The Universal Holding Pattern: A Period of Trial Followed by an Era of Opportunity

Spring 2021

Several major occasions in one’s life are marked by change and preceded by a pause. Before buying a home, people apply for a mortgage, think through their family needs, and streamline their belongings before packing them up. Before retirement, seniors get their investments in order, rethink their budget, and look to downsize their home as they move toward a more relaxed stage of life. Before a baby arrives, parents spend nine months building a nursery, reading all the child-rearing books, and starting new saving strategies as they anticipate growing their family by one.

These short pauses where significant change is not just possible, but impossible to avoid, create opportunity.

Almost a decade ago, the media caught wind of Target’s strategy to hook new mothers well before they ever gave birth. The retailer did this by tracking the series of purchasing changes moms-to-be would make before their due date arrived. They would buy large, scent-free lotions and scent-free soaps, magnesium supplements, and giant bags of cotton balls as they started shifting their lives for their newborn.

The opportunity wasn’t cotton balls, of course, or even targeted ads leading up to a new baby. It was the years that followed the birth of a child, where an overwhelmed soon-to-be parent turned into an overworked new parent, and could more easily be convinced to change their shopping behaviors. By catching these young adults during a huge transition period, Target could educate them on all they had to offer—everything from cleaning supplies to diapers, toys to electronics, milk to produce—in an effort to convince them they were a one-stop shop for all their needs.

Since birth records can be easily purchased by retailers, immediately after a baby’s arrival was too late to convince a new parent; Target flyers would have been drowned out amidst a sea of other competitors vying for the parents’ attention. No, the sweet spot to grab a parent’s attention, and thus loyalty, was during the months of waiting, charting and changing their course.

The most impressionable time for a consumer is during a major holding pattern.
COVID and the Consumer

A few weeks into March of 2020, when a vaccine wasn’t yet a sparkle in a scientist’s eye, it became apparent that our lives collectively would need to undergo drastic change. The whole world realigned to a pandemic reality that included an invisible threat, along with very tangible job losses, travel reduction, limited physical contact and lockdowns that closed gyms, restaurants, retail stores, and office spaces. This shift was the start of something huge, paving the way for new habits and behaviors.

In April 2021, one year after a near-worldwide lockdown, Forerunner Ventures surveyed over 1,000 consumers aged 25+ to check in on their behaviors and attitudes. (We analyzed data on Gen Z separately, because we believe this cohort is different both in terms of spending patterns and predictive habits; we’ll cover 18 to 24-year-olds in another story.) Just like having a baby or getting married marks the beginning of a new chapter with new norms, Covid-19 represents an evolution in customer sentiment that stands to impact purchasing behavior for years to come.

Across Forerunner’s data, the lion’s share of new opportunity seemed to stem with this statistic:

77% of people report at least some concern about an ongoing threat of Covid-19 or new pandemics—implying all that entails from a struggling economy to a divisive political landscape.

Despite the negative connotation, this concern generally seems to inspire productive changes to the evolving world. Over the recent 14 months, this pandemic-adaptive consumer was more apt to spend more online (64% vs. 46%), try new products (31% vs. 16%), support a creator (25% vs. 15%), shop grocery online for the first time (33% vs. 24%), and use digital health services (15% vs. 5%). Concerned respondents also reported higher intention to continue these changes after the pandemic subsides.

Respondents who displayed concern were also more likely to view the next 12 month as “turning a new leaf” instead of “getting back to the way things used to be” (40% vs. 30%). They expect to be emotionally and mentally better off, and have a greater interest in working for themselves and claiming more independence. Embracing a changing Covid culture gave way to an abundance of potential.  

The seismic shift since the start of the pandemic represented a “universal holding pattern,” with an impressionable consumer set to emerge from the Covid incubator. More open-minded than usual, companies and creators have the chance to change their brand loyalties and nudge them toward the development of new habits. As this shift takes place, we see opportunities around several themes.

