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 An
Overview of an Emerging Economic Trend
Every
business is a stage. Every customer that walks through the door
presents an opportunity to perform for them; to wow them with sights
and sounds, to amaze them with visual displays and tend to them with
the most personalized interaction. There is a new economy that is
surfacing that will bypass the conventional and mundane ways of
conducting business and will incorporate these essential points of
connection with your customers. It is the emergence of the Experience
Economy.
Why would someone buy a cup of coffee and be willing to pay over 300%
the price of a coffee at a convenient store, or 800% more than a coffee
brewed at home? This is what occurs everyday to the tune of roughly
$500 million dollars a year in net earnings at Starbucks. The
experience that Starbucks customers receive from a particular store is
what brings them back. From the plush oversized chairs and the
exceptional customer service to the collective euphoria of relaxing
with friends, Starbucks has created an atmosphere that provides a
memorable experience to their customers.
People are willing to pay a premium for experience. Take an NBA game
for example. People pay hundreds, if not thousands of dollars, to
purchase seats that are courtside. Why? To experience the game. To
experience the smell of sweat and rubber, to hear the coach’s
encouraging speech as the players huddle together and to see the drops
of sweat slowly form on the players faces. All of these combined
provide an experience that you can only encounter from being that
close, and paying a pretty penny to get there.
The value that an experience holds for a certain individual determines
the worth of that experience. Take a family that is planning a vacation
to Walt Disney World for example. People do not travel to Disney purely
for the rides, but rather the shared experience that their family can
enjoy together. The vacation and the intricate parts of the day will be
a part of everyday family conversation for months to come. It is the
experience that they enjoyed together as a family that is priceless.
Walt Disney World just sets the stage.
In the restaurant industry in particular, the food service provides the
arena that an experience builds upon. Themed restaurants such as Hard
Rock Café, Planet Hollywood and Bubba Gump Shrimp Co. have done a
wonderful job of interacting with their customers. Customers need
to be engaged on emotional, physical, intellectual and even spiritual
levels when they experience your establishment. And no two customers
are the same. Everyone’s experience is individual. You need to connect
with your customer in a memorable way, whether it is through comedy,
art, architecture or some other means.
Rainforest Café has done a brilliant job of incorporating nature to
make dinner consist of more than just food. Throughout this
establishment, you will see life-size replicas of gorillas and giraffes
accompanied by real life sounds and movement. Every hour, the lights
start to flicker on and off and thunder and lighting sounds fill the
dining area. Guests feel as though they are in the middle of a jungle.
Rainforest Café draws the customer out of the ordinary eating
experience and adds a jungle safari to the menu.
Retail stores have also hit the mark combining entertainment with the
traditional store, also known as retailtainment, or entertailing. FAO
Schwarz is a perfect example. The store displays hundreds of plush toys
that customers can interact with. The most interesting and innovative
toys are strategically placed throughout the store to engage customers
to interact with their products. They want to position themselves as
the most interactive and playful store to shop at and that is exactly
what FAO Schwarz has done.
So why is the experience economy all of a sudden emerging? With the
rise in technological advances that have happened in the past decade,
companies are now able to think outside the box. Many ideas that at one
point seemed to be outrageous are now exactly what companies are
striving towards.
There is also an increase in affluence that directly affects the
frequency that people go out to eat. People are willing to “trade up”
and pay a little more for an experience that is memorable. Another
major factor in the emersion of this economy is that there is a rise in
competitive intensity. Companies are trying to differentiate themselves
through the experience that they deliver. They are using more
innovative and novel ideas to reach their customers by asking the
question, what can I offer that no one else can in a way that no one
else can?
“Staging experiences is not about entertaining customers, it’s about
engaging them.” The value of the experience remains with the person,
not within the establishment where it took place. The companies that
seize this economic value of experience will not only earn a place in
the heart of customers that have experienced their store, but they will
capture their money as well in the long run.
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