Marketing / 04.08.19
The New Reality of the Experience Economy
The phrase “experience economy” keeps creeping into daily life. In case you’re not familiar with it, let’s start with Wikipedia’s entry:
The term “Experience Economy” was first used in a 1998 article by B. Joseph Pine II and James H. Gilmore describing the experience economy as the next economy following the agrarian economy, the industrial economy, and the most recent service economy. The concept had been previously researched by many authors.
Pine and Gilmore argue that businesses must orchestrate memorable events for their customers, and that memory itself becomes the product: the “experience.”
And, most interestingly, their book is titled “The Experience Economy: Work Is Theater & Every Business a Stage.”
You’re probably thinking, “What the heck? We’re already in the experience economy business!” Yes, what arts organizations do is indeed produce experiences. But though that may be technically true, the rules of the game are changing rapidly and in a way that will propel all organizations to change what they do.
Where’s all this coming from, and why is it relevant? My thesis emanates from the “Amazon Prime-ization” of the world. If every object that you used to buy at a store can be purchased online quicker, easier, and likely cheaper, then unless the store provides some kind of meaningful additional value, you’re not going to bother going there to shop. Stores that are nothing more than inventory pickup locations are going out of business. According to Business Insider, over 3,800 stores shut down in 2018 alone.
For retailers that sell commodity products (which means almost anything branded that you can find at almost any store), there’s no compelling reason for shoppers to go there. If you’re shopping for clothes you may want to try on, then sure — but services like Stitchfix and TrunkClub aim to solve that problem too.
Thus retail stores have had to rethink their relevance for consumers, and they are becoming more and more experience oriented to lure buyers in. Stores now have DJs, food and music, and even free massages. Malls are providing live events of all types. Recently at the Madrid airport, I came across a stage with a violin and piano duo performing in the waiting lounge to make the airport more of an experience.
All of this raises the bar in terms of what arts organizations and live entertainment events must provide to patrons. Recently at an experiential marketing conference, a presenter stated that retailers are changing how they measure their performance, from a “revenue per square foot” metric to an “experience per square foot” metric. Have you heard of or been to the Museum of Ice Cream? Even though it’s not a store per-se, it’s entirely about experience per square foot!
This brings me back to your organization within the realm of the traditional arts. Yes, you produce experiences. But the time has come where the experience cannot simply start at 8 p.m. and end at 10 p.m. Think about how the entire time your patrons are onsite could be curated as an experience. From the moment your patrons enter your venue, what’s the experience like? Is there ambient music? Is there a creative food offering — a chef or a tasting station? Do you have a selfie booth or another kind of creative experience? What are your staff members wearing, and how are they trained? Are there surprises before the show? At intermission? After the show? What about in the parking lot?
I feel some of you cringing, lamenting that “the show should be enough” and that you’re already maxed out in terms of what your staff can reasonably do. You’re right to worry. But know that the bar is being set higher and higher all around you. And whatever experience your organization is providing today will have to measure up to an entirely new and emerging experiential reality.
This article was sponsored by Patron Technology.
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Tags: Consumer Preferences , Venues