Consumers are seeking meaningful and enriching experiences instead of accumulating products that risk becoming future physical and mental clutter. This provides radical opportunities for brands – to engage differently with consumers, and also to provide new services. Consumers are spending more of their disposable income on experiences and sharing opportunities, rather than material possessions.
The Experience Economy
On the face of it, those in consumer-facing service industries, such as hotels and restaurants, should also be able to immediately prosper from this shift towards experience, as people want to eat out, go on day trips and take more holidays. But experience-driven consumers are seeking variety, spontaneity and newness – the antithesis of loyalty. This might mean they are less interested in becoming regulars at their local pizza restaurant. Instead, they might seek out the new pop restaurant, street food experiences or be more willing to travel further from home for a unique dining experience. So what does this mean for the pizza chain? You need to think about novelty – creating seasonal specials, particular one-off events, or other ways to improve the experience for diners.
The other advantage of the experience economy is that it expands occasions as people are going out more regularly, and at different times. Dining out, for example, is no longer saved for special occasions. Now we go out because we are looking for a midweek pick up after a rotten day, or we forgot to buy the crucial ingredient for dinner, or because we want to hang out with our friends and there is no room in our apartment for a large table. British people routinely spend 25% of their income on eating out. And young people are eating out more than their elders, despite smaller salaries. We have seen the huge rise in brunch as a weekend socialising occasion – this creates innovation opportunities not only for the pizza restaurant (breakfast pizza) but also many other producers. Brunch has become an occasion where alcohol is acceptable, for example, but many brands have not yet seized this opportunity to market or innovate for this occasion.
Novelty has another advantage because it drives social media sharing. Of course some people post every meal ever consumed on their feed. But most of us don’t. For these ‘non-occasions’, your brand needs to create better opportunities for social media sharing. Most of us are unlikely to Instagram their margarita pizza on a regular Tuesday night in February. But if it is a limited edition topping, maybe? If the table decoration or plate is special? If the server is dressed for a particular one-off occasion? If it is national pizza night and everyone is using the hashtag?
Crucially, you need to investigate and truly understand what your consumers are really seeking from your brand and then determine what the experience should look like. Do they want the opportunity to spontaneously show up after work without a booking? Do they want a server that remembers what they ordered last time? Or is it the opportunity to telephone the order before arriving? And does the company understand why their diners might want to order before they sit down in the restaurant? Is it to save time for a date at the theatre, or to enjoy a pizza over a quick work lunch break? Is it to avoid the pre-dinner toddler meltdown? The key to success is not just about offering a service, but creating an experience that really meets the needs of your consumer base. You need the insight (or as Cris puts it empathy) to understand what your consumers are really seeking and how you can innovate.
To keep abreast of the shift towards experience, you need to think beyond industry norms. Take taxis. Taxi companies gave vague updates over the phone about how long they would take to arrive, took cash payments and issued minimal (often blank) receipt cards. Uber came along and gave accurate time updates, allowed you to speak directly to the driver, took card payments and issued online receipts, making travel less of a hassle. Just because your rival pizza chain doesn’t allow diners to pre-order their dinner doesn’t mean you shouldn’t be contemplating an app for that, if it turns out that is what your consumers would enjoy. And just imagine how many extra diners you could seat if wait times were reduced.
Can your brand answer yes?
- Are your providing novel ways to engage with your brand and encourage repeat visits?
- Are you thinking about your social media touchpoints, or more simply, is your ‘experience’ around a brand or product worthy of photographing and sharing?
- Are you aware of new occasions for connecting with the brand?
- Are you creating a personalised experience based on an understanding of the reasons why consumers are engaging with your brand?
- Are you thinking about how you can offer a quality service beyond industry norms?
The Sharing Economy
As part of this move away from ownership of material possessions and towards experiences, the sharing economy becomes more important. The sharing economy and the experience economy overlap, for example with the rise of house sharing apps such as Airbnb, misterB&B, and Nightswapping. But they should not be confused. The defining aspect of the sharing economy is access. Of course this may well be access to fabulous experiences, such as renting a sports car, beach side apartment or designer ball gown. Dogwalking and dogsitting is also popular for those like me who would love a pet but spend too much time away from home to be responsible owners.
Participating in the sharing economy is about being able to use a product or service without having to buy the item or experience up front and outright, or in the case of a car or dog, having the long-term responsibility for maintenance or well-being. So it could be that you don’t use a drill or camping equipment very often so you turn to the Library of Things. Or it could be that you know your children get bored or outgrow their favourite toys so you use pley.com.
Brands are particularly vulnerable to the sharing economy when their product or service:
- Has a high price tag (holiday home)
- Is used infrequently (car when you live in central London near the tube)
- Is valued for its newness or variety (clothes or toys)
- Carries expensive maintenance or ongoing responsibilities (dog or vintage car)
There is so much opportunity for innovation in the sharing economy – in terms of innovative solutions and platforms to offer new or existing products through the sharing economy. But what about existing brands who are at risk of the sharing economy?
How to avoid falling victim of the sharing economy if you are an established product or service:
- Could you establish your own platform for sharing your products?
- Could you develop a payment plan that makes initial outlay lower for your consumer?
- Are you innovating sufficiently so that the consumer will be drawn to the newness of your latest range, rather than wanting to borrow an older version?
- Are you in tune with your consumer to understand how your product could be used more regularly or be more useful?
As I have shown, people are favouring new, rich experiences over ownership of material possessions. There are huge opportunities to innovate to provide experiences around products. This can be new products, lavish activations that encourage purchase behaviour, or more old-fashioned things like service standards and knowing your regulars. It is more important than ever to understand the role that products play in the lives of your consumers.