1. Desire for Empowerment and Independence

The pandemic offered a taste of independence with remote work for some and a desire to have control over one’s own destiny in a fractured economy for others, making self-employment an increasingly attractive option. In our survey, 35% of people expressed greater interest in working for themselves than before the pandemic, including 45% of 25 to 29-year-olds and 47% of parents with kids under 18 living at home.

Of the group that wanted to try self-employment, 59% of people said flexibility was the primary factor. This drive for additional freedom led to a greater sense of empowerment across different areas of the consumer’s life. Those who wanted to work for themselves expected to be better off emotionally (58% vs. 45%), mentally (61% vs. 51%), financially (58% vs. 49%), physically (56% vs. 44%), and spiritually (38% vs. 25%) in one year’s time.

There’s empowerment in self-employment and the independence that comes from owning your own time, traveling when desired, and balancing work and private life, especially as the creator economy offers a seemingly infinite number of avenues to earn a living. There are also new trails of purchasing potential stemming from the uptick in solopreneurs, as well as the lifestyle they’re building around this choice to go it on their own.

2. Curiosity Surrounding Creators

An extension of self-employment and empowerment, the momentum of the creator economy is clear as we enter the post-pandemic landscape. According to our data, 23% of respondents had purchased directly from an influencer or creator in the past 12 months. This increases to 33% for younger Millennials—a potential marker of upward trajectory for the future.

Merchandise was the most popular buy from creators at nearly 50% of purchases—which speaks to the emergence of influencers as a rival to traditional brands—followed by learning courses at 23%, and social content at 22%. Interestingly, 43% of consumers who’d purchased from a creator reported purchasing because they felt they needed the product or service, especially prevalent among those who bought merch and learning courses. Further, over a quarter of respondents said they were prompted to buy purely out of curiosity.

What surprised us? Only 11% of respondents reported the intention to purchase from creators in the future, 42% said maybe they’d buy, and a whopping 47% said they didn’t plan to support any creators in the coming months. These statistics seem to reflect the nascence of the category. Right now, creator content isn’t something people plan to buy, but rather something they discover they want, need, or are just curious enough to purchase. With an inevitable increase in offerings on the horizon, we anticipate this emerging purchase behavior to take hold, gaining momentum as a new distribution channel.

3. Influence of Home, Family, Friends

In the early days of Forerunner, we often analyzed the behaviors of the “digitally-native urban millennial,” because that was largely the consumer archetype most likely to be on social media. Now that technology and internet culture have become pervasive, it’s worth considering “influencers” appealing to all people and all generations. Social media influencers are widely discussed as a primary means of cultural impact, but, perhaps somewhat surprisingly, the bigger influencers appealing to most adults may be closer to home than many realize.

Especially during the pandemic, where our worlds shrank significantly, we found respondents leaning heavily into their circles for advice on what to buy.

Family and friends were the number one driver of purchase decisions across all categories we measured.

When consumers seek to buy accessories or apparel, 39% say recommendations from friends and family have the most impact among five total options. For beauty and personal care, that stat stands at 46%, followed by 42% for home decor and goods, 45% for tech and electronics, 53% for games and toys, 47% for fitness and sports, and 70% for pets. (As a fascinating sidebar, people who are less satisfied with friends and family coming out of Covid also report a greater likelihood of reverting to pre-Covid spend.)

By including friends and family in their marketing strategies—for all age groups, but especially 30+—sellers might be able to create a wider feedback loop of purchasing behaviors.

4. Strong Enthusiasm for Investing

Since the early days of the pandemic, we’ve been intrigued by the wild stock market, captivated by big IPOs, excited by the emergence of NFTs, and fascinated by the idea of investing in individuals. With new and emerging alternatives, and investment news trending each day, enthusiasm in this space is strong. Many respondents in our survey claimed that if they had extra money today, they’d choose to invest or save it versus spend it in any other category, including those who received three stimulus checks (36% vs. 25% with no stimulus) and those who were very concerned about a new Covid reality (35% vs. 26% not concerned).

