The Experience Economy

The Experience Economy

The Experience Economy

In today’s vibrant, whirling economy, everything money or easy-credit can buy is almost instantly available. Abundant goods and services promise happiness. There seems to be no limit on what can be acquired-yet, consumer satisfaction is still illusive.

Today many economic observers are realizing the shortcomings of an economic system based on unrestrained materialism. They are predicting that consumer dissatisfaction is provoking a new economic era, which will herald a transformation as radical as the Industrial Revolution itself.

A new kind of economy is coming which will challenge the rationalist and materialistic premises now so woefully inadequate in an increasingly irrational and unreal world.

Authors B. Joseph Pine II and James H. Gilmore claim in their recent book The Experience Economy that society is reaching the point where traditional goods and services now offered are not enough. They say the future economy will be driven by the selling of experiences.

A Revolutionary Process

This “experience” economy is the latest step in the evolving economies spawned by the Industrial Revolution.

The first step was the Industrial Revolution itself, which ushered in an era of unprecedented production. Identical mass-produced goods and commodities flooded the markets. The consumer no longer shaped the product but adjusted his tastes to the products. Mass production gave rise to the amorphous masses.

During the Industrial era, the criterion of happiness was to acquire the greatest possible quantity of material goods. However, the superabundance of goods (and later services) reached a point of satiation. The rebellion of the sixties was but an example of how possession of unlimited goods did not satisfy human nature. People wanted something more.

Enter the Computer Age

That something else, transcending material goods, was information. The computer age opened horizons for twentieth-century man as broad as those the age of discovery opened for the fifteenth-century man.

The information age indeed transformed the world. The excitement of instant communication far surpasses that of staid material goods. Access to unlimited information and data seems to empower the individual beyond his wildest dreams.

The Internet literally puts the world at one’s fingertips. Authors like Alvin Toffler and Tom Peters spoke enthusiastically of the “new wave” of an information-driven economy that would herald the ultimate in consumer experiences.

Many authors are now saying, however, that the flood of information is satiating consumers just as the flood of material goods did. Traffic on the information superhighways is congested and frustrating.

The Information Age is barely thirty years old, but a new age stands ready to supplant it at breakneck speed.

The Experience Solution

The move to this new era comes from excessive information that lacks context and meaning. Downloading the whole Library of Congress would be worth little since the human mind is unable to digest, interpret, or focus on such vast amounts of data. The resulting experience is sterile and empty.

Many now claim the new commodity that will satisfy consumers is something that transcends both matter and information. In face of the insufficiency of information, the consumer will search for interior experiences as the only valid means for giving context and meaning to the monotony of life.

The experience economy will depart from the rational patterns of the past and be driven by a complex mixture of feelings, emotions, and dreams.

International business strategist Rolf Jensen in his 1999 book, The Dream Society, foresees a climate where “the market for dreams would gradually exceed the market for information-based reality. The market for feelings would eclipse the market for tangible products.”1

Experience as Product

The new “experience” market is not some future event; it is already happening.

While there has always been the experience factor in marketing, the new element is the emphasis on the experience itself. Once a free extra, the experience is now the central item sold. Services provide a mere stage, and goods are but props to engage the individual.

Today, manufacturers are explicitly designing their goods not only to enhance the user’s experience but to turn the product itself into an experience.

One no longer buys a car but a driving experience. A stereo is a listening experience; a meal a dining experience. Even the most insignificant things take on an experiential character. The manufacturer creates the imagery to support a reading, a sitting, a clothes-drying, or even a “briefcasing” experience.

Buyers of experiences will no longer buy the components of their events but whole events rich with sensations. Instead of buying a birthday cake, for example, they will buy the whole birthday party, in which the cake is a secondary element.

Indeed, Jensen predicts that in an emotionally defined market “the product itself will become secondary-the product will be an appendix, the main purpose of which is to embody whatever story is being sold.”2

Engaging the Senses

Central to the task of making goods experiential is embedding elements that appeal to the customer’s senses. Any good can be “sensorialized” by observing and accentuating the sensations engaged in its use. In this way the event becomes more memorable and effective.

