'Funflation' And a Generation That Wants Experiences Rather Than Stuff

There have been a few terms thrown around to describe the boom in travel after the COVID-19 pandemic. We've heard things like "revenge travel," referring to people making up for lost time from lockdowns.

With that increased appetite for travel and experiences out in the world surrounded by other people comes the phenomenon dubbed "funflation," aka the economic response to increased demand for travel and hospitality.

Simply put, people want to do things rather than buy things, even when the cost of doing those things increases.

“Food, fuel and lodging costs are up 20% versus pre pandemic wages are up 17%, so you’re eating into that savings,” Best Buy CEO Corie Barry said, according to Modern Retail. “And they’re prioritizing fun. Funflation … those experiences are really where people are willing to pay. Which means those bigger ticket items in electronics [are] not, right now, where people are as interested.”

With that in mind, distributors have an opportunity to enhance the way their customers in the travel and hospitality space market themselves. This could mean more branded items during a flight, branded kits upon arrival at a resort, and more. It also means that brands outside of the travel and hospitality space are looking to incorporate experiences into their marketing.

Look no further than the immersive "pop-up" events of the last few years from streaming services, musical artists, and TV shows.

"Customers want experience, young people want experience, and that can happen for retailers by building relationships with stars, with athletes with musicians," Michael Hershfield, founder and CEO at Accrue Savings, said, according to Modern Retail.

The other affect of COVID-19 was that people became even more used to shopping online than they already were, so retail customers need to create ways to entice shoppers back to brick-and-mortar locations. This can include signage and other promotional items, or even co-branded events with entertainment brands like musicians or TV intellectual properties.

If that event includes something that encourages social media sharing, that's even better. Signage can include QR codes to direct users to a landing page, and a good display design can make for perfect selfie moments, bridging the gap between physical products and digital marketing.

Modern Retail listed a few good case studies of special events and tie-ins from stores:

Recent examples of brands that have looked to add that extra non-product offering include brands like Alo Yoga and Vuori draw in shoppers with fitness classes. Online baby registry and parenting platform Babylist opened an Insta-worthy showroom in Beverly Hills that invites shoppers to try out putting a car seat in a model car, or sit in a life-sized Baby Bjorn. Our Place debuted cooking classes in its Venice flagship, while Aldo is experimenting with pop-up activities like the inflatable “Pillow Walk” to promote its footwear technology.

This all is directly a result of the pandemic, yes. But, it's also an indication of what the younger generations want to spend their time and money on. Gen Z, who came of age with the internet and then during lockdown, want to get out and explore. And distributors can do their part by making their customers stand out among the competition, and bring every brand they work with into the spotlight.