• Gen Z consumers, despite growing up as digital natives, shop in stores about as much as their baby boomer grandparents do, according to a survey by the International Council of Shopping Centers.
• Up-and-coming spenders in this generation are seeking social connection, instant gratification and moments to post on social media, according to interviews with shoppers and experts.
• Mall owners and retailers are trying to cater to teens and twenty-somethings with unique store features, such as selfie mirrors or videos, and experiences such as pop-up concerts.

Editor's note: This is the second story in a three-part CNBC series about the future of U.S. shopping malls, as developers transform the spaces to add new retailers, experiences and even apartments. Read the first part here.

Whether she's buying a gift or a new outfit, Lindsey Hyams' shopping trip usually starts online.

But instead of hitting the "buy" button, the 23-year-old Marlboro, New Jersey, resident said she often heads to the mall to make her purchases.

"It's actually more convenient for me to just go to the store, try on the item," she said. "If it doesn't fit, I can just return it right then and there. You know, instead of having to go to UPS, send it back, waiting another five to seven business days."

Hyams, who works in social media and marketing, illustrates one of the traits of Gen Z that may be surprising. The tech-savvy teens and twenty-somethings of this generation shop in stores more than millennials and Gen X and about as much as their baby boomer grandparents, according to a survey by the International Council of Shopping Centers, a trade group.

Gen Z plans to shop more in stores than online this holiday season, too. Nearly 63% of Gen Z respondents said they plan to make holiday purchases at physical stores, according to an annual survey by consulting firm EY. Only about 50% said they would make purchases on retailers' websites and apps during the season, lower than any other generation besides baby boomers.

Those up-and-coming spenders — who seek social time with friends, a quicker way to get what they want, and experiences to post on social media — have become a critical market for malls, as department store anchors struggle to survive and older shoppers rely more on e-commerce. Malls have added new brands and entertainment options, such as restaurants and rock-climbing walls, as legacy players such as Macy's and JCPenney shrink and others such as Lord & Taylor and Sears have disappeared.

As those stores close, retailers are moving to appeal to younger shoppers. Australian-based online-only apparel retailer Princess Polly has opened its very first stores in U.S. shopping centers. Longtime mall staple Bath & Body Works added "scent bars" and video content to some of its locations to cater to Gen Z. And Abercrombie & Fitch-owned chain Hollister has thrown events at its stores tailored to younger consumers, including pop-up concerts and autograph signings.

Mall owners have stepped up efforts to reach Gen Z, too. Simon Property Group, the country's biggest mall owner, launched a marketing campaign this fall, titled "Meet Me @the mall." The ads, which are running on websites and apps including YouTube, TikTok and Netflix, tap into '80s nostalgia with young adults dancing and roller skating at the mall.

Another major mall owner, Brookfield Properties, has brought attractions to its malls to engage Gen Z and keep them at the mall for longer periods of time. The operator has turned to mini golfing, fresh food court offerings and hot fashion brands to bring younger shoppers to the mall. It also has had a traveling interactive art exhibit, "You Are Beautiful" by Chicago-based artist Matthew Hoffman, at different malls where people can post a sticker with their own inspirational message or affirmation.

Kevin McCrain, CEO of Brookfield Properties' retail business, said Gen Z craves unique experiences that they can share in person and through social media.

"They want to show their friends, 'Oh, I just bought this,' or 'I just ate this,' and they're Instagramming their food or their shopping experience, or where they're standing and sitting as a group together," he said. "And the best place to do that is, is the mall."

Seeking real-world experiences

Gen Z, which spans roughly from about ages 13 to 28, makes up about 20% of the U.S. population, or roughly 69 million people, according to the Annie E. Casey Foundation, a nonprofit that focuses on U.S. children and youth. The group's spending power totals about $150 billion, according to research by consulting firm McKinsey.

For some of Gen Z, the mall's appeal may be the same as in cult classic films such as "Clueless," "Fast Times at Ridgemont High" and "Mallrats," which portrayed malls as teen hangout spots.

Yet Roberta Katz, a Stanford University senior research scholar and author of "Gen Z, Explained: The Art of Living in a Digital Age," said the group's preferences have also been shaped by coming of age in a digital world.

One of the most surprising findings of her Gen Z research was a simple one: Despite growing up in a world where everything from schoolwork to dating takes place on the internet, almost every Gen Z person she surveyed or interviewed said they preferred to communicate in person.

"Gen Zers, by and large, are very much aware of how important it is to stay human in this digital age," she said. "They like to be with each other. They appreciate face-to-face and one-on-one communication. And so shopping for some of them might be an opportunity to go into a store, have a real-life experience."

