I was (like many of you, I’m sure) both captivated and bothered by the GameStop saga earlier this month.
Captivated, because who doesn’t like a good David versus Goliath story? (Plus, there is something very satisfying about beating hedge fund managers at their own game.) Bothered, because while pulling off a short squeeze may be a thrilling achievement to some, many others can get hurt in the process.
What does this all have to do with home furnishings? On the surface, not a lot — unless you are Bed Bath & Beyond, which found itself caught up in the maelstrom through no fault of its own, had to watch as its stock gyrated wildly and then got downgraded by analysts worried about its prospects in the second half, all while it is working hard to turn its business around.
If you dig deeper, however, there is an element to this story that will impact the home furnishings business in the long term. Because many of the young, clever and highly motivated people who decided to thumb their noses at how business is typically done are our industry’s future customers.
Not everyone who participated in the Reddit-fueled GameStop madness was young, but there were still plenty of high school- and college-age people involved who are clearly fed up with conventional norms and who used the digital tools in which they are highly skilled to make a point (and gamble, but that’s another story). Do not underestimate this group.
As young children, Gen Z witnessed their parents struggle through the Great Recession. Now, their formative years as teenagers and young adults — and their entire school experience — have been shaped by a global pandemic. Add to that a political system that in their eyes does not work, climate change and an uncertain economic future, and you can understand why they are less than satisfied with the status quo.
But this is a generation motivated to change what they do not like and will not accept. And they are doing it on their terms. It is important to recognize what those terms (many of which are altruistic) are — they want to see ethically sourced and environmentally sound products. They believe in cause marketing. They want to see diversity in action. And they demand transparency in business transactions.
On the tech side, they won’t tolerate bad websites, and they have high expectations of what content should look like online. It goes without saying that they are digitally savvy. According to a Euromonitor survey of digital and lifestyle trends that was fielded in March 2020, virtual reality was used more than augmented reality. For those who have used AR/VR, it was mostly through video gaming, by the wide margin of more than 70%. Guess what generation is video gaming?
Although this group isn’t shopping in earnest for home furnishings yet, it will be before we know it. Let’s be prepared to meet them where they are. It is worth the investment.