The Future of Leisure: How Consumers are the Catalyst for Innovation

From rising inflation to shifting consumer habits, the landscape for leisure and entertainment companies has been rapidly evolving. And it’s shaping the way industry leaders innovate and pursue new products. 

During an hourlong panel, The Future of Leisure: Unwinding Through Innovation, experts across retail and investing explored how consumers are buying, how gamification has extended to the world of ETFs and how consumer spending increasingly reflects changing values. Here are their key takeaways.

Consumer Needs Take Priority

When it comes to innovation, understanding consumer needs is key. 

It’s no longer an “if you build it, they will come” world, especially when it comes to fintech and financial products, says Anna Paglia, managing director and global head of ETFs & indexed strategies at Invesco. “Clients very much know what they want… We create ideas and solutions that meet the needs of the client.”

This, says Paglia, means looking past the next “shiny object” and finding the trends that have long-term buyer potential. Paglia cites ESG as a “trend” that Invesco brought to market over a decade ago, building groundwork prior to larger investor adoption. 

Now, Paglia forecasts digital assets will be an important trend over the next decade, affecting many industries, including leisure. “We look at how trends today will be relevant to trends of the future,” she says.

Environmental Advocacy Drives Decision Making

From buying secondhand clothes to investing in ESG-related funds, consumers are considering the environment when they make their spending and investing decisions. 

“People are noticing fires everywhere, floods, and really hot summers,” notes Phil Mackintosh, chief economist at Nasdaq. “They are voting with their dollars, and putting their money into the ESG space.”

That same mentality extends into how consumers are shopping, says Renée Morin, chief sustainability officer of eBay. “We’ve done surveys that have found 80% of Gen Z consumers have bought used goods in the last year. And 1 out of 3 has also sold them,” she says. 

And she sees this as an opportunity, even as consumers face a potential recession. “Economic opportunity for all is one of our taglines,” Morin says, adding that the lack of stigma Gen Z has about secondhand shopping extends into how they interact and show up on the resale market. 

The Economy Remains Uncertain

The question in the headlines is one that economists are asking themselves as well: Are we in a recession? The answer still is unclear., but a reset is occurring.

Mackintosh sees the current environment as “coming off a sugar high,” adding that “the old demand six months ago is different.” Rising mortgage rates suggest signs the housing market is slowing down; credit card usage has been ticking up in the lower quintiles as stimulus checks have been spent, and it’s unclear how much rising interest rates will squeeze consumers. Plus, due to inflation, “consumers are spending more, but not getting more,” says Mackintosh. 

Added into this confusing climate is the acceleration of trends spurred by COVID-19 innovation. “Onshore automation is cheaper than offshoring jobs.” And this applies to the leisure sector as well. Mackintosh points to restaurants minimizing waitstaff to anchor in an automated experience. This is one workaround from the post COVID-19 labor shortage, but changes like this might shift job supply in the future. 

Customizing the Consumer Experience is Key

Morin says eBay has piloted programs to reshape the way consumers shop. One example is eBay Live, which allows buyers and sellers to interact in real time. This blends the brick-and-mortar experience with e-commerce in a way that caters to the site’s users.

eBay also launched a 3D true view — a feature currently in beta-test mode — that allows sneaker buyers to view the products in 3D. “They can see every angle; every stitch,” says Morin. “It’s allowing authenticity and trust in using the platform.”

Paglia agrees that she sees “mass customization of experience” to be a trend to watch in the future — which she sees extending into the ETF space. “The ease of access is really big,” she says. “Investors want exposure to something they’re passionate about, and they also want diversification.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.