United StatesA powerful shift in global consumer priorities is redirecting spending away from new goods and towards services and experiences.
Accelerated by generational, technological and cultural forces, digital services and experiences are capturing a greater share of consumer wallet. This trend supports structural opportunities for subscription-based digital content and online platforms for booking experiences, among others. Growing consumer preferences for second-hand goods meanwhile fuels demand for ‘recommerce’ platforms.
We believe that leading digital services businesses that can capitalise on dominant market positions, and innovate effectively in the AI era, look well positioned for resilient growth, irrespective of macroeconomic conditions.
Self-fulfilment over materialism
Consumer spending is of paramount importance to the economy, accounting for around three-fifths of global GDP.1 The trend towards spending on services that enhance lifestyle, rather than accumulating more physical products, is observed in both advanced and emerging economies, and is reshaping the landscape for consumer-facing sectors.
This evolution maps closely to Maslow’s hierarchy of needs: as material comfort becomes ubiquitous, attention – and so spending – is redirected towards the pursuit of fulfilment, connection and self-improvement.2 This premise is supported by research: 43% of consumers now believe they own more possessions than they need.3
While the trend began long before the advent of Instagram and TikTok – relative spending has gradually skewed away from material possessions and towards experiences for two decades – social media platforms have amplified the preference for shared (and sharable) experiences over traditional status symbols.4 Unsurprisingly, it is younger generations who appear to favour hedonistic pursuits over materialism.5
In parallel, global consumer spending is also increasingly online, hitting 20% of total expenditure in 2024 and expected to reach 24% by 2030.6 Within this, spending on digital goods and services – led by streaming platforms and content – has grown to 2.7% of total consumer spending, almost as much as electronics (3.5%) and clothing (3.9%).7
Again, it is younger consumers at the vanguard of online spending. In a global study centred on higher-income countries, 18 to 24-year-olds were found to be the highest spenders on digital services, parting with an average of US$101 a month.8
Source: Deloitte, 2023. Based on a survey of more than 100,000 adults in Australia, Canada, China, France, Germany, Japan, Italy, Netherlands, Poland, South Korea, Spain, the UK and the US.
Subhead: Estimated monthly spending on digital services by age group (US$)
Overview: This bar chart shows the average monthly spending on digital services by age group, based on the results of a survey undertaken by Deloitte in 2023. Within this, it shows spending on digital content, including streaming, for each of the six different age groups.
Overall, this chart illustrates how there is an inverse correlation between age and spending on digital services. The youngest cohort, aged 18 to 24, spend the most; the oldest cohort, aged 65 and over, spend the least. As a percentage of their spending on digital services, older generations spend more on content, although younger generations spend most of content in absolute terms.
Structural opportunities for digital services
The purchasing power of Generation Z is growing twice as fast as previous generations’ had at the same age and is on pace to eclipse baby boomers’ globally by 2029.9
As the spending power of younger ‘digital natives’ increases, we believe the shift online, and towards services and experiences, will only accelerate disruption to the consumer industry. This should support growth for innovative digital service providers aligned with evolving consumer demands. Three areas within this opportunity set stand out.
First, subscription-based digital content.
Consumer engagement with subscription-based services continues to deepen. Spending on digital subscriptions in the UK is up almost 50% since 2020, for example, with 88% of adults now holding at least one content-related subscription.10 The pandemic’s ‘insperience’ effect – where entertainment and learning moved inside the home – has entrenched preferences for content streaming and on-demand enrichment.
Within streaming, Netflix stands out as a market leader in the distribution and creation of high-quality entertainment. The company commands 8% of US television and streaming consumption and boasts more than 300mn paying subscribers globally.11,12
Within virtual learning – which accounts for 5% of digital goods and services spending – Duolingo is the leading mobile language learning app, with more than 10mn paying subscribers and 50mn daily active users.13
Second, platforms for booking experiences.
Since the pandemic, there has been a surge in spending on travel, live events and experiences.14 Growth forecasts are robust too: BCG predicts that the value of global leisure travel will triple by 2040, to US$15tn a year, driven by domestic trips and emerging markets.15 Online platforms dominate the travel booking market, with 55% of sales by value.16
Trip.com Group is the largest online travel agency in China, where domestic and outbound tourism are expected to grow at an annual rate of 7% and 13% respectively over the coming decade.17,18 The Hong Kong-listed company also owns Skyscanner, a global travel search platform, and has exposure to the fast-growing Indian market through a shareholding in the country’s leading online travel agency.
