One of the key challenges for traditional retailers is a shift in consumer spending toward experiences and away from material goods.
This change in tastes has contributed to the painful downward sales trend at many department stores and apparel chains, leading to shifts in spending toward health, wellness, travel, dining and other nonphysical categories. And it has led mall owners to adjust the mix of their properties away from retail outlets, increasing square footage for properties that offer experiences, such as dining, entertainment and fitness facilities.
A new survey of the US LGBT community underscores the challenges for the retail sector. The July 2017 survey by Community Marketing & Insights (CMI), an LGBT marketing consultancy, indicated a distinct preference for experiential purchases—whether vacations, event tickets or other services—over goods such as electronics, furniture or appliances.
Of the 16,000 respondents surveyed, 59% said they had booked a short vacation in the previous 12 months, the most commonly cited purchase. This was followed by a new smartphone, named by 51% of respondents.
The study found two-thirds of LGBT internet users reported spending less than $500 on new clothes in the past year. And just 5% indicated that they spent $2,000 or more on clothing for themselves.
The LGBT community is not alone in fueling the experiential economy.