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Evolution of the Experience Economy

Experience Economy

Previous generations sought status in the form of homes, cars and labels, but millennials are trading in a social currency that’s far less tangible. With 72% of millennials saying they would rather spend money on an experience than a material item,[1] the “experience economy” has seen rapid growth, opening up a world of opportunity for both brands and consumers alike.

For some brands, marketing to an experience-focused consumer is a natural fit. Airbnb, the online home rental provider, tapped into this insight with their debut television commercial, encouraging travelers to go beyond visiting a place: “Don’t go there, live there.” Expanding upon this tagline, Airbnb began offering “experiences” in addition to home rentals, through which customers can take classes, go on tours and book other cultural activities that aim to help them explore the city they’re visiting in a more authentic manner.

But a brand doesn’t have to provide tourism and hospitality services to participate in the experience economy. The act of using a product or a service is by definition an interaction, and savvy brands have harnessed that potency to foster a relationship with users. Coca-Cola® honed in on the communal aspect of consuming their product, and the resulting “Share a Coke” campaign launched a cultural zeitgeist, with soda drinkers across the country looking for a bottle bearing their friends’ (or their own) names.

Digital companies, like eyeglass retailer Warby Parker, have revolutionized the e-commerce space by adding interactive elements to the online shopping process. Consumers are sent their preferred styles to test out, which can then be easily purchased; Warby Parker will even reimburse the cost of frame adjustments at any eyeglass retailer. They’ve made the online transaction interactive without physically engaging with the consumer, creating a lasting impression that feels personal—a prime example of how brands can encourage experiences, even if they can’t directly facilitate them.

Another way that brands can make this economy work for them is by creating an interactive engagement adjacent to their product. Casper®, the direct-to-consumer, mattress-in-a-box retailer, recently launched a brick-and-mortar destination called The Dreamery, at which they literally sell the act of sleep: for $25, consumers can take a 45-minute nap on a Casper® mattress. Not just a novelty for sleepy passersby, it also serves as a creative way for potential customers to take the mattress for a test-run—something that Casper already provides to anyone who buys one of their mattresses in the form of a 100-night, risk-free trial. By turning the act of sleeping into a commodified service, Casper® has essentially created a new product category, one in which it is uniquely situated to flourish.

So, if millennial consumers have demonstrated that they will connect with brands that understand their desire for the personal and ephemeral, what experience will you create for your brand? The end-game of creating these interactions is not just to sell more product: it’s to create a lasting relationship with the consumer.

[1] http://eventbrite-s3.s3.amazonaws.com/marketing/Millennials_Research/Gen_PR_Final.pdf

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