In line with the current societal trend favoring experiences over material possessions, new research from Mintel reveals that consumers are more likely to spend their discretionary dollars on experience-focused categories in 2018 as compared to a year ago, with entertainment (39% in 2018 vs 25% in 2017) and dining out (38% vs 30%) ranking as the top ways consumers spend their extra income. Rounding out the list of the top three ways consumers are spending their extra dollars this year is on travel (35%). Overall, 58% of Canadians value experiences more than things, according to the research.
Although experiences are winning over consumers, debt reduction remains a priority. One-third (33%) of consumers are putting their discretionary money toward paying off debt this year, which was the top priority in 2017. What’s more, a number of consumers may hold lingering memories of leaner times and putting their money toward saving up for the future as interest in spending discretionary dollars on investments has also shown a lift over last year (27% in 2018 vs 22% in 2017).
An improved perception of financial health is working to create a less conservative attitude toward spending and inspiring consumers to splash out on experiences. This year, some 43% of consumers see their financial situation as “healthy,” meaning they have enough money left over at the end of the month for a few luxuries or treats, an increase over the 36% who said the same in 2016. What’s more, the majority (54%) of Canadians today agree that their financial goals are attainable; while around four in five Canadians say they have already or will be able to save money (87%), pay off debt (85%) or have a comfortable retirement (78%).
Overall, consumer expenditure increased 3.4% in 2017 over the previous year. Mintel forecasts that total consumer expenditure will grow at an average annual rate of 2.8% through 2022.
“Positive economic conditions such as low unemployment are leading Canadians to feel especially confident about the state of their finances this year, so much so that many consumers have shifted their priorities from paying off debt toward spending their extra dollars on experiences. This trend in experiences over things is seen as more emotionally rewarding for consumers and allows them to create memories with others. This is a boon for non-essential categories such as dining out and entertainment—areas that consumers had taken a step back from in previous years owing to a more conservative approach to spending that has been alleviated over the last year,” says Carol Wong-Li, senior lifestyles and leisure analyst at Mintel.
Recent headlines and current events from around the world are bringing the issues of tolerance and acceptance to the forefront and it seems Canadians are embracing these qualities across generations. Some 65% of consumers overall agree that equality is an important Canadian value, including two in three (62%) consumers aged 55+, and rising to three in four (74%) consumers aged 18-24. What’s more, 52% of Canadians say that diversity is an important value, including 46% of those aged 55+ and 61% of those aged 18-24.
Overall, the top values consumers are most likely to take pride in are freedom (75%), equality (65%), being open-minded (60%) and polite (57%). And with the majority (74%) proud to be Canadian, patriotism (23%) rounds out the list of top Canadian values.
“At over 35 million people, Canada’s social fabric is becoming ever more diverse as immigration continues to drive population growth. Diversity is being seen more and more as a key defining value of what it means to be Canadian, so much so that it is shifting how consumers think of ‘mainstream’ Canada. This sensibility is reinforcing the cultural mosaic of the country where ethnic backgrounds and societies exist side by side. Moving forward, brands not only need to consider messaging around inclusiveness, but also that the voices of the various ethnic groups are growing and want to be heard. The time is ripe for marketers to connect with consumers through offerings that include an experiential element and messaging that reflects Canadian values of inclusiveness, open-mindedness, and diversity,” concludes Wong-Li.