Consumers opting for experiences over items

Consumers are opting to spend more on experiences, with a poll from Barclays suggesting that consumers are increasingly choosing experiences over purchases.

The spend data shows that consumers are predicted to spend a total of £178 billion on these activities between June and September this summer, averaging £3,322 per person (median consumer estimate: £701).  While some of this money will be spent abroad or on imports, the UK also stands to benefit. Modelling by Barclays and the Centre for Economics and Business Research (CEBR) reveals that the UK’s ‘Experience Economy’ – encompassing all businesses that provide consumers with unique and memorable experiences – contributes an estimated £134bn to the broader UK economy, a figure greater than the GDP of Morocco.

Individually, almost half (46 per cent) of the £3,322 average will go towards holidays abroad (£906) and staycations (£615). Other notable activities include live entertainment (£435), attending sports events (£295), and trips to the seaside (£143).

Predictions among younger consumers are actually higher than older consumers, likely due to many entertainment activities targeting younger audiences, as well as those consumers typically having fewer dependents and therefore able to put more of their disposable income into the Experience Economy. Those aged 18-34 expect to spend £5,531 on average (median estimate: £1,751) whereas over 55s say they’ll spend £2,123 (median estimate: £537).

Six in 10 (57 per cent) say they would rather spend money on a good experience than on buying material possessions, up 5 percentage points compared to corresponding Barclays research from 2018, and nearly two thirds (63 per cent) would rather tell people about something they have experienced rather than something they have bought. Similarly, four in 10 (44 per cent) are actively seeking out new and unique experiences to make the most of the summer – a figure that rises to 61 per cent for 18 to 34-year-olds.

Barclays Consumer Spend data has charted the Experience Economy’s rise for some time. In the last 12 months alone, annual spending on entertainment and travel has increased by 6.5 per cent and 11.6 per cent respectively, outpacing the growth in non-essential spending more broadly (up 3.4 per cent).

In particular, spending on shows and concerts is up 4.8 per cent year-on-year, thanks to ticket sales for major events – a trend brought to life in Barclays’ recent ‘Swiftonomics’ research, which revealed that Taylor Swift fans attending the Eras Tour are predicted to spend a total of £997m (£848 on average per ticketholder) to see their idol perform live in the UK this summer.

A quarter of consumers (25 per cent) say they plan to spend more on experiences and events this year than last year, with this trend even more prevalent among younger consumers aged 18-34 (32 per cent) – while 44 per cent plan to spend the same as last year. A desire to make the most of summer (38 per cent) and wanting to invest in quality time with friends and family (31 per cent) are the main reasons for this increased spend.  

However, businesses will have to raise the bar during the summer period to keep consumers engaged, as a fifth of consumers (18 per cent) say they have higher expectations of experiences this year compared to previous years. Half (50 per cent) of these consumers say that their standards are higher because the experiences they are going to are more in line with their passions and interests, while over a third (35 per cent) say that they expect better value for money as events cost more than they used to.

Rich Robinson, Head of Hospitality and Leisure at Barclays, said “Brits are increasingly swapping shopping bags for shared moments, and we expect spending on experiences to reach a new peak this summer. Whether it’s a once-in-a-lifetime holiday or a birthday celebration with friends, we want our experiences to be bigger and better than ever before, and our standards have never been higher.”

“From top-notch sports events to fast-growing companies changing what it means to have a great night out, British businesses are evolving to ensure they’re not just one-hit wonders – they keep crowds coming back for more.”

Dr Peter Brooks, Chief Behavioural Scientist at Barclays, said “The excitement of buying new furniture, a TV or smartphone tends to disappear relatively quickly as those items get normalised into our everyday lives. However, the memories created from spending on experiences, especially when it’s with family or friends, has been linked to longer-term boosts to happiness as the memories created live on when we reminisce about those shared moments.

“We’re witnessing a long-term behavioural shift that will see experiences like travel and live entertainment take up a greater share of our discretionary spending, certainly this summer but also into the foreseeable future.”