The Current #10
by Hunter WorlandDec 19, 2024
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2024 was the year consumer technology and economic reality converged. As generative AI went mainstream, consumers balanced magic with utility. Real-time retailers unpacked incumbent market cap with better tech and prices. Meanwhile, persistent inflation and elevated interest rates forced consumers to fundamentally rethink how they spend and finance their lives.
What follows is an analysis of these shifts and their implications for the next wave of consumer technology, using qualitative data from our consumer panel of 200 American adults ages 22 – 35 employed in knowledge work.
Headline inflation metrics are not only easily discoverable but some of the most tracked figures of 2024. Its implications for the digital economy, especially the consumer digital economy, are less obvious. When asked qualitatively on how purchasing, budgeting, and transaction behavior changed, our consumer panel offered three key insights.
The impact of inflation and elevated interest rates, our panel revealed, is most acute in two distinct timeframes: food costs in the immediate term, and housing affordability in the long term. Food emerged as the default experience of inflation (gas prices now, qualitatively, a distant second) due to purchase frequency and visibility, triggering an adaptation pattern I’d call “DIY arbitrage”: consumers systematically identifying and replacing service-based spending with “DIY” alternatives. This behavioral shift extended well beyond food into discretionary categories (where, unlike food, consumers could alternatively just cut the spend category altogether), from cosmetics to home services to pet care.
The more enduring challenge, it seems, lies in housing which has become the defining generational financial challenge for this cohort. This represents more than just an economic headwind — it’s reshaping how an entire cohort approaches financial planning and wealth building. The most obvious insight is for platform fintech companies (say, an AI PFM or new cards business) looking for the most opportune wedge into the market. The data suggests a clear beachhead: want to capture the attention of Americans coming of financial age? Support their housing affordability.
The qualitative data reminded me of a gold standard in consumer products: successfully transitioning from discretionary spend to utility spend in financial planning. In 2024, I cannot think of a better example than Netflix. Objectively, Netflix is an entertainment platform, but its UCAN churn remained under 3% during peak inflation and its account-sharing crackdown per Parrot Analytics. This “utility threshold” represents more than just pricing power; it’s a fundamental shift in how consumers categorize a product from want to need. Our respondents justified streaming spend as “self-care” or a fundamental component of work-life balance. This threshold is a good rule of thumb in the age of gen AI. A lot of platforms can create initial consumer magic, but can they cross the utility threshold?
Many in our panel cited alternative credit methods, particularly BNPL (buy now, pay later), as a strategy for managing the elevated rate environment. Despite emerging during the spending euphoria of a zero-interest-rate environment, these alternative credit patterns showed remarkable staying power in 2024 (Klarna’s anticipated IPO data should help us quantify). One of our respondents said it well: “I definitely opt for using the buy-now-pay-later method for all of my big purchases. There’s no way around that. It’s mandatory.” This persistence could be more than just a cyclical adaptation but a potential structural shift away from traditional credit card models optimized around rewards and cashback incentives in favor of accessibility, transparency, and quicker approval.
In 2024, distinct shifts in media like the mainstreaming of AI content generation, the expanded market share of creators, the dominance of short-form video as a primary medium all collided.
The election provided a perfect flash point to take stock. Media in 2016, and to a lesser extent 2020, concentrated at two levels of abstraction: on one level, the enduring relevance of traditional outlets (like CNN, Fox, MSNBC) and then the novel power of peer-to-peer social networks, especially Facebook (whose impact on the 2016 election was significant enough to warrant its own Wikipedia page). Our panel shows how media migrated away from both traditional outlets and also peers to the middle — creators, without the associations of a traditional journalistic organization but also with a larger following than an average Facebook user. One respondent said: “I use YouTube more for finding actual information instead of just entertainment now.” Another observed: “In the past, it was easier for me to focus on elections through information sharing between friends and family. Now I mainly use TikTok.” Beyond the election, YouTube and TikTok were (it was not close) the most cited beneficiary of 2024 media consumption changes. One respondent captured the sentiment well: “I feel like I spend more time on YouTube browsing and learning about my interests daily. YouTube is a space where I can be free and indulge.”
On the surface, YouTube and TikTok’s success is less remarkable because these platforms’ scale are already titanic. But these two giants share something in common relative to their peers that points to a broader trend for the media ecosystem. They’ve mastered not just the social graph (as Facebook, Snap, and Instagram did so well), but the “creator graph” — that is, the ability to identify, support, and amplify domain or niche voices.