Third, ‘recommerce’ platforms.
Despite younger generations’ relative ambivalence towards buying new goods, one segment of goods-related digital consumption appears to be flourishing: recommerce, or the resale of previously owned, new or used products. According to EY, 38% of consumers intend to purchase more second-hand items.19
Platforms like eBay exemplify how digital services can facilitate more circular consumption while unlocking both value and income generation for sustainability-minded and price-sensitive consumers. Two-fifths of gross merchandise value traded on eBay relates to pre-owned and refurbished goods.20
We believe the structural growth opportunities arising in each of these areas will accrue to platforms that can successfully leverage the advantages of scale that are amplified in the AI era
Amber Fairbanks and Victor Benavides
Incumbents’ competitive advantage
We believe the structural growth opportunities arising in each of these areas will accrue to platforms that can successfully leverage the advantages of scale that are amplified in the AI era.
While barriers to entry in digital services are soft – upstarts do not need to invest billions in physical plants or equipment – incumbents boast the valuable advantages of brand awareness, customer trust and network effects, whereby the value of the service increases as more people use it. They can also leverage rich datasets on consumer preferences to improve user experiences, much as Netflix does to recommend content to individual users. This can further widen the economic moat over aspiring competitors.
Scale also enables incumbent platforms to invest in AI-driven tools that can improve the quality and personalisation of services. For instance, Duolingo’s AI tool, Birdbrain, analyses how well users perform on exercises to adjust the difficulty of lessons. AI travel assistants like Trip.com’s TripGenie, meanwhile, can provide customised itineraries.
Successfully leveraging the potential of AI should lead to a self-reinforcing loop between customer data, higher quality of service and greater retention or sales conversion. For example, by learning individuals’ behaviour, eBay’s algorithms can suggest increasingly relevant items for users to consider buying, leading to higher sales conversions and so revenues.
Additionally, the business models of capital-light digital service providers should prove resilient independent of macroeconomic conditions. Unlike manufactured goods, which have been subject to a recent wave of protectionism, digital services can generally be sold globally without obstructive trade restrictions. This makes them less vulnerable to policy disruption in the tariff era.
Positioned for durable growth
Consumer behaviour is undergoing profound structural change. Lifestyles are becoming more digitally integrated, and spending is migrating from possessions to services and experiences.
In this context, we believe platforms that leverage technology to efficiently offer tailored, high-value experiences, subscriptions and marketplaces should be well-placed to grow faster than the overall economy.
1 EY, 2023: When consumers want less but demand more, how will your business grow?
2 Maslow, A.H., 1943: A Theory of Human Motivation. Psychological Review
3 EY, 2023: Future Consumer Index. Survey of over 21,000 consumers in 27 countries
4 Frontier Economics, 2020: ‘Nownership’ and the Experience Economy
5 GWI, 2025: Gen Z spending habits
6 Capital One, October 2025: Online Shopping Statistics
7 Deloitte, 2023: An evolving world of digital goods and services
8 Deloitte, 2023: An evolving world of digital goods and services. A 2023 survey of more than 100,000 adults in Australia, Canada, China, France, Germany, Japan, Italy, Netherlands, Poland, South Korea, Spain, the UK and the US
9 McKinsey, June 2025: State of the Consumer 2025: When disruption becomes permanent. Generation Z generally refers to those born between 1997 and 2012
10 Barclays, June 2025: 10 Years of Spend
11 Nielsen, October 2025: The Gauge. Based on total broadcast, cable and streaming consumption, by minutes
12 Netflix, November 2025
13 Duolingo, November 2025
14 Barclays, June 2025: 10 Years of Spend
15 BCG, June 2025: Unpacking the $15 Trillion Opportunity in Leisure Travel
16 Navan, April 2025: 87 Facts that Tell the Story of Online Travel Booking in 2025
17 World Travel & Tourism Council, April 2025: China Surges Ahead: Travel & Tourism Sector Forecast to Hit a Record ¥13.7TN This Year
18 Research and Markets, October 2025: China’s Outbound Tourism Trends and Future Projections 2025-2033
19 EY, 2023: When consumers want less but demand more, how will your business grow?
20 CDP, 2024
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