The CQ: Human-in-the-loop commerce
Expertise, not content, offers a sustainable and productive way for creators to work for themselves
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Buzzing at the Forerunner Office…
Human-in-the-loop commerce will define the next decade of the creator economy
By Brian O’Malley, Partner
During the pandemic, the influencer officially evolved into the creator, becoming a creator became the preferred way to work for yourself, and being a creator meant more than posting content and gaining followers. In fact, an emerging ecosystem of startups enabled creators to launch and market a full assortment of one-off product and service offerings, including coaching, classes, merch, and digital downloads. And fans bought what creators sold – according to a Forerunner survey at the beginning of 2021, nearly 45% of consumers ages 18 to 29 reported buying a subscription, product, or service directly from a creator in the past year.
But, as we discussed in our July CQ piece, reality has taken hold in 2022. And the turmoil we previewed has played out further this fall. Patreon, one of the earliest and largest creator-focused companies, recently laid off 17% of its employees and announced it is scaling back on its creator-partnership team. Cameo, an app that connects celebrities to fans, also had layoffs this year, affecting a quarter of its workforce. Substack, a company that helps writers offer subscription newsletters, let go 14% of its staff. Meanwhile, on the creator side, the hustle and hours required to keep up with the ever shifting social networks and unrelenting need for content continues to daunt.
This is where the potential of human-in-the-loop commerce comes into play. Today, most online creators are fundamentally still content creators and they are challenged to unlock meaningful income for the contributed effort. In turn, fans are often making one-time purchases from a desire to be supportive instead of a need for the product or service.
What if there was a different way? What if expertise, rather than content, became a creator’s wedge and human-in-the-loop commerce became the most viable path to working for yourself? Platforms specifically built for a creator’s expertise can provide the structure and playbook for repeatability and a strategy for translating knowledge and passion into a high-value and high-touch exchange of goods and services between consumers and experts. The platforms stand in stark contrast to the alternative of churning out content and remaining beholden to the social networks, while the expertise taps into a growing consumer desire to learn, make informed purchase decisions, and access unique and compelling experiences.
This human-in-the-loop lens toward creators has already inspired several of Forerunner’s investments in the past two funds, including Metafy, Fora, Curated, ShopShops, Stan, and The Expert. Curated, for example, pairs knowledgeable and passionate experts with consumers for high-consideration and high-ticket online purchases. The experts on Curated earn commission for supporting the purchase journey with personalized recommendations and consumers build conviction in making the right choice. Fora, on the other hand, aims to reimagine the travel agency and provide a tech stack for wanderlusts to become agents. Consumers value the service and access agents provide while expert travelers have recommendations and experiences they can share and monetize for the first time as advisors. Curated and Fora both offer the set up for creators to be get started and be successful. Before these companies launched, you could imagine creators in their respective areas of expertise pursuing the exhausting content hamster-wheel with limited upside.
Despite the hype of the pandemic, it’s important to remember that we are relatively early in the creator economy cycle. No doubt there’s a top echelon of traditional content creators that will endure. These media-focused businesses can work for the largest creators, but transaction businesses might be a better option for those with a greater focus and a tighter reach. At Forerunner, we believe expert creators will ultimately prove to be a larger, more sustainable and productive group of people working for themselves. And with social networks moving away from commerce, a window has opened for these entrepreneurs.
This Week’s Top 10 Consumer Insights
Even after inflation levels off, prices for “sticky” items are likely to remain high. Sticky items, which include household furnishings, personal care products, alcohol, haircuts, and car repairs, tend to have costs resistant to change, while “flexible” ones, such as gas, fresh fruit, and clothing, have price changes more frequently than every four or so months.
Forty percent of consumers say that inflation will affect their holiday shopping decisions. Almost a third plan to shop a month early, 41% are looking for coupons, discounts and sales, 40% will buy fewer things, and 21% will opt for cheaper brands.
In the wake of a tough economic climate, Amazon launched Amazon Access, a hub for discounts, coupons, and deals as well as offering options for payment with SNAP EBT and Amazon Layaway. The newly named Prime Access allows Prime membership to eligible costumes for $6.99 instead of $14.99.
TikTok will partner with TalkShopLive to launch its live shopping platform in North America. This move follows the social media platform’s struggles with e-commerce in the UK.
Macy’s launches a third-party digital marketplace for sellers. The company’s CEO said this curated marketplace, which will be integrated into Macy's website, will address the demand for different brands the retailer did not currently offer.
According to a new study, 70% of Gen Z and Millennial consumers would like to receive a gift subscription for the holidays. About half of them said that they would continue the subscription once the gift period expired if they enjoyed the subscription.
The South Korean internet giant Naver announced plans to buy secondhand retailer Poshmark for $1.2 billion.
If you check out TikTok, you’ll see tons of examples of Gen Zers struggling with their inflation woes. But according to economists, they have it easier than older people.
REI ditches Black Friday forever. After seven years of being closed on the day after Thanksgiving, the sporting goods retailer has opted to make the decision permanent.
West Elm is partnering with Roblox to create West Elm Home Design. The virtual environment will include replicas of the brand’s furniture and decor to customize virtual homes.
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