Continuing the Conversation: New Consumer Behaviors

Tom Rose: Are you all here because of all the great stuff from yesterday? All right, good. We'll dive into it. All right.

Dan Frommer: Actually, just so I know, how many of you caught yesterday's presentation? Okay, most, but not everyone. So, at some point, I'll do a very short summary and then we'll get to the magic slide with the QR code where you can download all the slides. So…

Tom: So there's a good amount of hands, but why don't you make an introduction? Tell us a little bit about you, a little bit about your background, because I think it feeds really well into what you, what you're going to show today.

Dan: Definitely. So, hi, I'm Dan Fromer. I'm the founder and editor in chief of what's called the New Consumer. It's mostly a digital publication about kind of the collision of consumer brands and tech. My background is mostly as a financial and business journalist, focusing on the tech industry. But I'm also a digital media entrepreneur, basically since middle school. I started making websites in middle school, which worked out okay. But yeah, I also helped start some media brands like Business Insider, that you probably heard of and visited, and the New Consumer, which you probably had not heard of before.

It's very boutique and my readership is a really, really nice mix of entrepreneurs, executives and investors at this kind of collision of tech and consumer. So a lot of e-commerce, a lot of venture capital, a lot of founders of two-person food startups, which are kind of my favorite. You never know where it's going to go. It could be a nine figure exit one day or it could be a small business for 25 years and both could be equally rewarding or punishing. It really depends. And yeah, I started the New Consumer about four and a half years ago and started working on this consumer trends report about four years ago, too.

And the idea there is I love telling stories through data. I think it's fascinating. You know, there's lots of different ways to do journalism. I love data storytelling. I think there's few things better than a simple chart that tells a complex, nuanced story. And so this report, we really try to, you know, we do three of these a year. We break into sections. Each section has a narrative to it. Each narrative is told through 10 to 12 or so charts, ideally, as simple as possible and, you know, you can really understand what they are saying. You know, not perfect. So the one thing I would ask you all for is real feedback.

Like, let me know what's useful, what's interesting, what's not. There's now too many people in the room to go one by one. We are actually kicking off our next research phase right now. So if there are topics or sectors or elements of this that you think would be interesting or useful to your work, please let me know. We really love ideas from readers. So you'll have my email for that at the end.

Audience member #1: Are you sourcing questions now?

Dan: What's that?

Audience member #1: I didn't know if we were sourcing questions now.

Dan: So we are going to be doing mostly Q and A.

Tom: Yeah, we're not going to have a lot of slides, but we'll give a lot of opportunity for questions.

Dan: What I'll do right now, is I'm just going to go through all the slides really quickly. All right. I'm not actually going to talk about what's on the screen very much other than to kind of call out the five big topics here. One was the rise of AI, which was really you know, kind of the, as I call it, the obsession of the year and really profound already level of awareness. And, people really expect AI to have a big impact on how they work and also on culture and also on society. Again, all I'm doing right now is trying to get to the last slide, so give me one second here. Then we also talked about diet drugs like Ozempic, which are also increasing in awareness and popularity right now.

This is the chart of prescriptions for Ozempic and similar drugs and also again, the impact on society. Some generational splits here. Millennials think that it's great. It's the millennials, most likely to say it will have a positive impact on society. And then Gen Z, the younger generation, most likely to think it would have a negative impact on society.

We can unpack that if you want. Talked about digital natives. More Gen Z and millennials say they feel most like themselves online than offline. I think this is really fascinating for everything from marketing to recruiting to remote work, maybe everything. This section on TikTok, and specifically how it really is a Gen Z phenomenon, not just a place for entertainment, but also for brand discovery. And also some kind of controversy on whether it should be banned here or not. Young people think no, older people think yes. And then lastly, talking about the economy. The U.S. Consumer is still spending money kind of around the same amount they were last year, but still feeling inflation.

But, and this is kind of our proprietary NPS score for life. Americans are 6.6 on a scale of zero to 10 in terms of how satisfied they are with life right now. It varies by demographic, but it has been going up over the past year and a half. And then we talked a little about the return to work and how 79% of consumers believe that remote work should be a legally protected, right?

