Experiences have emerged as the next step in the progression of our economic value. Australian consumers are spending more on leisure and entertainment, and less on ‘things’. So, how can you adapt to changing consumer behaviour?
During the 2015/16 financial year, Australians spent $105 billion on things, with online shopping making up 7.1% of this figure ($7.46 billion)… ‘things’ like clothing, shoes, hardware, appliances, sporting goods, beauty products and the like.
Image Source: Roy Morgan Research
However, shopping for ‘things’ went down by 2% compared with the previous financial year. In fact, according to the latest data from Roy Morgan research, this decline in spending on ‘things’ is being counteracted by our increasing expenditure on experiences, including travel, wining and dining, entertainment and other leisure activities.
During the last financial year, Australian spent a whopping $137 billion on leisure and entertainment, up $10 billion for the previous year, a trend that had been building for some time now. That’s right, Australian’s are spending more in experiences than things.
Adam Schwab, managing director of Lux Group and founder of online travel business Luxury Escapes says that according to the company’s research, Australians are placing increasing value on unique experiences, which is great for his business.
“Our research indicates that Australians are placing a significant value on unique experiences as we become less materialistic and more experiential. We’ve found that packages with indulgent extras like spa treatments or memorable activities like cooking classes resonate incredibly well with our members,” Schwab says.
So, what does this ‘experiential spending’ mean for reatilers? This trend of spending more on experiences versus less things means that retailers are presented with a challenge, according to Michele Levine, CEO of Roy Morgan Research.
“The fact that Australians are spending more on ‘experiences’ (leisure activities outside the home) and less on ‘things’ (discretionary commodities) is one of the most striking findings of Roy Morgan Research’s latest retail-focused State of the Nation report. It also poses a challenge for retailers selling discretionary commodities,” says Levine.
This doesn’t of course mean that retail is in trouble, it just means that retailers need to adapt the growing desire for experiences and entertainment, using the knowledge in changes of behaviour to convert experiences into sales, according to Levine.
With changing consumer behaviour, comes the strength of online retail. E-commerce is more agile and adaptable compared with traditional bricks and mortar. So, if you’re an online retailer, here’s some food for thought – how can you add a little adventure into the user online shopping experience?
We’d love to hear from you. If you have any ideas on this, please feel free to add your thoughts in the comment box below.
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