"I think minimalism is done." — Dan Frommer is tracking retail trends and the tech revolution with The New ConsumerView transcript
Nearly 14 years ago, the first iPhone was released. The internet was becoming mainstream, and the seeds that would go on to change industry, consumption, and the world were beginning to sprout. Dan Frommer was there for all of it.
Frommer began covering commerce just as those landmark products and technologies took hold, and he's followed the way tech has changed the world every step along the path. He saw Amazon take over and popularize online shopping, and saw as businesses like Stripe and others gave way to entrepreneurs and small business owners across the internet. Eventually, Frommer would himself end up using the technology he covered to start his own business, founding The New Consumer in 2019. Less interested in the business machinations or engineering behind tech, The New Consumer is a publication that focuses on how the industries impact the day-to-day lives of regular citizens — namely, how it affects the way they consume products. The New Consumer operates on a subscription service; readers can pay $200 for a full year of $60 each quarter. Frommer writes that heading into year three of his business, "things here are going pretty well," though he has not publicly released subscription figures.
"I’m excited to focus my attention on how and why people spend their time and money, as technology continues to profoundly change how things are created, experienced, bought, and sold," reads the "About" page on The New Consumer. The publication pitches itself as being for the forward-thinking executives, entrepreneurs and investors of the world eager to find out how the industry will shift next. Frommer spoke about becoming a journalist-entrepreneur, how retail has changed and what the future holds, and which consumer trends are here to stay or on their way out the door.
The New Consumer, and how tech has changed everything about how we live00:00:00
Business of Business: So can you talk a bit about your background in tech and business journalism and how the industry has changed with your career?
Frommer: First of all, thank you so much for having me. I really appreciate the opportunity. My name is Dan Frommer. I'm the founder and editor in chief of The New Consumer, which is about two years old now as we record this. But I've spent more than 15 years now at the intersection of technology, journalism, and new media entrepreneurialism. I started my career at Forbes.com, which is in some ways a traditional business magazine. But [I worked] at the website, which was in a different building, and even a kind of different corporate structure. So it was a little more forward thinking, a little more technology driven — not focused on filling magazine pages, but on building an audience on the web, for better or worse.
I took some of those lessons to my second job, which was becoming the second employee and really part of the founding team of a site called Silicon Alley Insider, which is now Business Insider. We started off covering the New York tech scene in 2007 when there were budding young companies like Tumblr and MongoDB, and some other companies like that, that are now [much larger] — Tumblr at some point was worth a billion dollars. But it was a really interesting view into the beginning of the New York internet scene and, for me personally, what it looked like to start a business news publication from zero and build it into one of the biggest in the world. So since then, I've kind of bounced between working with bigger companies, helping them build audiences and build brands. As a technology journalist, I was the tech editor at Quartz, and then I was the editor in chief at Recode, which is part of Vox Media.
But for me, I've always been interested in starting new brands; in putting things out there that didn't exist that should exist. I had seen that kind of rise of two things happening at once in the media industry. The first was the rise of these subscription newsletters — I don't call what I do a newsletter because it is also a website that, in my opinion, has one of the best reading experiences of any publication on Earth. To me, that's really important. But also, it will be more than more than a newsletter and a website someday: it will be events and community and all the things that make a modern media company.
The second thing was that because of technology like Stripe, which powers payments online, and Memberful, which is a software I use to sync up a membership and an email list, it was actually very easy for an independent publisher to set up a new a new shop on the internet, get readers and get revenue — and meaningful revenue. Not just collecting five cents every time someone looked at an ad. That might even be generous, maybe it’s a penny. But all of a sudden, I could launch this new publication with a subscription that may seem expensive to some, but is a great deal to others. [There were] people that I've known professionally for a long time [building new, industry-focused internet publications], and I saw this and said, “Okay, I know how to do the technical parts of this. This model really speaks to me.” Because it's a direct relationship with the reader who is your customer, you can create a product that is really tailored to that professional audience. For me, that doesn’t mean using jargon or words that people couldn't understand, but it means “What are some topics that I can dig into that perhaps would be a little more advanced than a general publication would do?”
But the bigger thing that happened is that I had been writing about the tech world for a long time, and I was less interested in some of the mechanics of the tech industry. Personally, I'm just not all that interested in policing Facebook. It's just not that interesting to me. To me, what's more interesting is how technology changes the world — Literally. How two iPhones can get you Uber. How all industries can change because of technology. Being in New York in the 2010s, we started to see companies like Warby Parker and Harry's — these direct to consumer product companies that were not really tech companies. But they were using tech to build an audience and build a brand in what I thought was a novel and interesting way. And I started to get really interested in these companies and how they do business, and how they build an audience online without requiring this weird codependent relationship with big retail companies.
