Local Retailers Have A Golden Opportunity With Younger Shoppers

According to the American Express 2024 Shop Small Impact Survey, 90 percent of Gen Z and millennials report that they have discovered new businesses while exploring their local communities. This would seem to cut against the widespread notion that younger generations live increasingly online, buried in their phones and bereft of real-life connection. Indeed, if we dig deeper, we can see that this phenomenon makes perfect sense. Young people are sending increasing signals that they crave genuine connection, a sense of community, and a feeling of being rooted in the places they live.

This presents an opportunity for local, independent retailers — one so meaningful it borders on obligation. Main street businesses were once lodestars of connected, vibrant communities, places where people shopped, gathered, and shared news and information in addition to picking up the various necessities of life from well-known proprietors.

Over the past several decades, the convenience and scale of big-box stores and online shopping have made it harder and harder for these local merchants to remain competitive. But now, the tide may be turning. Here are a few ways local businesses can answer the call of younger generations for a more authentic, rooted, personalized shopping experience — and in so doing, gain a crucial competitive advantage of their own.

Put the ‘Person’ in ‘Personalize’

One undeniable joy of shopping at a local neighborhood establishment is the feeling that a visit is about more than a simple commercial transaction. We feel that we're participating in a community, helping a local business, and partaking in the accumulated knowledge and wisdom of shopkeepers who know the rhythms of their customers. It’s a familiarity no online algorithm can match.

To win more business, local retailers should highlight these connections, emphasizing the human connection they have with their customers and amplifying the ways in which they benefit their local neighborhoods. They should get to know their customers by name, sponsor events in the community, and highlight the ways their businesses support the people around them.

Cash Plays an Important Role

Small retailers can help fill a deep need for place and rootedness that's easily lost when all commercial activity takes place online or at big-box stores. There are also steps these establishments can take to help themselves. And cash plays an important role.

Despite the rapid growth of online shopping, credit cards, and digital payment systems, retail transactions in the United States still include cash. In fact, according to our recent industry data, retailers saw a 15 percent increase in cash transactions in 2024 compared to the previous year. Backing this up, a 2023 Harris Poll study done on behalf of Credit Karma found that 69 percent of U.S. and U.K. Gen Z consumers were using cash more than the prior year. Nearly 25 percent of 18–24-year-olds are using cash for the majority of their purchases, which suggests that Gen Z is creating a shift in payment habits.

All those paper dollars changing hands create major headaches and liabilities for retailers. Fortunately, now there are technological solutions that make managing cash much simpler, safer and more seamless than in the past. Embracing this new technology will be an essential step in harnessing younger shoppers’ energy.

Economies of scale, as embodied by big-box stores and the vast distribution centers of online retailers, have defined the conversation around retail for more than two decades. But now we’re being reminded that everything isn’t just about raw dollars and cents. People crave connection and a sense of community. By meeting consumers where they are — literally — and embracing new technologies to help their businesses thrive, small, local retailers have a chance to remind the world of the value of the local.

Joe Arrage is CEO of Clip Money, Inc., the only multi-deposit self-service bank system for businesses.