On Wednesday, Cowen released the findings of a survey on how Gen Z and millennials are driving the shift in spending power, with the COVID-19 pandemic further dividing shopping preferences and attitudes among generational cohorts. The Final Round breaks down which companies are the winners amid this generational shift in shopping trends.
JEN ROGERS: Welcome back to "The Final Round." This is our call of the day. It is a deep dive from Cowen on how Gen Z and millennials are the driving force in scaling digital and sustainability. OK, this thing is 142 pages.
The takeaways are that all of these people are moving to the suburbs. They like to know where their food comes from. And they like to buy used clothes. And they don't trust CNN or Fox.
Melody Hahm, what am I supposed to do with this information? I feel like Amazon was mentioned the most in here. Like, that, to me, I was like, OK, they're all going to shop at Amazon. But they had all these other tickers in there. What did you make of it?
MELODY HAHM: What I have to say, Jen, is this sort of hearkens back to an HBS report in 2017. And Rick Newman and I actually had a very robust debate about this of, what is the purpose of calling someone a millennial? Because a 31-year-old in Oklahoma and a 31-year-old in the suburbs of New York are not the same demographic, right? It just blatantly is comparing apples to oranges.
So to really lump this 18 to 34-year-old bracket-- I understand they kind of parsed through some of the data-- that is particularly troublesome to me. And I think time and time again, you know, this is sort of taking a page out of Piper Sandler's notebook, right? We talked about the Teen Survey at length last week.
And I think one of the things that really interests me from this note, though, is I had no idea that the generation after Gen Z, those born after 2011, are called Gen Alpha. And those who are born-- who are going to be born in 2025 to 2039, they'll be called Gen Beta. My understanding from the "Atlantic" article was that people born during this era is, they will be called generation C, after coronavirus.
But that's neither here nor there. To your point, Jen, the overarching theme of, we get it, Amazonification, Amazonian empire, we all are sort of suckers to that system.
But at the same time, those athleisure brands like Lululemon, like VF Corp, the Nike's, the Puma's, the Champion's of the worlds, that essentially are all legacy brands, it's sort of counterintuitive, right? Because there's another section of the note that says Instagram has really lowered the barrier to entry for a lot of retail plays and for a new discovery and for shopability and some really interesting, innovative, fun, digital native brands.
But at the same time, the bottom line is, these tickers, to your point, are the ones that really resonate even with 18, 19, 20-year-olds. And I can tell you, even the brands that we see on Instagram, a lot of them are sort of re-outfitting the Champion's, right? Or vintage Nike wear or Levi's and sort of refurbishing them and putting on a little sticker or something.
And so what's old is new. What's new is old. We're all moving to the suburbs. And there's not anything particularly compelling or particularly novel about the way that we're behaving, perhaps, except spending more time on social.
DAN ROBERTS: And, guys, to play off what Melody said, what's old is new, what stood out most to me in this note, you know, you hear that this generation-- I guess it's us-- you know, they're suburbanizing, they care about sustainability, care about digital. And yet, which companies are listed that will benefit? It's old, big chains.
I mean, you mentioned, Jen, oh, you saw Amazon a lot here. Sure, but listen to this. Suburbanization theme has long tailed-- by the way, I wish Myles Udland were here because he has been obsessed with discussing the exodus from the cities and the suburbanization. But it will support leading retailers and restaurant.
And they list Dick's Sporting Goods, Target, Walmart, Restoration Hardware-- we just spoke about them two weeks ago on the surge Restoration Hardware has seen over the pandemic-- Starbucks. I mean, well, these are the kind of existing giants. And what's funny about that is, I think-- and maybe this is a wrong kind of association.
But I think that you would think that supporting digital and supporting sustainability and ESG and all that good stuff would also go hand-in-hand with supporting smaller businesses, supporting indie bookshops. Not necessarily. I don't hear much in here about independent businesses. And that's why, in some ways, this prediction in this report is a little sad to me.
I mean, I think the pandemic has-- we already know it has been a huge just destroyer of independent businesses. You know, one-off restaurants that are not chains, small businesses that are family-owned, whereas big, big, in some ways, fat and bloated, brick and mortar chains that we also thought they were in trouble because of the rush to e-commerce, are going to survive and maybe even thrive.
I mean, we've talked about how Walmart, Target, and Dick's have all seen their e-commerce sales surge during the pandemic. And this report kind of confirms that even young people are happy to buy from those big chains and that suburbanization will benefit those chains. It's just interesting, a little bit counterintuitive.
JEN ROGERS: I have to say, I actually-- I mean, I read it, and it took me away from doing a lot of other work. I liked it. Again, Melody's point, like, who is a millennial, who is the Gen Z, I wanted to know, like, geographically, where these people were from, more racial issues as well in here. I feel like there's a lot that you can tap into.
But this-- and I wish Myles were here, too, because then I wouldn't be. But if you had this suburbanization trend, everybody's moving to the suburbs. But haven't they liked some things about being in an urban city? And I think part of that, they might still like getting everything delivered.
So the bet-- they called out Kohl's and Macy's also in there maybe being able to make a turnaround in here. And I was a little bit more skeptical on that. I know, Dan, you just mentioned the Dick's, but I just see, like, the things that they could be taking with them to the suburbs might hurt a lot of these names that they're calling out.
DAN ROBERTS: Well, it's curbside and BOPUS, right, guys? I'll let Melody say more on that. But man, it's all about BOPUS, Buy Online, Pick Up in Store. And some of these chains have embraced that nice and early, rapidly in the pandemic.
MELODY HAHM: I was speaking to a former executive at Tesla yesterday. And he specifically was talking about this exodus to the suburbs that, of course, it's during a global pandemic that there's that intrigue, right? We can say that there's a good cohort that always wants to, that does want to settle down.
But this sort of-- this obsession and the way we're talking about it, I think it did-- it was birthed out of this idea that all the fun parts of the city, all the magical elements of living in a place like New York City, it's gone, right? Sure, you can have an alfresco dinner. But at the same time, is that going to sustain the rent that has not gone down, especially when all your friends have left, too?
So, again, the FOMO experience is a very real phenomenon, especially with the integration of social. And then call me fatalistic, but remember we used to question, who was Pinterest's demographic? Where are the users of Pinterest? Is it really just moms? Is it really just people who are getting married? That seems to be the case, right?
This note very much sort of highlights the fact that the older millennials are obsessed with Pinterest. Pinterest is actually their number one platform when it comes to purchasing behavior and trying to inform what's trendy, what's not, whereas the younger generation, it's still Instagram. So I do feel as though a lot of those trends that were forecasted, we're seeing come to fruition. And perhaps the data is matching the survey.
JEN ROGERS: We could do a whole segment on just the used clothing part, the Poshmark and ThreadUp and ThreadZ, RealReal part of this note. I thought that was fascinating. All the food stuff is fascinating. Lots of tickers in here if you get your hands on it. A good read. Again, Cowen our call of the day.