"These things all sound kind of obvious. And we take them for granted. But they are driven by technology, and have completely changed the way that commerce is done."
And I also have a huge personal interest in food and beverage grocery and consumer packaged goods, I always have. And what I noticed two or three years ago was that I wasn't finding the articles that I wanted to read about these companies. Ecommerce was obviously how more commerce would be done in the future. I just became really interested in these companies and in this field, so I decided about two and a half years ago that “This would be a really great topic for one of these professional publications. I'll go really in depth on consumer trends, and in company reporting and analysis in a way that folks just aren't doing, especially for small private companies.” There's obviously been a long history of analysis from Wall Street banks and from big analysis firms for big companies and for big enterprise products. But fewer folks were analyzing two or three-person startups that could grow to become the next great food company or the next great stroller company, or whatever it is. So those are the things that kind of came together and inspired me to create The New Consumer about two years ago.
The New Consumer focuses on the intersection between tech and consumer brands, like you said. What are some of the biggest or key changes that tech has made to the consumer experience over the past few years?
Yeah, so many things. One is just the way that you buy things, in almost every aspect. Before, you had to go to a store. The store only carried certain products, and you learned about those products through the store. If you didn't like what they had, you went to a nicer store or a cheaper store, or just a different store. And then you would give them your card or cash and then put the product in your car or in a granny cart or wherever depending on where you live — I definitely walked home with an air conditioner once when I lived in New York, which was super fun. And that was it. You didn't really have a relationship with the brand. You probably didn't even know what the brand was all about. You just wanted an air conditioner or something like that. And your financial relationship was with the merchant, and then maybe you'd have a loose relationship with them. You'd see an ad every once in a while, and maybe you would go back to that store. It was very analog. I wouldn't even call it a relationship. It was just “something.”
Technology changed basically every single thing that I just talked about. You can design and build products differently for a more specific niche audience. That's so much of the activity that I see now in consumer packaged goods, in food and beverage, and in consumer products. They're not designed to work for 5 billion people, they're designed to work for a smaller number of people with specific needs. The way that people learn about new brands and new products is also just vastly different now than it used to be.
Then, of course, the shopping experience. You can buy anything you want, without having to wear clothes, in your house, anywhere on your phone in seconds. It's wild. And we take it for granted, but it's new, and it's amazing. It means that you can take a long time to make a purchasing decision, you can do all kinds of research, there can be middlemen [to those transactions], like the Wirecutter, which is now part of the New York Times, which is basically a better front end for Amazon. There's just so many different aspects to shopping and commerce now that are purely because of technology. We don't we don't need to go too deep into the weeds about every single aspect of the shopping experience. But think about how brands want to play a role in your life now, including having a participation in society and in politics.
It's just a vastly different relationship that people have with brands. Again, these things all sound kind of obvious. And we take them for granted. But they are driven by technology, and they are relatively new. They have completely changed the way that commerce is done and it's pretty awesome.
You recently reviewed an app called “Levels” which tracks and analyzes your food and activity data. How do you think that hyper-personalized products will impact consumer trends across industries? And do you see one industry as having the biggest impact?
Levels was cool — it’s a continuous glucose monitor that you wear on your arm basically. There are a lot of interesting things happening there. One is that they don't make the monitor: it's just an off-the-shelf monitor from Abbott, which is a huge pharmaceutical company. But because Abbott made this technology for mostly for diabetics, a company like Levels is able to tap into that data feed that comes from the medical technology that's on your arm, and correlate it perhaps with the food you're eating or the exercise you're doing... and you can see the change in your glucose levels. And I thought that was super fascinating.
But to me, what's most interesting about it are a few things. One is this use of a hard-to-build commodity, which is the continuous glucose monitor. If every startup had to build this, we wouldn't have startups like Levels. Another interesting thing there is what happens when all of a sudden, you can see things in data patterns and data sets that you just would not be able to see with a much, much smaller sample size. The most interesting thing about some of this stuff is that the more mainstream that things like step tracking or sleep tracking or glucose monitoring get, the more we'll learn about how things happen across populations, the more we'll be able to perhaps even see things starting before they start. Another great example are these bluetooth thermometers that have been able to track flus in certain populations in certain schools — boom, now you can track an epidemic with a $12 thermometer.