Tom McGee, CEO of ICSC, said teens and twenty-somethings have also been shaped by growing up during two major crises: the Great Recession, when they saw family members or friends hit by unemployment, and the Covid-19 pandemic, when they missed out on major milestones such as going to school dances, chatting with friends in the cafeteria or living in college dorms.

McGee, a father of two Gen Z daughters, said those profound experiences continue to influence the generation's views of spending and its desire for social interaction.

"Now that those restrictions have been lifted, they really lean into that physical interaction," he said. "They missed it."

Another reason why Gen Z is heading to the mall? Instant gratification. About 30% of Gen Z consumers said they choose to buy items in person because they get them immediately, followed by 28% who said they prefer in-person shopping because they can see, touch and try the products, according to a survey of shoppers by ICSC.

Changing retailers' approach

Gen Z's interest in brick-and-mortar shopping is shaping the way stores look — and where retailers are choosing to invest.

At Abercrombie & Fitch's namesake brand, which caters more to millennials, digital sales drove 60% of revenue in the last full fiscal year. That compares with only 30% at the company's Hollister brand, which tends to attract Gen Z shoppers.

Abercrombie & Fitch Chief Operating Officer Scott Lipesky said the brand has become intentional about not only having eye-catching videos and photography online but also making sure stores are "light and bright and easy to navigate."

He said the retailer has to make sure its website and app keep up with teens who are "blurring the digital and physical world." Those customers often discover a product online through a website and social media, then come into stores to try it in person.

Shoppers are saying, "'I'm going to try them on. I'm going to feel them, I'm going to touch them. And really, does it fit me the right way?' And then they'll either buy or sometimes they go back home and buy online," Lipesky said.

He added Abercrombie has also had pop-up events at mall stores to attract shoppers, including an autograph signing with Ohio State football players at its Hollister store in Columbus, Ohio, and a concert in one of its Hollister stores in California. It also debuted a collegiate collection of sweatshirts, hoodies and tees with vintage spins on college logos, which it sells based on a mall's nearby universities.

Princess Polly, on the other hand, is a mall newcomer. The online-only retailer opened its first stores in U.S. malls after hearing from shoppers who wanted to try on and feel the brand's tops, dresses and more in person, said Courtney Dres, the company's chief merchant.

At store openings, shoppers began lining up at 4 a.m. to be some of the first people to walk in, she said.

Since Princess Polly opened its first store in Los Angeles' Westfield Century City mall in 2023, Dres said the retailer has decided to go bigger — with more square footage, additional fitting rooms and a wider selection of items such as handbags, sunglasses and jewelry.

She said Princess Polly also included store features chosen for its core customer, between ages 16 and 26. Those include mirrors scattered throughout the store for shoppers to snap selfies and LED screens that help consumers show off homecoming dresses or back-to-school outfits.

Princess Polly has opened five stores so far and has two more planned in the coming months. Almost all of the stores are in malls.

"Our customer is telling us loud and clear that they want to shop us in real life, as well as online," Dres said.

Hunting for deals

Yet some of Gen Z's favorite brands are located outside of a mall. About half of the Gen Z consumers surveyed by ICSC said they most frequently shop at discounters and off-price retailers, such as Walmart, TJ Maxx, Target and Kohl's. About a quarter of respondents said they shop at dollar stores, and 13% said they frequent thrift shops or second-hand sites such as ThredUp the most.

Compared with older generations, Gen Z shoppers also have high expectations of how brands connect their online and offline businesses.

For example, Hyams said she browses retailers' websites and saves items in an app called Locker. She collects products from her favorite stores, including Aritzia, Abercrombie, Zara and American Eagle.

Then, she likes to check whether that sweater or jumpsuit or dress is in one of the malls within a half-hour or 40-minute drive. She lives close to several major malls, including Freehold Raceway Mall and The Mall at Short Hills.

If the item is available, she often opts to drive to the mall so she can skip the waiting game, and touch, feel or try on an item before spending money on it.

The mall also brings back nostalgic feelings for Hyams. She likes to make a day of it, not only shopping at the mall with her mom, aunt or cousin, but also getting a cup of coffee, trying out a perfume and having a meal — extra stops that also benefit the shopping center owners.

She said going to the mall feels like stepping into "a small city."

"To me, it always felt like I was kind of walking into its own little town," she said. "You're getting in the parking lot. You walk into the mall and you're feeling all these little experiences and you're meeting new people."

— CNBC's Shawn Baldwin contributed to this report.