In recent years there has been a drop in spending on products and a boom in spending on experiences.
This trend towards spending less on products shows no sign of abating; GFK’s Consumer Confidence Index showed a drop from +4 at the beginning of 2016 to -7 at the end of the year, indicating that people are curbing their spending. This is evidenced by the closure of high street shops; in October 2016 The Guardian reported that 15 close every day. Last year a senior Ikea executive explained this trend, “In the west we have probably hit peak stuff”.
On the other hand numerous studies have identified increased spending on experiences. This includes things like eating out, going to events and traveling. Research conducted by Mustard via online polls shows that this trend is driven by younger consumers; a third of 18-35s have increased their spending on leisure time compared to even 2 years ago.
Dubbed ‘the experience economy’, a key driver is technological advancements. New apps and services are changing the face of the leisure industry, by taking a gap in the market and making innovation possible; for example Airbnb have capitalised on consumer demand for experiencing life in a new place as a local, rather than just observing from afar. Whilst Uber have brought lower prices and improved service to the taxi market via their app.
Another key trend to emerge recently is consumers who are politically active; public relations and strategy firm the Global Strategy Group, found that public awareness of corporate stances on political events was higher than ever before in 2016. Born out of Brexit and the election of Trump, people are taking a stance and fighting for causes they believe in. People have become less shy of voicing their opinions, they are not afraid to say what they think and they are increasingly spending their leisure time doing just that – see Irina’s recent blog post. There is also widespread acknowledgement that businesses have the power to influence positive social change, and a belief that they should be doing this.
Keeping abreast of consumer trends ought to be a key priority for organisations who want to create effective strategies for the future. When thinking about out-of-home leisure in particular, key considerations include; understanding the prevalence of ‘the experience economy’ and how this can be facilitated by technology, and reacting to consumer demand for opportunities to be involved in causes that they are passionate.
To quote Lesley Bielby, chief strategy officer at ad agency Hill Holiday, on understanding the potential and relevance of using politics to engage with consumers within Superbowl ad breaks, “If you’re not culturally relevant, you’re not relevant—period”.
Monitoring, understanding and acting on trends is paramount for organisations to remain relevant.