Gen Z will reshape the future of the home improvement and furniture industries

Young(er) people are often characterized as irresponsible and reckless when it comes to securing their future.

But it might be hard to say that about Gen Zers, who are ahead of Millenials and Gen Xers when it comes to homeownership. In 2022, 30% of 25-year-olds owned their home, compared to the 27% rate of Gen Xers and 28% of Millennials when they were the same age, according to a Redfin study.

• Plus, the cohort is highly motivated: 71.5% of Zoomers plan to buy their first home in the next one to six years, with 37.2% as soon as one to three years, according to Rocket Mortgage. Many took advantage of the home-buying frenzy of 2020 and 2021 when mortgage rates plummeted.

So, it appears that within the next six years, home improvement and home-furnishing retailers will need to prepare to cater to Zoomers, who value sustainably sourced products that are personalized and don’t sacrifice quality for the sake of convenience, sources told Retail Brew. In preparation, retailers should re-evaluate inventory management practices and pricing strategies for when Zoomers dominate the housing market.

Quality over quantity: Traditionally, retailers have focused on maintaining large inventories to meet consumer demand, James Scaife, commercial director at high-end furniture retailer Olson and Baker, told Retail Brew. As we previously reported, oversupplying is often a pitfall in managing inventory. And Zoomers have changed how retailers think about inventory lead times, Scaife said.

• Scaife said his company keeps next to no excess stock and selectively chooses pieces that align with Gen Z’s tastes.

“I think there’s a romance in the waiting,” he said. “It becomes this kind of fantasy and when the furniture finally arrives; it’s this wonderful thing. It’s not a burden to wait, actually, it’s this beautiful journey, and I think people are starting to get that now.”

The sustainability component is ubiquitous across product categories. Nearly three-fourths (73%) of Gen Zers are willing to pay more for sustainable products, according to a First Insight report. Artem Kropovinsky, founder of NYC-based interior design studio Arsight, has recognized that Gen Zers want their purchases to reflect their values.

• “Gen Z consumers are not just buying a piece of furniture; they’re investing in a story,” Kropovinsky told Retail Brew in an email. “They want to know where it came from, who made it, and what values were upheld in its creation. So the trend is tilting toward a more conscious inventory that’s ethical, sustainable, and transparent.”

The price could be right: Many Gen Zers have only worked in a job market where working from home was “a lot more common” than previously, so they understand that investing in quality furniture yields long-term savings, Scaife said. It may seem intuitive that a cohort with the least amount of spending power would want what’s most affordable under any circumstance, but Scaife believes that’s not the case when it comes to a living space.

• Scaife said Olson and Baker has adjusted its pricing strategy to reflect this understanding. Rather than focusing solely on competitive pricing, the company emphasizes the quality of the product.
• But that’s not to say Zoomers aren’t savvy shoppers. They’ll often compare prices between retailers, so businesses need to employ data to understand market trends, implement dynamic pricing models, and offer cost-effective alternatives without sacrificing quality, Murat Yashar, director of HouseofWorktops, told Retail Brew.

Zoom out: While the signals are there, it will still be a while before Zoomers become the primary consumer in the market. Gen Z shoppers don’t make up a large proportion of furniture retailers’ current clientele, a Furniture Today/Strategic Insights survey found. Only around 12% of retailers estimate older Gen Zs (18–25) as at or more than 20% of their buyers, with the majority (66%) saying the age group accounts for 10% or less.

“This new generation is revolutionizing the way we think about our homes. They’re not just places to live, but extensions of who we are, reflecting our values, our passions, and our stories,” Kropovinsky said. “As designers and retailers, we are poised on the exciting brink of this shift, ready to meet the challenge, and eager to embrace the opportunities that lie ahead.”