Dan Frommer, Editor-in-Chief, The New Consumer


Brainstorm Tech 2022: Frommer’s Guide To The New Consumer

Conferences

Brainstorm Tech 2022: Frommer’s Guide To The New Consumer


Hi there. I'm dan Frommer, I am the founder and editor in chief of the new consumer and I'm very excited to debut a brand new consumer trends report for you right now. This is a world exclusive. So let's go. Um The covid 19 pandemic as we know is not over. But what we call economic Covid is mostly finished. The ο wave broke case records and my chart in fact, but consumer mobility remains very strong only down about 7% from normal this spring. According to Google e commerce growth had a massive spike early in the pandemic and growth has decelerated and those huge early spikes up and down for things like home goods and luggage have also normalized in the last few months. According to Ernest research, Restaurant dining is basically back to normal in the us just down 2% in June And air travel has now recovered about 90%. But uncertainty is still our reality. About half of us consumers pulled by Colin think the pandemic will still disrupt their lives for more than six months. Record inflation is here and the U. S. Consumer is feeling it Prices were up almost 9% in May. A 40 year record Still varies widely by category gas up almost 50%. But it's actually a good time to buy a TV right now. Americans. So the perhaps the most important part of our research is what we call the consumer trends survey twice a year. A company called to luna helps us pull more than 3000 U. S. Consumers about all kinds of topics. Um We just performed our last one a few weeks ago ending in june and this is one of the more interesting things we learned. We asked what's the most important problem in the US right now and almost half chose inflation is one of their top three. Um Up quite a bit from the last time we asked this question in december number two government and poor leadership. Covid fell to number four was previously number one. Late last year, I wanted to illustrate what inflation actually looks like. So for a for a very rough example, here is what the average US household annual spending looks like and this is your brain on drugs, this is what may's inflation numbers made the spending feel like again, here's how it feels. In our survey, more than 70% of consumers said that Over the past six months it feels like prices have increased a lot. So even though they're only up 9% across the board you over here, it still feels like a lot and that's up from 58%. Just last, November. only about a third of consumers say they feel moderately or optimistic moderately or very optimistic about their financial situation right now. Down from half in our survey last summer Gen Z and millennial consumers were raised on the Internet and they experienced the world differently. I think this is very important for us to grasp in the tech world we care because these generations represent about 40% of the us population and they're entering their prime spending decades. I love this one more gen Z and millennial consumers tell us they feel most like themselves online than offline. About 40% say they feel more valued for their work on the Internet, They're more likely to meet their closest friends online. Many feel more creative online. The majority tell us that they consider themselves a gamer, whatever that means to them. We didn't, we didn't ask them, but most Gen Z and millennial consumers consider themselves a gamer and more than 1/3 consider themselves a digital creator. E commerce continues to redraw the trillion dollar US grocery industry. Online grocery of course, got a huge boost early in the pandemic and has actually maintained most of it. This is spending data from earnest research, consumers love convenience and they love choice. Most of the people who say they switched to online grocery during the pandemic had stuck with it more than half say they still prefer it over their previous shopping techniques. I don't know what you want to call it routines. Uh, younger consumers gen Z, millennials plan to spend an impressive amount of their grocery bill online. We care because people buy groceries differently online than they do in person. Major implications for the retail world, Major implications for brand and tech. It is a fundamentally different user interface to shop here in the beverage aisle of my local air juan as it is to shop for beverages on Instacart. And there's a big share shift this money heads online. It doesn't just go to the e commerce website for the grocery store, It goes all over the place, it goes to Uber and Doordash, It goes to DTC brands last year. This time the big story was 15 minute delivery. Of course one of these companies is already out of business but we'll see what happens. There could be interesting something that means a lot to me. We've spent the last decade talking about how algorithmic news consumption is riding our brains well now we're buying food because stores are recommending purchases to us. Two thirds of millennials in our survey say that gross online grocery stores have a responsibility to recommend healthy food. I can bet you right now they're not plant based meat has potential but more innovation is definitely necessary beyond meat