And then we also talked about our political polling, but here's where we're going, which is this. So if you want these slides. Please download them. Do whatever you want with them. Just don't sell them, I guess, or try to present them at another conference. But, you know, we love seeing our work out in the world.

Tom: That was it?

Dan: Yes. Yeah. So, we do have a couple questions that were submitted yesterday. Maybe we can knock those out quickly and then we are here to take your questions, so.

Tom: So, yeah, we've compiled them all and there was some really good questions. One of them was, have you looked at the correlation of score on 'life is good' to the best leaders of our country?

Dan: Yes.

Tom: And that's where we ended yesterday for you that were in there.

Dan: Yeah, so I had not until now. So that was a great question. Thank you for the idea. And the idea basically was, you know, you have, 3,000, 3,025 people giving you their life satisfaction score. Then we also asked 3,025 people who would be the best leader for the U. S. today and in the aggregate again, Donald Trump was number one, Joe Biden number two, followed by number three, not sure. And so, I split the life satisfaction scores into three groups: the least satisfied, so zero to four, the kind of median, which was five to seven, and then the most satisfied people, who clicked eight through 10.

Interestingly, about half of people clicked over eight through 10. I guess that's what a median means. But anyway. So what was remarkably stable among those three groups is actually the support for Trump is all in that kind of 20 to 24% range, which evens out to around 22. And then in the least satisfied and kind of middle of the road people, support for Biden is around the same kind of 10 to 12% range and then not sure is actually number two, 20% range.

However, the most satisfied people actually, 27% of them said Joe Biden, which makes him number one among the happiest people in America. Donald Trump three, and then, actually Donald Trump two, and then not sure number two. So that was a lot of numbers, but basically the very happiest people took their not sure votes and moved them over to Joe Biden and the least happy and median people kind of all feel the same.

I will caveat this again with, we are not political pollsters. These are two questions in 140 question survey about consumer spending habits. But we think they're interesting, so we ask. But I thought that was a great follow up. So I was surprised by the answers. Now, I will filter more of our questions by how happy people are. And we'll see what the miserable people and the happy people think about a lot of other things that we look at.

Tom: Following on that, since you broke it down a little bit, they were asking about demographics and any information based on the sample. What is it? What does it look like?

Dan: Totally, yeah, I don't have the breakdown in front of me, but we work with a professional survey company. So it is their job to make sure that we have as close to a nationally representative survey as possible, in each of our surveys. And we've done seven of them with this company. It's always a little different. It's also skewed by who takes surveys online, right? That's never going to be perfectly proportionate to who lives in the U.S. But it is hopefully consistent over time and then hopefully as close as possible to the demographics in the U.S. that we can get.

We look at things like age, geographic spread, urban versus rural versus suburban, racial, and Latino versus non-Latino. We try to map it as closely as possible to the U. S. population. And the only change that we've done over time is we recently were able to pull people between the ages of 15 and 18 to hopefully get a more complete look at Gen Z. But and then sometimes we see, okay, well, we're kind of short on these people. So let's add more so that our total sample is as close as possible to being representative. That is 100% in the hands of the survey company. And again, we just asked them to be as accurate as possible with that sort of thing.

Tom: It's good. Switching gears a little bit. There was a lot of questions on the talk topic about remote work.

Dan: Yes, remote work. Big one.

Tom: So just with a show of hands, how many folks in this room work remote? Part time. So it's a pretty big number. Right. How many have kind of a flexible schedule?

Dan: Yeah.

Tom: What do you see, and we talked about a little, based on the results here and coming back, return to work. What impact do you think it will have on the economy overall? I mean, people were asking specific about what's it going to do.

Dan: I mean, look, I'm not a macro economist, but I think what's more interesting to me personally are some of the microeconomic impacts and you hear that from restaurant chains. You hear that, you know, suburban locations were really outperforming city center urban locations for a long time. That has started to shift back as there's more foot traffic in certain parts of certain cities. But you go to parts of Manhattan still and you're like, wait, this used to be like really, really busy during the week. Not so much anymore, especially Mondays and Fridays are still, there was actually a really interesting, I don't have it with me, but Square, which makes the credit card terminal at many coffee shops and restaurants did put a push out a report recently where they showed you know, among their restaurant customers where the spending was happening during the week. So you could see every hour of the week that shift. And basically the winner is a Saturday brunch. That's like the highest gains in that industry were our Saturday brunch. And I believe the lowest, like the greatest declines were, Monday lunch, and I think Friday lunch. This is from memory now. So you should check out this chart.