We also asked about fractional ownership. Despite numerous options, real estate was still the most popular overall, capturing 41% of respondents’ interest, followed by individual stocks at 39%). Alternatives fell a bit lower, like crypto at 21%, collectibles at 13%, sports teams at 13%, and startups at 11%. However, there are key differences in investing interests based on age. While real estate remains strong in all age groups, younger people are less interested in individual stocks compared to older cohorts (31% of 25-29 vs. 38% 30-44 vs. 44% 45-60) and more interested in alternatives and individuals, like celebrities, social media, and creators. Younger people aged 25-29 are 2.7x more likely to want to invest in celebrities and athletes, 1.9x more likely to want to invest in social media influencers, 1.4x more likely to want to invest in sports teams, and 1.7x more likely to want to invest in startups.

While real estate is still so emblematic of the American dream, and is one of the most pragmatic ways to invest, in many ways, investing is more than a practicality in 2021. It’s an exciting experience and a vote of confidence, and we’re reimagining what investing can look like in the context of a more personalized economy.

5. Big Changes for Climate

While there’s a lot of buzz around making simple shifts across apparel, CPG, and food to combat climate change, consumer interest wasn’t as strong as buzz implies across these categories. Despite all of the activity in plant-based foods, 40% of our survey respondents expressed that they were not willing to change their meat-eating behaviors to better the planet.

On average, people reported being more open to using or purchasing a clean alternative in cars (41%), energy (45%), and HVAC/home appliances (45%), compared to adopting more environmentally-friendly apparel (33%), travel (33%) and meat options (29%). Chipping in to offset one’s carbon footprint largely did not appeal with just 10% of respondents expressing interest. Rather than take baby steps forward, our data suggests that environmental awareness may have set in for many consumers: They are aware of the scale of the problem and willing to make bigger leaps to combat carbon emissions than we thought.

Climate change has been lurking beyond the pandemic as a major threat to humankind. Now, the big existential question is: What role do we, the consumers, have in creating a livable world for the future? Perhaps the best thing an environmentally-conscious person can do is vote for representatives that will support climate-based corporate regulations. The second-best step is to purchase green alternatives in more categories that make the largest impact—vehicles, energy, home appliances—if one can afford it.

There are still so many “green premiums.” The only way EVs will get better and cheaper tomorrow, for instance, is if those who can afford the green alternative will buy it today helping to create economies of scale downstream.

2021 and Beyond: Solidifying New Habits

The past year was marked by waiting—for the pandemic to subside, for restrictions to lift, for life to enter into yet another new normal. But in the middle of that holding pattern, we all experienced a profound sense of change that shook the foundation of the way we sought to work, connect, play, relax, and prioritize.

Perhaps this was inevitable. According to classic research by Alan Andreasen, a professor at Georgetown University’s McDonough School of Business, innumerable “life status changes” including moves, job loss or new employment, marriage and divorce, the birth of a child or a child leaving the nest, can cause shifts to a person’s stable lifestyle trajectory that leaves them “more open to change and vulnerable to intervention.” Andreasen observed those undergoing these major changes “were more likely to be changing their brand preferences spontaneously” either as a direct result of the specific status shift (buying work clothes for a new job, baby food for a new child) or as the result of the less-predictable lifestyle changes that accompany it (taking up yoga or running after a divorce).

These changes can be profoundly psychologically, Andreasen notes, often caused by stress, but sometimes for the best. He discovered that stress was positively associated with the quantity of life changes someone made, often promoting a beneficial “reorientation” in one’s life.

The lesson is this: Consumers are exiting a period of intense trial.

On the other side of this time of restructuring, the majority of people will be open to new ways of doing and being, creating a unique opportunity for brands and creators to capture mind and market share.

Even if the consumer has never considered crypto, creators or climate measures, the pandemic broke the grip over their stable habits and forced new perspectives. This allows for inventive emerging brands to have a moment.