The Secret of the Experience Economy

One response.

The Experience Economy

The Experience EconomyWe live in a consumer society. Companies produce products and incent consumers to purchase. Media and marketing professionals build programs to create desire for those products, giving consumers more and more reasons to buy. And mass culture is created around building additional desire and compelling consumers to purchase.

But what happens when consumers have more than they need? And what happens when technology makes products irrelevant and unnecessary?

The answer to the first question is easy. When people have too much, marketers simply convince them they need even more.

  • Fashions change. Suddenly your beautiful Italian drape suit is out of style – you need to replace your loose, slouchy outfits with newer, skinnier ones.
  • Furniture manufacturers change. They go from producing solid heirlooms handed down from grandparents to parents to creating throwaway pieces replaced season after season.
  • Computer manufacturers redesign their products. Computers work faster and faster even though few users can exploit the enhanced capabilities. But no matter, we can’t resist the latest, the fastest, the newest.

The answer to the second question is more nuanced. Because while the steady wave of new technology does make many of the things we own obsolete, we continue our purchase pattern by replacing the outmoded with newly relevant devices.

  • Apple iPods replace Walkman and CD players.
  • Laptops replace televisions, typewriters, and checkbooks.
  • Smartphones replace iPods, laptops, wristwatches, and so much more.

In their book, The Experience Economy, authors James Gilmore and B. Joseph Pine chart the evolution from the agrarian economy, to the industrial economy, the service economy, and now to the experience economy.

The authors suggest that companies today must create memorable events for their customers. By doing so the memory of enjoying the product becomes the product itself. Gilmore and Pine further argue that as more and more products become commoditized, manufacturers must continue to evolve their wares to differentiate them.

But wait. As you move across the authors’ evolutionary ladder what disappears is the tangible product itself. Although this might not seem to be a problem at first, imagine what it does to conspicuous consumption. If one of the main reasons consumers buy more and more expensive products is to keep up with the Joneses, what happens when their money is not spent on a statusy car to show off in the driveway but an around-the-world trip or meal at an uber-exclusive restaurant?

Who’s going to see the experience if no one is present to share it?

Before continuing, let me make it clear that I am not a conspiracy theorist. I don’t believe people have much Machiavellian prescience. I don’t believe groups of people working sub-rosa can accomplish the things many conspiracy theories suggest they can. And I don’t believe any great group of people can keep a secret for a few days or weeks, let alone years.

That being said, Social Media in general – and Facebook in particular – is the great experience economy enabler. After all, the one way to transform personal experiences into status symbols is a democratized media that allows each of us to broadcast our activities to the world. This explains not only why the travel industry has embraced social media as its killer app, but why we are all so excited about projecting our lives and activities to the more than one billion people on Facebook and 100 million on Instagram.

The ironic Chinese curse was, “May you live in interesting times.” Today’s Experience Economy corollary could be, “May your life be half as interesting as it looks on Facebook.”

  One Response

  1. on January 20, 2017

    Bruce: Thanks for another thought-provoker!
    What is so easy to ignore, is that even social media will become passee’. Not worry, virtual communication in 3D is just around the corner.

    My falhter’s major lament was: “In our country we just have too much, and it’s killing us.”

    Stay well,

    David

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