"We're still at the very early stage of figuring out what that change means. It means that the grocery store needs to rethink what it means to be a grocery store."
The networked power of technology and inexpensive products, as they become more mainstream, I think will help us learn a lot more about not only our individual bodies, but general trends across populations. I think we're going to start to learn a lot of stuff that we just didn't really see before.
Personalization is a really, really interesting part of probably the next 20 years of commerce. It hasn't really happened yet, but it's going to start. The first steps are Netflix [telling you which shows you might like], but five steps down is, “Hey, we've been watching your blood sugar for the last month, and you should really try these products and see how they work for you.” And that's something that's exciting. Of course, we've seen some of the challenges that adding technology and algorithms to our life has caused — like how we've seen that an algorithmic news feed that everybody looks at isn't the best thing for mental health or democracy — So I also think about that in the case of these things. What sort of ethical and moral considerations are these ecommerce stores and online grocers building into their algorithms? Maybe none right now, I'm not really sure. But that's something for me to research and something I think about all the time.
How COVID-19 turned ecommerce on its head00:14:15
You mentioned new developments during the pandemic. What would you say is the biggest consumer impact from the pandemic, or any trends that you think are here to stay? What is a good indicator of a trend that will last?
There were a ton of exciting short term trends like sourdough bread baking and puzzles — I still have my puzzle somewhere — hand sanitizer wipes… the wipes companies really cleaned up last year, and Clorox bleach probably had their best year by a long, long shot. The bigger story is the shift to ecommerce we saw in many categories. A real spike happened, especially in grocery and foods where historically, people who bought groceries online were doing it out of convenience. It was less than 10% of a huge trillion-dollar per year market just in the U.S. So all of a sudden it was just as if you flipped the switch and all of a sudden online grocery just shot up. It’s reverted a little bit, but has plateaued at a level that is significantly higher than it was before the pandemic.
First of all, that’s hundreds of millions of dollars in spending, which is pretty interesting. And then second of all you think about, well, what is a grocery store? If you're going to shop for groceries online, are you going to do it at your grocery store's website? Probably not. You might do it through an aggregator like Instacart or Amazon.
So there's not only money changing channels from retail to online, but there's a huge opportunity to lose or gain market share. So as 100 billion 200 billion or more dollars head online, that spending is pretty much up for review. Some things are going to be much easier, some things are going to be much harder for brands, but it's a huge change. We're still at the very early stage of figuring out what that change means. It means that the grocery store needs to rethink what it means to be a grocery store. And then everything up and down from there will probably change as well. Not overnight, but over decades.
What are some of the most underrated and overhyped recent consumer trends or companies that you've witnessed?
There’s a couple of things. I'm personally somewhat skeptical of these products that are called functional food or beverage products. A lot of them may turn out to be a great business, but personally I'm not super interested in them. They're basically taking things like you know, snacks, coffee, almost everything, olive oil, whatever, and just putting a bunch of essentially chemicals in them, to do different things to you to relax you or to give you energy or to lower your stress or to do all that kind of stuff. I don't know, I don't, I'm not interested in that. As a consumer. I've tried them. I understand why that is appealing. And I do believe that technology and science will make products healthier over the long run.
"Tools are going to be available where basically everyone can become an ecommerce merchant without much friction."
I'm much more interested in entrepreneurs and companies that are looking at a category that is dominated by big boring food companies or consumer packaged goods companies that haven't had any innovation in years or decades, and really just taking a fresh look at it. And maybe these won't be the biggest businesses — but there's an amazing spices company called Diaspora Co. that sources spices directly from Indian farmers, and they have the best turmeric I've ever had. You know, it's the best version of those spices I've ever had because it is done with care and with intention. [The company] claimed to be paying the farmers much more than they would ever get through a traditional relationship with a big spice company. They’re able to do this because they can build a brand online, they can sell direct-to-consumer, they can start to get retail distribution. And they can really do this with full focus on the quality of the product and building a relationship with their customers.
It's funny you say that — I've been looking into adaptogens and kind of trying to debunk the whole “functional foods” thing. That's something I've been thinking about.
Yeah, I may be completely wrong about that. But I'd love to not be.
Lightning round: Rating the best and worst consumer trends00:19:00
We’re on the same page.
For the final lightning round, I want to give you a consumer trend or idea, and you can tell me whether you think it's underrated or overrated in a sentence. So kind of like a lightning round, but you know, it's a little more clever.
I love it.