It's really interesting. They put out some really interesting data-driven reports. I think if you just search like Square Restaurant Report, you'll find their stuff. And so it is a shift in, you know, how and where and when people are spending. I think that it will affect different companies and industries differently.

I think, you know, as long as there's the same number of people in a country and, you know, then of course, money moves online and moves back offline. I think that it has been interesting to see businesses start to invest more in what you would call like the neighborhoods as opposed to just like the core city centers and seeing things like Target and other companies open up in a residential neighborhood.

I currently live in Los Angeles and Target, and they're doing it here too. These small Targets that are just like, wait, there's not even a parking lot, but there's a Target. So, I think that's interesting. I think that probably was starting before the pandemic and remote work and all that sort of thing, but it certainly fits that model of people are probably going to be near their homes more than they were 10 years ago. And maybe that'll swing back someday, but for now, it seems pretty, seems, you know, that chart from yesterday of the office occupancy really is kind of in that 50%. And that is kind of a flat line. So, we'll see what happens.

Tom: Besides that dip in January.

Dan: Yeah, yeah. The weather dips in the holidays.

Tom: That was crazy how it impacted that. Touching on AI. So, just a quick raise of hands again. How many in this room use AI? Okay, make up that. How are you using it? I mean, I think people were trying to give ideas like on different ways to use it. I mean, what do you see from your perspective in your business? How are you using?

Dan: So, the newest tools, the generative tools. I think a lot of there's a lot of really interesting experimentation in marketing, whether it's copywriting or graphic manipulation or creation. There's a startup launching. I don't know what day is it, maybe next week or something like that, where they are using generative AI to replace essentially like a very, very resource-intensive one off creative production process, where instead of requiring, you know, photographer and film editor and photo editor and all this thing across thousands of products like they can have one picture and then theoretically have an AI model do all that work.

So who knows if it's going to be any good, but, I'm seeing a lot of that. Also like, you know, write a reply to this email or give me some ideas. Give me some startup. I think that was one of the ones yesterday. Give me some startup ideas. By the way, maybe we should queue up an audience question since we have a roving microphone. Anyone have a question? Okay, well, we have one here, too. Maybe if we pause for mic. All right, cool. Is that cool? Is that okay with you?

Tom: That's good. We'll let this one slide.

Mariana: Everyone can hear me? Okay.

Dan: Hi.

Mariana: So my name is Mariana. I run six businesses, so I'm using AI a lot.

Dan: Oh, cool.

Mariana: In many different ways. One of my questions is I know that a lot of the fear coming across from having AI is replacement. Will AI potentially replace certain jobs? I'm taking more of a different approach with my companies and that is how can AI help us find our passion through our workplace? So is there any particular data currently, that could potentially help people see things from that perspective where you could be tossing the things that nobody wants to do and more discovering your passion through the workplace and potentially mastering your passion by leveraging yourself and your workflow through AI. If there's any data around that, I would love to know. Thank you.

Dan: That's a great question. So, there are a couple of ways to get toward that. You know, one of the things that is already happening is people are becoming more efficient in the time that they're spending on work. For example, I haven't memorized the numbers. But I remember reading something from, I think it was GitHub, about the percentage of computer programmers who are using their AI assistant is very high.

And I think it's something like 40-some percent of their code is being written by the AI tool now. So, theoretically, they're not really going to be 40% more productive because it's not just code that takes time, but you could be significantly more productive, which means you could either spend less time working, or you could do more work or you could do different work. And so I think that kind of helps us get there. I think there's this disconnect between fear, right? As you say, people in our research, more than a quarter of people think that AI will replace them at work within five years, higher among higher earners and lower earners.

Both, I think, if I remember that slide. It's in there, though. But also people believe it will make them more productive and, you know, I think that we'll see about that. We'll see if the output is actually as good or in some cases perhaps better or get more efficient or perhaps it allows fewer people to do more things, which is always interesting and good. That's been really the biggest benefit of digital technology in my life. Certainly, it's just that it's leveled the playing field for so many entrepreneurs and people. But as far as specifically for passion, I don't know. That's a good way to frame it.

