PART ONE
The Experience Economy now owns us.
What is it?
The Experience Economy, as you know, is the shift from the purchase of goods to purchase of personal experiences. This shift should not have surprised anyone, certainly no one in marketing or social media or even psychology. In our ancient digital history, 1998, two guys you never heard of (for the record, James H. Gilmore and B. Joseph Pine II) predicted this in monumental terms, stating that the Experience Economy would be the next great economic revolution (following agrarian, industrial and service for those wondering). Brilliantly, they stated that it was the generated memory itself that would become the product. Absolutely correct.
Personal Consumption Experiences (PCE) spending is now growing almost 4 times faster than spending on physical goods according to McKinsey. By 2030 (only as far in the future as 2010 is in our past) some projections estimate the global Experience Economy to reach $8,000,000,000,000.
Why is it?
Simply, people often like experiences more than they do new “stuff”. Certainly Millennials do, 72% prefer to spend money on live events rather than physical products and that includes virtual reality. But it is not just Millennials. A San Francisco State University study found that all of us are happier when we purchase experiences rather than products. One major reason, according to the Journal of Personality and Social Psychology, is because we can share our experiences with others. Note your favorite social media sites now. We all do it.
That yearning to share, to validate ourselves, is partly driven by FOMO (Fear of Missing Out), with 56% of social media users afflicted and even more so among Millennials, at 70% according to a Harris poll.
This is not to say that things, our multiple new “stuff" we purchase, do not make us happy. They do! A new car, new iPhone, new shoes, dress, sunglasses, grill, all make us happy. But…not for long. In time, we are victims of “Hedonic Adaptation”, no matter how happy something makes us feel, we tend to revert back to our emotional state pre-purchase. But Experiences tend to make us happy longer, and forever intermittently. The memory is often renewed with photographs, so much so that for some, if there is no photograph of the event to share, it is the same as if it never happened. Almost like buying stuff.
How is it?
Ask any corporate event planner, travel planner, etc. and they get it. All of the planning, the staging, entertainment, all of it is done to create one thing, an experience to remember. The better the experience, the deeper the engagement with a brand, venue or event. Companies go to great expense to create deeply engaging, memorable experiences and the best of these include a digital (or even print) record of memories, to be shared of course. Part Two of this article will touch upon the most creative and tech savvy way to make photographs, to share photographs, concurrent with the experience itself.
Steven Bustin