Fintech On Benzinga: 4 Consumer Product Trends That Will Define The Future Now

Despite what the ads on Instagram and your #sidehustle neighbor might imply, consumer products are hard to sell. Harder than selling is maintaining and growing sales after the novelty of new has worn off. Direct to consumer at scale is not just a lead-buy or placement challenge; it is a relevance problem.  How should consumer-facing companies stay relevant and valuable, particularly in heavily regulated industries.

Here are the 4 aspects of consumer-facing products should focus on this year:

1. Consumers expect personalization or, at least, customizable features

True personalization through artificial intelligence or machine learning models are good but not there yet.  Recognizing patterns in data can help with marketing decisions, lead conversion, and propensity to transact, but all require merging complicated data sources.  These areas will mature and allow companies to expand data science into more complex areas making better and better recommendations to customers.

One way this trend is showing up is embedded finance and access to concierge services.  Fintech allows features and tools to be embedded where consumers need greater access. One good example would be buy-now-pay-later services at online checkout.  Another example is dedicated customer service on-demand through multiple different channels such as: text, chat, video and phone.  

Expectations that technology can and should make this happen are spot on.

2. Empowering consumers or, at least, claiming unique value 

Big data through analytics or reporting is good but not there yet.  The “Moneyball effect” – looking for inefficiency in manual process- has permeated almost every corner of tech.  More important than finding a gain to exploit, transferring leverage from company to consumer or platform to user will continue to be the future.

One way this trend is showing up is giving consumers access to more insight while shopping or in advance of a transaction or decision.  One good example is breaking down a longer-term goal into smaller steps or giving consumers access to products or services typically reserved for exclusive customers – offering 1 share of stock or fractionalizing commercial real estate. 

The biggest challenge empowering consumers is identifying what the market will determine is valuable enough. Oh, and by now, the easy stuff is taken. Consumer trends are pushing into finance and real estate as things like food & beverage, wellness and designer sprinter vans are saturated.  

3. One important consumer value is values

Consumer companies are the product in many ways. Sure, the company is selling a product or service (or both!) to consumers but consumers associate themselves with the company.  This is nothing new.  What’s evolving is the expectations consumers have on these companies.  Not just jokes about Facebook FB is only for Boomers but making decisions off the company’s reputation for privacy or target marketing or even other types of customers the company may have.  

One way this trend is showing up is green shopping or choosing eco-conscious brands. Consumer banking at giant banks, for instance, now has to contend with whether the commercial bank under the same roof funds & underwrites fossil fuel producers or lends to foreign governments. Fintechs are becoming more and more niche as consumers look for a reflection of their values.  There’s a bit of overlap with the trend toward personalization but it’s also about customers only doing business with places that share their values. 

This trend likely continues to pressure consumer-facing brands over the next year and beyond.

4. Complex, heavily regulated transactions are just as vulnerable to competition as other consumer products

Historically, heavily regulated industries and transactions that dealt with consumers had a bit of a moat. The fact that licensing or legal cost or scale all posed barriers to entry on startups or new ideas in industries like finance and healthcare was good for incumbents.  Increasingly technology and cultural trends are helping to break down those barriers and find new ways in.  DeFi and DeFi’s bedrock product – crypto – are the prime example.  DeFi is not the only example.

There are several other examples that we can expect to be growing trends in the next year.  Fintech is seeing a move away from personal lending toward buy-now-pay-later.  In real estate finance, valuations both data collection, valuation algorithms and appraisal are seeing massive interest in M&A and consolidation right now.  Where the companies performing the collection & valuation might not be consumer-facing, the customers buying their data and services certainly are.  We will see direct-to-consumer real estate search, real estate transactions and real estate investing continue to grow and expand in the next years.  Finally, with the rise of both wellness and cannabis over the past few years, we will see new products emerging in the overlap of healthcare, wellness and food & drug.   Examples of these products & services include non-alcoholic beverages and innovation with psychedelics.

The consumer or direct-to-consumer market is still one of the toughest to reach scale and succeed.  It’s also one of the best for creativity, innovation and incorporating trends into the market. Keep an eye on what’s hot and it’s a good way to see what bigger brands will start incorporating in their business 6-12 months later.  Companies that tap into delivering a personal and increasingly sophisticated go-to-market in the next few years will be the ones to win.