Mariana: From a perspective of like, doing more of what you love tends to bring more wellness to your overall lifestyle. So doing more of what you love usually will lead to better health, better care, better self-love. And I'm just wondering if there's any statistics around how AI is helping people get more towards wellness and away from burnout.

Dan: Well, I have not read the four-hour work week, but perhaps if AI can write my newsletter and I can do four hours of work, maybe that will get me more toward my passion. Question, oh, we'll start there and then we'll go next to you. Hi.

Carolyn Cerullo: Hi, I'm Carolyn Cerullo. I am also a researcher. I work for one of the major office furniture manufacturers.

Dan: Sweet.

Carolyn: And so I have…

Dan: Love office furniture.

Carolyn: I have a couple of comments and a question.

Dan: Great.

Carolyn: On your study, one on the castle data, I just want everybody to be aware that's only from 10 cities. And we found that it's very regional, and there, and especially if you look globally. Like, in Hong Kong, there's like 90% occupancy in some cities. So that, you kind of have to take that with a grain of salt. Secondly…

Dan: It is, by the way, she's totally right. It is very regional. And you can see that there are three cities in Texas, which I believe are Houston, Dallas and Austin, have always been the highest and then New York is always like way down near the bottom.

Carolyn: New York, San Francisco, Toronto that especially when you use public transportation is very, very low.

Dan: Probably also skewed by their client base, which we don't know.

Carolyn: Right, right. A lot of those expensive cities. A lot of people left to go to other locations. Some didn't come back. And then I have just a small nuance, but I think it's important when you talk about return to work. I think I speak for everybody. We've all been working. Nobody stopped working. We stopped going to the office. So we like to call it return to office. I think it's just to be more accurate. But my question anyway is, I'm just curious how you worded, I hadn't seen the statistics about 79% of the people think it should be mandated, so I'm just curious how you worded that.

Dan: Yeah. And in fact, so we've done seven of these surveys. I believe we've asked that question six times and I've worded it three different ways just to see if there's any change. It's close enough to the end here. I'll just bring it up. So we asked people, "Do you believe you should have the legally protected right to work remotely if technology and the nature of your work permits it?"

Just full transparency. So once I asked if people believe they should have “a right” and then “the right,” and then I added the legally protected part too. I would also guess that most people probably don't know what It means to have legal protection for a status. So if this were the real focus of my study, we would probably ask them about that and then actually define it for them.

But we also like to let people kind of decide some definitions for themselves. There was another question we asked, "Do you consider yourselves a gamer?" And very interesting answers to that question. However, this has been so consistently in this range between 75 and now this is, I think, the highest we've had.

And again, higher among women, Gen Z and millennials and people with children and up from this time last year without the aspect of people perhaps not understanding the actual reality of what a legally protected status is. I think this does reflect a desire to have some control over your workplace. I think, you know, you, yeah.

Mariana: When and where they work. That's what people want to have control over.

Dan: Yeah.

Mariana: That's what people want to have control over.

Dan: Disagree? Disagree. Tell me more.

Audience member #2: I don't think it's about, you know, where they're working so much as being able to manage their life. It's not about the work. It's about the whole life.

Dan: Huh. Got it.

Audience member #2: That's why you have more women. And people with children.

Dan: Yeah.

Audience member #2: Because they want to be able to do what they want to do passionately, and still fulfill these other obligations, duties and passions that they have. So being able to take the child to school and then come back, do the work that I need to do. Some people are morning people, some people are night people. So it's really about being smart enough to be able to, A, have a balanced and whole and complete life, and B, truly being able to increase productivity if you are connected to your work. You're passionate about it and you want to be able to do it when you're able to have full focus and have it not be on your mind and interfering. So you're at the work and you're thinking about your kids at school and, you know, cut his finger or, you know, whatever else is going on. So it's not about the work, it's about actually doing it better and having a whole life, which is then connecting it all to mental health.

Dan: Yeah. It's all connected. Yes. Okay. Wow. Well, we should…

Tom: You asked. You wanted to go to questions.

Dan: I love it. I love it. Alright. Over here. And then you're next. Yeah.

