Saturday, June 6, 2020

Social media boosts leisure spending as consumers seek new experiences

The first quarter of 2019 saw leisure spending off to a good start, up two percentage points from Q1 2018, according to Deloitte’s latest Leisure Consumer report. The quarterly survey of 3,000 UK adults found that consumers continue to seek unique experiences rather than material things, a trend perpetuated from the previous quarter. An uptick in leisure spending in Q1 correlates with consumer confidence, which also edged up over the same period.

Despite some caution over Brexit uncertainty, household incomes remain consistently high and consumers intend to spend more across all leisure categories in the coming quarter.

Doing it for the ‘gram

More than a third (36 per cent) of consumers aged between 18 and 34 stated they would treat themselves to experiences, such as going out to restaurants, bars and the cinema instead of shopping for clothes or shoes.

Simon Oaten, partner for hospitality and leisure at Deloitte, commented: “In the age of social media, the tendency for consumers to document and share their lives digitally has grown. Consumers don’t just want a good product but also the experiential aspect, be it an in-store exercise class, or distinctive décor to form the backdrop of social media posts. Experiences have become a new ‘currency’ in social interaction, and a way for consumers to distinguish themselves online.

“The wider leisure sector is also providing innovative offerings to those consumers who recognise more negative impacts of social media or smartphone use. For example, we are starting to see hotels and spas offering digital detox retreats, and cafés that promote a culture of ‘switching off’ by not offering Wi-Fi.

“The future of the high street relies on its ability to combine physical retail space with experiential leisure. Businesses that have flourished so far are those that have struck the right balance of both.

“One good example is the way in which delivery companies are increasingly becoming an online gateway within the casual dining sector. Through digitally engaging consumers and providing added convenience, delivery companies are becoming the intermediary between consumer and restaurant. Eateries that create reasons for consumers to dine out will be better positioned to navigate the margin pressure disruptors may bring.”

We’re all going on a summer holiday

Q1 expenditure on big ticket experiences such as culture, entertainment and live sports events, was at its highest level since the same period last year. 10 per cent of consumers also spent more on long holidays in Q1, with the rest of the year’s outlook looking similarly sunny.

Oaten said, “Holidaymakers are increasingly veering off the ‘beaten track’ to seek a unique experience. As a result, new flight routes are jetting consumers off to lesser-known destinations, and holidays offering classes, workshops and wellness experiences are on the rise.”

The latest data suggests that in the second quarter consumers will favour short breaks over longer holidays. Net spending on short breaks is up by four percentage points compared to a year ago, while intended spending on holidays is up by only one percentage point.

Oaten continues, “For today’s leisure consumer, experience is everything. Successful businesses will be those that offer something different and unique to leisure consumers, giving them a reason to try something, or travel somewhere, new. Looking ahead, four in 10 consumers are positive about their personal finances for the rest of the year, but Brexit uncertainty will continue to create some consumer caution which could deter some spending.”

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