“Automakers, for example, now spend millions of dollars on every model,” write Pine and Gilmore, “to make sure that car doors sound just so when they close. Publishers greatly enhance the covers and interiors of books and magazines with a number of tactile innovations (embossed lettering; scratchy, bumpy or ultra-smooth surfaces) and sight sensations (translucent covers, funky fonts, clever photos).”3

All the World’s a Stage

In the unreal world of the experience economy, work becomes theater and every business is but a stage for offering economic experiences. Today’s theme restaurants and parks are already staging artificial experiences around their well-defined themes. They immerse the consumer in another world, blending education, entertainment, nostalgia, and adventure. Virtual reality industries provide similar experiences.

Barnes and Noble, for example, engages people in a social experience of books with its reading cafes. Cracker Barrel sells the nostalgia of experiencing a past America that no longer exists.

Experience stagers (that is, manufacturers) will script their story with all the features of a Broadway performance. The idea of a story will move away from mere books, movies, and entertainment to actual consumer retail products. Nike, for instance, created Nikeland in Chicago “as a theater, where our customers are the audience participating in the production.”4

Pine and Gilmore foresee a time when shopping malls will be so experience-oriented that consumers will pay admission to shop. They claim this “Disneylandization” of commerce will make experiences the main driver of the future economy.

The Spiritual Dimension

Past economies held stubbornly firm to their materialistic underpinnings, refusing to consider the spiritual. The experience economy departs from the past by affirming spiritual or even ideological realities.

By the mere fact that experiences are intangible, they take on a spiritual dimension. Moreover, lasting personal experiences often bring interior transformations. Thus, worldviews and ideologies will become a legitimate domain of business. “Transformations,” write Pine and Gilmore, “turn aspirants into a new you with all the ethical, philosophical, and religious implications that phrase implies. All commerce involves moral choice…. All economic offerings do more than effect an exchange of value in the present; they also, implicitly or explicitly, promote a certain worldview.”5

Such affirmations imply that the new experience economy is a dangerous tool of the cultural revolution now undermining the moral, cultural, and religious foundation of the nation. An economy based on emotions and feelings can promote a similar worldview where principles are all but ignored. Subjective “New Age” philosophies can find economic expression in the mystical experiences offered.

The Catholic Balance

In a Catholic society based on temperance, the intellect and reason govern feelings, emotions, and experiences. Christian virtue keeps the soul in order. Grace sanctifies and strengthens men in this vale of tears as they strive toward perfection and heaven.

Traditional Catholic society avoided the extremes of the modern economy and kept a most admirable balance. It neither affirmed a cold rationalized economic order nor adopted an emotional existentialism.

Medieval men took into account that human societies are living things that cannot be planned or explained as a machine. A proper society leaves much room for spontaneity and experience. However, the person’s intellect always governs and observes these experiences, takes lessons from them, and incorporates them into his thought. This splendid balance turned tradition, myth, and ceremony into experiences that provided a sense of purpose and ultimate meaning.

“Shared experiences and a sense of the past,” writes author Richard Stivers, “are a motivation to conserve what is the best and to avoid the harmful in creative ways that actually make history.”6

Contrary to the experience economy, traditional society created real and meaningful experiences. It did not need the empty and plastic experiences of a “Disneyized” world.

Men lived knowing that life is not artificial theater but a reality in the shadow of the Cross. There, medieval man found true happiness and anticipated the heavenly happiness that he would experience for all eternity.

Footnotes

  1. Rolf Jensen, The Dream Society: How the Coming Shift from Information to Imagination Will Transform Your Business (McGraw-Hill, 1999), p. 4.
  2. Ibid., p. 53.
  3. B. Joseph Pine II and James H. Gilmore, The Experience Economy: Work is Theatre and Every Business a Stage (Boston, Mass.: Harvard Business School Press, 1999), p. 18.
  4. “Niketown Comes to Chicago,” Niketown Chicago Press Release, July 3, 1992.
  5. Pine and Gilmore, op. cit., p. 183 and 206.
  6. Richard Stivers, The Culture of Cynicism, American Morality in Decline, (Oxford: Blackwell Publishers, 1994), p. 91.

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