Audience member #3: Thank you. So I just wanted to, this kind of ties into what we're all talking about, about this work life balance. As an owner, it would be great for me to have, you know, particularly when I was younger, too, to be able to throw some laundry in. But, I need to get my product done and I need to make sure my employees are working. So this kind of dovetails into my real question for you. Has anybody been looking into what the economic effects are of all this ChatGPT that will actually free us up. So if I'm speaking for my company where I have a group of developers who I don't need as many anymore because they can code very scarily as you saw yesterday how much of that becomes a shortcut with these, you know, artificial intelligence systems? So then I have less employees. That means I pay less taxes. As less taxes come into the city of New York or the county that I'm located in, who's going to make up that shortfall? What will your household taxes look like and are you willing to pay for that difference? There will be choices that have to be made. We can't just say, "Oh, this is like the life of a unicorn that's gonna like shoot skittles out of its butt for me." It doesn't work that way. For every action, there's an equal and opposite reaction. That is the reality. We're talking about less taxes. And we have to really think about how we pay for services and what services we're gonna want or we're gonna miss.

Dan: I guess that supposes that the aggregate employment and spending will change, which we'll see. I don't know. McKinsey has published hundreds of pages with like some very, very complex charts about how they see the economic impact of generative AI. To be completely honest with you, I have not read most of those pages, so perhaps I will and maybe we'll learn something there. Yeah.

Audience member #4: So my question was kind of off the previous one, but that helps too. Isn't there a lot of data though that shows that people who were working remotely were more productive? And because if they had, especially if they had the flexibility, right, to be able to get the job done within the day as long as it's done, right? Doesn't matter if you worked at 8 a.m. or 6 a.m. or 6 p.m., right? Sometimes I work after hours because I know nobody's going to bother me and Slack's not going to go off 50 times. You know, or I've worked on the weekends and holidays, you know, because I am more productive that way. But nobody's checking on me to make sure that I didn't take a nap on a Tuesday afternoon when I'm supposed to be working.

Dan: I don't have any of that data. I'm sure he does.

Audience member #5: The answer to that is two-fold. Number one, it was a 2% increase in productivity during this pandemic period. However, the researchers believe it's because despite the fact that we all could work 40 hours a week, people were so happy working whenever the hell they wanted. They work more than 40 hours a week. So they're not sure if the productivity increase is true or not.

Dan: Yeah. So that, yeah. So in the long run. Let's move over to this side of the room. Yeah.

Vicki Jones: So I'm Vicki Jones and I own in the field that you were speaking of earlier. Storytelling.

Dan: Oh, cool.

Vicki Jones: So actually book publishing. There's a bottleneck clogged pipeline from idea thought process to mainstream publishing. So, I just filled that gap, years ago. When AI came in, ChatGPT, for those who had an idea for a book- and I'm thinking, I'm wondering, have you got any data on this? For those who wanted to write a book, business, children, cookbook, so forth and so on the simplicity with ChatGPT. Now, here's what happened, I just want to share this.

When it initially hit the market, in consumer's hands, AI, people were just going in and plugging in stuff and children's books were popping out. Well Amazon, I've noticed for our side, just kind of stopped, you know, and then there were some publishers that had to shut their websites down, and not allow manuscripts in because they could see duplicated, all these stories that sound alike. But from our side, it propelled our business and then I started, you know, kind of streamlining the process and sharing with people how they can take their idea, program, make it original. Your story or your business is your business and it's not something to be duplicated and you just plug in a few words and everybody's saying the same thing. So what do you feel about on the storytelling side, specifically books, because most people, at least last year when I came here, there were three or four people that had speakers that had books out, business books.

When they speak, usually they have a book. Yeah. And so they're able to put their ideas, their messages into ChatGPT. It kind of fills it out, gives them inspirations or ideas for the topics that they want to talk about that ends up being original, not duplicated. What are your thoughts on that?

