The digital era promised us greater access. Instead it delivered information dispersion. Today the digital consumer has to manage their personal finances more and more like a corporation; AR, AP, collections, and extensions of credit. Let me explain.
In our pandemic-era reporting on the transformation of peer-to-peer commerce, Insiders #033: We’re All Retailers Now, we lament on the fact that the typical consumer that sells products in a digital marketplace is acquiring retail trade skills such as merchandising, inventory, and service management. Or, as we put it:
This proves advantageous for the younger generation, who are more entrepreneurial, more driven, and more willing to take risks than their older counterparts… Astute businesses will take advantage of this moment and continue to invest in Gen Z arbitrage to teach them business-centric skills, and to create tools to enable them to make their side hustle a lifelong skill to be put to work long after quarantine restrictions have become relaxed.
The lingua franca of commerce is second nature to the first social native generation, because to engage in community, for her, is to engage in commerce. C.A.R.L.Y. (Can't Afford Real Life Yet), a psychographic of a consumer who shares living expenses with others, is more prone to use digital wallets to enable the sharing of those expenses. The social media component of apps like Venmo and Public.com ease the digital adoption of sharing financial behavior, while enabling the fractionalization of living.
But what if it becomes too easy to adopt this behavior? You wind up with small amounts of liquidity spread around too many financial products — $20 in Venmo, $40 in Paypal, $50 stuck in StockX because mofos take forever to pay out. There are real costs associated with removing money from those p2p ecosystems, too. We’re acutely aware of the 2.5% ding that Venmo delivers if you need that money, like, right now. To live in the 2020’s is to be engaged in AR and AP on the human level. Real texts: Jesse, you still owe me from lunch last week — Venmo me.
It used to be that the calculation of net worth was a trivial task for 99% of the populace. But the world is more complicated today. A millennial HENRY (that’s High Earner Not Rich Yet) has half-a-dozen mobile wallets, crypto accounts, NFTs, fractional real estate investments, you name it. To get a 360-degree view of your net worth requires a suite of tooling that just doesn’t exist yet.
Thus, it’s my belief that we’re at the beginning of the agglomeration cycle, and rebundling of the industry. Look no further than Acorns’ recent acquisition of Pillar and Harvest, and the Goldman Sachs acquisition of Clarity Money that it is folding into its Marcus product, you start to anticipate a new breed of financial services emerging which will give greater visibility into net worth and asset management.
The entrepreneurial CARLY will benefit from having digital financial nativity in the era of fintech product agglomeration. After all, she’s growing up during a time where 1 in 2 children have a Roblox account, and management of their virtual currency Robux is a necessity to participate in its own captive economy.
CARLY will be the ultimate CFO of her very own 501c-ME.
For more on the fractional economy, read our most recent report Vision 2021: Ten Trends Shaping the Future of Commerce
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**Our team apologizes for this unfortunate pun.
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