Okay, let's start with NFTs
In the short term, definitely fad-ish, and fully hyped. Over the long run, I think digital art and a new business model for creators that does not rely on a predatory gallery system or allows artists to share some of the profits as things are resold — I think that's inevitable. So, maybe NFTs will be the way that that happens, or maybe not. Was the $69 billion Beeple sale, like, pure? Maybe not. The pricing is just silly these days. It matters a lot, but it doesn't.
That was not a two sentence answer, but I'm optimistic about the future of digital new business models for digital creative sales and ownership. But the last six months of NFTs are definitely silly to a high degree.
I think, as a general model, I'm fairly skeptical. I don't really like subscription product stuff. I've been thinking about it, and we're actually researching some parts of it right now for a story, but there are probably verticals where it makes a ton of sense. And then there are verticals where it just makes no sense. And it's probably not obvious from the beginning which one is going to be which. For things that you replenish? Amazon Subscribe and Save is a decent product, I've been using it every month for years. I get paper towels and dog food sent to me every month and it’s great.
But I mean, if you look at something like Birchbox, which was way hyped for four years, and then kind of crashed but still exists — a lot of these things will spike and recede. But I'm sure there they will find some verticals where those things make a lot of sense.
Not for me. If you look at Blue Apron’s stock price and their performance, it just turned out to not be nearly as big of an opportunity as it was portrayed. But there's a new CEO, and slowly but surely the metrics are inching up. So they’re not dead yet. There are elements of the meal kit that make a lot of sense. But is that a separate brand and a separate company? Or is that just a corner of the grocery store? Or part of some other delivery? I think that makes probably more sense.
The ethical consumer.
Hmm. I think it's real. I question this, right? Because it's easy for someone to say that they care a lot about sustainability or the environment or something like that, but is it in their top two factors that drive a purchase? Is it number 12? Obviously, it depends on the person. But on the other hand you see survey after survey, and especially young consumers, they care a lot about that sort of stuff. So it really is this vicious circle where it is ultimately up to the consumer to drive the purchases that make the brands care about maintaining ethics. So it’s a “TBD.” I would say it's appropriately valued and hyped. And, you know, we'll just have to see. There's still people buying a lot of sketchy stuff that's really cheap on Wish and on Amazon, so I don't know. Clearly, not everyone is shopping ethically right now.
Buy now, pay later.
Seems to be working. I haven't used it personally, just because I don't want to. But it does seem to be working more than I expected it to be. The risk, though, is that you look away for a minute, and then everyone's got $1,000 a month in Klarna bills, and that I am concerned about.
I think it's definitely going to happen. It makes sense, because your friends have your attention and credibility in a way that some random stranger may not. The question is, is it just for fun? Or is it a business? Are we going to have everyone essentially running multilevel marketing scams on their friends now with affiliate links, or live stream shows where they show off everything in their closet or something like that? Or is that going to be a more — I don't want to say professional, but more of a professional thing where some people try to make that a part time job or a full time job, but most people don't do it at all. Certainly, the tools are going to be available where basically everyone can become an ecommerce merchant without much friction. And word of mouth really is the best thing to drive commerce. So I think it’s going to be a thing. To me, the question is just for how many people, and how big of a thing relative to other commerce. If I had to go positive or negative on that, I would say maybe it's overhyped, but I'll probably be wrong.
The resale revolution.
It's definitely a thing right now. It's a great question. I mean, I'm doing a horrible job telling you the over or under on these.
They’re gray areas!
I think it might be underhyped because — ugh, see, I don’t know, because people love new stuff, though. The fundamental question is will people stop loving cheap, crappy new stuff and really get into classic, re-used stuff that is not perfect, but is probably better made and has a story to it? I still think people like new stuff too much. I don't know. So much of it depends on how effective we are at messaging climate change and landfills filling up and that kind of stuff. So maybe it’s underhyped.
Last one: minimalism.
It's funny, I was thinking about this this morning. I think minimalism is done. All that stuff is cyclical. I still like it personally, but when I think of the brands that are most exciting right now, none of them are minimalist. Some really high-quality brands are still minimalist and I'm personally not a super maximalist, but I’m into bright colors right now — not that you would tell from my shirt. But I think minimalism perhaps died with the pre-pandemic consumer. I think “dying” is the wrong word. But anyway, I think minimalism is fading right now.
I would agree with you. I've been thinking about that. I do think the pandemic was really what did it.
Yeah, I think people just want bright colors, excitement, wacky stuff. And minimalism will have its time again. But I think right now, people want something a little more fun and interesting.
This interview has been edited for clarity.
Additional writing and reporting from Daniel Konstantinovic.