The kids are alright. Even for brick-and-mortar retail.
According to a new survey by Cowen Equity Research, Gen Z and millennial consumers — i.e. emerging big spenders — are shopping in physical stores more often than the general population. And especially if retailers carry products by their favorite brands: Nike Inc. (NKE) , Calvin Klein (owned by PVH Corp. (PVH) ) and Michael Kors Holdings Ltd (KORS) .
The overwhelming majority of adults ages 18 to 35, for instance, have shopped at a physical store in the past month, according to the report. That's 74% of adults ages 18 to 24 and 77% of those ages 25 to 34 — Gen Z and millennials, respectively — compared to the total population at 72%. Gen Z and millennial consumers, in fact, are more likely to have shopped at a department store, outlet store and off-price retailer in the past 30 days than the general population.
"While we expect retail traffic to trend lower at a low-to-mid single-digit percentage rate [year over year], younger demographics value physical retail more highly than older demographics," the Cowen team wrote.
For retailers, value offered to customers preserves market share. While a strong majority of the total population all said price was the most important quality for shopping in stores, Gen Z was even more likely to seek affordability — 32% versus 28% for everyone else.
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As for what brands they're most likely to pick out, Nike is the clear winner in the sportswear category. Nearly half of all respondents in the Gen Z category cited Nike as their first choice for athletic wear, over Adidas AG (ADS) , Under Armour Inc. (UAA) , Lululemon Athletica Inc. (LULU) and all other brands. Overall, apparel is much more fragmented, though Calvin Klein and Inditex' H&M captured notable share of Gen Z shoppers (24% for both).
Despite H&M's slowing growth in recent quarters, the report indicates that the Swedish fast-fashion stalwart is still more popular than its Spanish rival, Zara. Only 4% of the general population said Zara was their first choice for fashion apparel, versus 16% for H&M.
"Our survey indicated Amazon was the clear preferred shopping destination for all verticals," the Cowen team wrote, pointing to 90% of the population between ages 18 and 54 and 82% of those over 55. About 33% of Gen Z and millennials said Amazon is where they would begin a search for a new apparel item — more than double of Alphabet Inc.'s Google (GOOGL) . And even if they end up buying an item through another channel, 44% of Gen Z and millennial shoppers say they referenced Amazon during the process.
Noted the report, "It begins and ends on Amazon for Gen Z and millennials."
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