is a great proxy for the rise and now the plateau of plant based meat or fake meat, whatever you want to call it, retail remains a very important uh channel for discovery there about a third of U. S. Consumers in our survey last month. So they plan to eat more plant based foods over the next year. Tracks with younger consumers and also with higher earners. Perhaps no surprise there, most consumers say they're at least somewhat interested in plant based alternatives for meat or dairy. Why the number one reason they chose were health benefits, number two, better for the food supply and number three, better for the environment. Number three, not number one, those who are not interested say they just enjoy real meat or dairy, they don't like the taste, it's too expensive. In fact, it is often usually more expensive still than real dairy or meat. So if technology can get us to a point through economies of scale where plant based alternatives are cheaper, would people switch? Actually, the majority of gen z and millennials say they will switch, so we'll see what happens there, sustainability is not the consumer purchasing behavior right now, but it's increasingly part of the behavior about half of consumers say that they prioritize sustainability highest among millennials in our poll. It is already a top three purchasing priority for some people, not for most people, but for some and it's different by category cleaning supplies, baby food and beauty high up on the list and this is important, diehard sustainability consumers, if there is a downturn, if there is a recession, say they will actually prioritize it more than they are right now. So good for the planet. I hope the future of fitness still looks like a hybrid digital and gym combination. The gym membership is coming back to life. This is spending data from earnest research, home fitness had as we know, a huge early pandemic boost. Still growing just not as much as it was a year or two ago. Uh, most people who switched to working out at home during the pandemic have stuck with it more than 80% and most also still prefer. It almost 60% Felton of course was living in a pandemic dream and is now living the pandemic nightmare. Still growing number of subscriptions. But engagement is down a lot overall. Home fitness is still the story we believe. But most people who exercise still want some gym access. So very interested to see who develops that hybrid opportunity. I'm calling it the covid at home test is the gadget of the decade so far and has opened a new world of possibilities for at home testing. About 40% of our consumers in our polls say they've taken an at home covid test. Higher percentages among higher earners. A large percentage are comfortable performing more at home tests including nostril swabs, cheek swabs, urine samples. For what? Sorry? Why? Uh, number one reason to save time obviously also saves money and is more private. And for some things you can test more frequently. What tests are appealing viruses obviously beyond covid as well. Blood sugar, insulin cholesterol and vitamin levels. And also early screenings for things like cancer, Future of work. We talk about the future of work attitudes around work have changed. Perhaps permanently New York City subway ridership has recovered 60%, but office occupancy is only around 40%. The return to work is stalled, depends on the city though. Dallas and Austin are much higher than New York. I love this staff though 75% of consumers in our survey say they believe they should have the legally protected right to work remotely if technology and the nature of their work permits it. I think that's a strong statement even higher among women and millennials. But also they have the leverage right now unemployment at a record low. We see short staffing everywhere we go. So if there's a downturn, if that shifts a little bit, we'll see what happens to remote work and those legally rights, legal rights, weird times ahead. Uh Most consumers in our poll believe a recession is likely within the next year. And there has been a rapid rise of news articles about the recession. Obviously nobody knows, but we are not yet in a recession, consumers are still spending a lot of money according to spending data from earnest research. It is the first down market and perhaps the first sustained down market for many consumers, especially younger gen Z consumers. That's important. And also we've learned that things can lose value. Perhaps a valuable psychological shift. Things like sneakers and N. F. T. S not worth necessarily what people thought they were forever. Weird times. Like I said consumer sentiment at its lowest point right now since the university of michigan started tracking it. And as we head into another election season, we are still highly divided in this country. 39% of our consumers polled say they would vote for Donald Trump for president if he runs in 2024, undecided. We also asked who is the right leader for 2022. Uh, only four said Elon musk, but what do they know? Uh, thank you so much. I appreciate it. Thank you to my partners coefficient capital for helping me with this research in this report. Once again, thank you to Fortune. And you can see all of these slides on my website at New Consumer dot com. Thank you.