The scale of new retail in 2024 is remarkable. To give a sense of size context: Temu had twice as many unique Android installs as ChatGPT, per Similarweb year to date (Shein falls in between the two). On Black Friday alone, TikTok Shop reported more than $100mm in US sales (a product that only launched last September).
Our panel shows that these platforms represent less a wholesale displacement of retail than the ability to unpack traditional retail market value by unbundling a specific value proposition — in this case, price and convenience. Particularly, Shein and Temu leverage an unparalleled pool of small and medium-sized manufacturers, an automated and iterative product development system, and to some extent, favorable US tax code to deliver products at faster timelines and superior economics. “Everything was cheaper. That’s what drove me to switch from Target to Temu,” as one respondent said. Another was equally direct: “Why would I spend $40 on pants when I could find them for $20 on Shein?” Yet this penetration doesn’t extend to higher-consideration purchases, where our panel by and large preferred traditional retailers with higher perception of quality.
This insight points to two critical opportunities for the ecosystem. First, how can vendors support traditional retailers in developing the infrastructure to compete? From loyalty infrastructure (one respondent cited their Best Buy credit card as the reason for their continued loyalty against the likes of Temu) to accelerated product development that shortens time to market. Second, as generative AI reimagines search, product creation, brand engagement, which functions within the trillions of retail market cap are most ripe for a parallel unbundling?
In 2024, gen AI went mainstream, but our panel still had a narrow set of beachhead use cases. Users consistently gravitate toward low-stakes, verification-friendly tasks — specifically, writing emails and explaining professional or academic concepts — where outputs can be easily checked or triangulated.
Why hasn’t our panel (yet) adopted more ambitious use cases — even ones possible with well distributed platforms like ChatGPT or Perplexity such as travel, personal finance, health? For reference, among 200 respondents, only one described using AI as a genuine life copilot. The obvious explanation is trust, which our panel did frequently cite (“fear of inaccuracy,” “unreliable,”, “not yet fully developed”). But that’s predictable. What surprised me is self-reliance as an equal rationale. Our panel said: “I don’t use AI at all these days because I’d rather figure out things myself organically. I like the challenge of retaining knowledge” and “We take too many shortcuts in life as it is.” Or as one respondent put it more directly: “I don’t use AI because my brain works just fine.”
It would be easy to dismiss these respondents as inevitable holdouts or even Luddites. But there’s something deeper here. The challenge for products isn’t just to create AI magic, but to balance it with space for human agency and personal expression. I think of it like a painting: Even when using manufactured easels, brushes, and paints, the human artist claims full ownership of their creation. A product that converts our panel would strike this same balance: empowering users while preserving their sense of authorship and agency.
2024 saw unprecedented attention on data security: high-profile corporate hacks made headlines, Congress grilled tech CEOs on trust and safety practices, Google reversed its decision to depreciate third-party cookies in Chrome. Yet, our panel’s overwhelming sentiment on their own security was resignation and apathy. As one respondent put it most clearly: “I am not too concerned about data privacy. I don’t like it, but nothing is private anymore and has not been for years. Thinking otherwise just seems delusional.”
What actually concerned our panel diverged sharply from the headlines — financial loss, identity theft, and personal embarrassment (“just the thought of my text being hacked makes me feel uncomfortable”). Only one respondent out of 200 expressed serious concern about foreign government access to data or advertising use — the very issues that dominate policy discussions and regulatory frameworks. Another captured this disconnect perfectly: “I believe that my info is already being sold. So as long as no one is taking my earnings or stealing my identity, it is not something to stress over.”
This isn’t a critique or defense of policy priorities; it simply illustrates a critical product design challenge in the 2020s. Security features must satisfy two distinct aims: compliance requirements set in Washington (or, just as likely in Brussels), and consumer protections focused on personal loss, embarrassment, and inconvenience.
What did I miss? Email hworland@nea.com to continue the conversation.
Disclaimer
These consumer surveys was conducted among a representative sample of 200+ adults living in the United States, aged 22 - 35. The surveys was fielded using the Pollfish platform during December 2024. Pollfish partners directly with app developers; the developer defines an appropriate and specific non-cash incentive in exchange for completed surveys that benefit real consumers but doesn’t motivate them to become career panelists. Please note that as with all survey research, there is a potential for sampling error and other forms of bias. Results should be interpreted as an indication of sentiment among the target population rather than an exact measure.
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