The attitudes of young consumers stand to shift consumer spending, according to Jen Sullivan of Goldman Sachs Asset Management.
Sullivan says that when compared to their predecessors, Millennial and Gen Z consumers are more likely to value experiences over physical possessions. Given these generations’ rising prominence, “it’s no surprise that over the past 20 years, we’ve seen the share of spending on services rise considerably,” she says.
As the earnings power of these generations continues to grow, Sullivan predicts that “services stands to become a much bigger part of the global economy.”
The market impact could be significant as well. “For long-term investors,” Sullivan says, “we believe industries levered to experiences – such as travel and live entertainment – could be particularly appealing.”