Dan: So, I mean, it's an unstoppable force. Like we can't just shut down generative AI for sure. The quality of storytelling can be pretty good. You know, we've also seen like film scripts that have come out and you're like, okay, this is not actually going to be a good movie that a lot of people are going to want to watch. Of course, it will continue to improve, especially if there's a way for me to like, which there already is and I just haven't done it yet, upload everything I've written in the last five years and then it can train itself on my voice, on the way I think, etc. My focus is a lot of this on how consumers will think about this sort of stuff and specifically, you know, do people think this is a legitimate art form? Do people think this is legitimate content and not just machine generated stuff?

And so this was a big part of our last survey. Actually, we asked people, we actually split it out by these four different media forms: movies, art, music and books. But the responses were so similar that we just merged them and averaged them. But, among Gen Z and millennial consumers, the ones who will be kind of entering their peak consumption and spending years, 41% of them believe that 20 years from now, most movies, art, music and books will be created by AI. And about 40% believe that the best movies, books, art and music will be created by AI.

Now, what does it mean to be created by AI? Is the AI, like, coming up with the entire process? Are they just pushing the buttons? There's an entire spectrum of answers to that. We don't know, obviously, what is going to happen in 20 years. We don't know what's going to happen tomorrow. So, however, what this makes me think is that the answer will be somewhere in the middle there, like there will definitely be impact from AI. I mean, you could also just use your brain and realize that like a lot of the visual effects in movies are algorithmically generated. AI is just a different kind of algorithm. So we're already there. It's just not the entire story. So, anyway. I'm not sure if I'm answering your question.

Tom: We got a couple.

Dan: We gotta boogie.

Tom: Two quick ones and then we gotta wrap it up.

Dan: We have to move from this room because there's another session immediately after this. So let's get those last questions and I will try to be very fast.

Audience member #6: Yes. Are consumers starting to build trust around AI-generating agencies that are now replacing whole teams of individuals that are gonna be generating now? Do consumers trust something like this, because I believe we did have a spat around that. And not just the businesses, but are you seeing the startups, because even one of the things I’m working on right now is mobile apps for people who style their hair, do their hair with less time, less energy. curious, with respect to the consumer. Will they chart something like that?

Dan: All right. I'm gonna not repeat that entire question, but I will summarize it as—will consumers trust AI generated stuff whether it is content? And I would say the answer is, if it's good, people will like it. And at some point, the story of who made it matters a lot and in some cases, it kind of doesn't. However, the number one thing people are expecting is also a total lack of trust in visual and audio content. So, we've got a messy future ahead of us, but I think the answer is yes and no. Alright, do we have an official last question, or? Okay. Official last question. We are out of time. And then we'll be outside for a few minutes.

Audience member #7: Thank you so much. So what you do is provide us with consumer trends surveys and that information is meant to inform us and help us to decide how we're going to gauge our own actions. Our decisions will come from these. So there have been a bunch of questions that have been related to the surveys that you've taken. So I'm a scientist, I'm a behavioral neuroscientist, who's a scientist who understands it. And you said this when you first sat down, you know, that one piece of data can give you a very complex and nuanced story. So, these complex and nuanced stories come from the interpretation of the data numbers. You can make them sing any song you want. So, my question is what are you doing or what is your interest? How are you parsing the information that you're gathering in order to be able to relay it in a way. Like, do you have a specific interest that, you know, a narrative you'd like to?

Dan: The why. Why am I doing this?

Audience member: Oh, yes, I'm sorry. Yeah. The why in your mission. I'm very interested in that. And then how that translates to the people that you said were your audience. Some of them VC, some of them very sophisticated.

Dan: Yeah.

Audience member: Some SMBs, etc.

Dan: We are looking, we, speaking for me, journalists and analysts and my partners in this project who are early-stage consumer investors, we are looking for transformational shifts in society, in spending, in consumption. These are points on a path. This is not the path. This is just a point. So we do this every three to six months. We look for change over time. We see things sometimes move in the same direction. We see sometimes things go up and down. But what we look for over time are shifts that are not going to go back. So, you know, these numbers could look very different in a week or in six months or in a year and then we'll have learned something. But that's what we're looking for. People will interpret. You know, 53% could be very high to some people and very low to some people, and sometimes both at the same, in the same conversation. So, we, you know, and hopefully, we are as accurate as we can be in telling truth. And, you know, and we really have to go. But anyway, yes, of course. Thank you so much. Email me.

Tom: Thank you, Dan. Appreciate it.