Sneakernomics: Social Responsibility in Sports Retail
Matt Powell, Vice President, Senior Industry Advisor ;
For some time now, there has been an investment approach around environmental, social and governance (ESG) standards. Studies have shown investing in companies that score highly on these characteristics outperform the market. The indexes used measure environmental uses and policies, corporate diversity, racial and gender diversification among executives and governing bodies, as well as human rights policies. Companies with a high score on sustainability and ethical performance tend to outperform those with low scores.
This concept of ESG is spilling over into consumer behavior, driven by Gen Z. Sports retailers and brands must pay attention to this critical change.
Gen Z is the most connected generation. They have never known a world without a smartphone. Consequently, they rely on social media for connection, communication, and commerce. They are likely to use social media to seek the opinions of their peers, not just on what is in fashion but to learn about the ethics of the brands and retailers they are considering.
They are also the most diverse generation, meaning it’s likely that as Gen Z consumers get older, they will gravitate towards brands and retailers that are more diverse, and will be more likely to withhold their business from those that are not.
Gen Z is progressive and political. They will not sit idly and hope that circumstances change. This generation is one that will likely push for change and respond more positively to those brands and retailers that follow suit.
As a generation that is out to change the world, Gen Z demands that brands take visible stands on social issues like diversity. According to a recent Forbes article, human rights is the primary cause for Gen Z, and equality is non-negotiable. Brands can no longer claim to be apolitical, and what they stand for must be transparent. If Gen Z disagrees with a company’s values, they will take their business elsewhere.
Gen Z also seeks meaning in their work, products, and brands. They value relationships above all else. This makes them both tolerant and respectful. Gen Z will demand that same tolerance and respect from their brands and retailers.
Gen Z understands that companies have a role in improving the world. They will demand that the brands and retailers invoke that role. Those that do not will lose their attention.
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