preferences towards having a family. Over 50% of Gen Zers said that children would come later in life for them, pushing into their mid-thirties with predictions suggesting that 40% will be ‘single child’ households.
Gen Beta will not become prime consumers until 2045, by then they will have to deal with some startling changes globally. I have commented throughout this series of short stories on generations living with advancing technologies, who latterly become native to digital influence. Gen Betas will grow up in a world when connectivity will be ubiquitous with 98% of the global population having access to the internet. Gen Betas will also be surrounded by at least two previous generations of digital natives. This alone will catapult their existence well beyond having to define digital at all. Almost all experiences in life will be provided by technologies represented in digital and DATA form but will feel real and physical to them.
Gen Beta will grow as consumers in a world acutely aware of the impact every purchase has on their own and the wider environment. Today, this concept still feels hard to reach, but the current young Gen Alpha will help create powerful branded political ecosystems and undisputable demands on world corporations and communities that Gen Beta will adapt as ‘daily normal’, just as we do our mobile phones today. Gen Beta will live with green energy providing the majority of world sources, and today’s fossil fuels rapidly diminishing. Electric fuelled travel, automated vehicles and advanced community travel schemes will replace ‘car ownership’ and bring new challenges to our concepts of retail and entertainment when travelling or using transport.
Advancing technologies will open up the world of convenience for Gen Beta. As with Gen Alpha, Betas will expect ‘experience on demand’. Perhaps, most importantly the Beta generation will demand brands to perform as ‘open source APIs’. Brands will be forced to relinquish control of how its own ecosystem performs on an individual level, enable their consumers to re-write and change how the brand fits into their life.
Greater levels of ‘experience on demand’ will come at the cost of personal DATA. The more convenience required the more collaborative with their DATA the user will need to be. Privacy will have to take a back seat in receipt of greater, more collaborative services.
Betas will want brands on their own terms, co-create ‘at will’, leaving brands to become experience platforms on a one-to-one level. Marketing will have to contend with adaptive AI responding to users, creating their personal expectations of brand experience in real time.
Many Betas will grow up to see their parents lose their jobs to automated forms of workers. They’ll see those same parents spend their savings on ground-breaking surgery that extends their lives using the marvel of lab grown body parts on demand. Every aspect of life around them will be DATA currency, obtainable and ownable. Deep, virtual experiences will make most material objects of desire unnecessary, and ‘pay day’ will largely be utilised to access more DATA, more experiences and more free time.
So, what will come of real stores and physical purchases? Statistically, year on year, physical retailing and shopping is shrinking (down 32% in the past 7 years) as generations come on stream as consumers. We have seen through the eyes of Gen X and Alphas, that real shops fail to reach their expectations, and instead they turn to devices for entertainment and convenience. The forecast from these statistics suggest that Betas will consider physical stores as a ‘yesteryear’ concept, a place for the older generations to catch up, drink coffee and queue.
Perhaps, in the context of shopping, we will think of them as the ‘DATA day’ generation. Shopping will not be simply to attain products or objects, but the opportunity to access a deeper and richer way of life through the availability of greater DATA experiences.
This series of 6 short stories on the current living generations and Beta, the next to come, illustrates a simple, but powerful concept – Advancing technology and marketing are merely a bi-product of generational change. The determination to live life that bit better than the last year, and the power of peer-to-peer cooperation to change, to want, to need, fuels innovation and progress. Each generation actively leaves something behind from the last and proactively passes new on to the next. When it comes to shopping, our desires to want, need, and obtain rarely changes, but the methods, diversity and propensity mutate by each generation.
By Martin Fawcett, Managing Director, The Shopper Agency