What lies beyond the experience economy?

Since the 1990s, the experience economy had become so entrenched in contemporary culture that, until the disruptions of 2020, consumers could hardly imagine a different way of engaging and transacting. Purchasing behaviour driven by creating memorable experiences had become a way of life and was fuelled by the ability to share these experiences on a proliferation of social media platforms. Sharing an activity – from something as simple as having brunch on a Sunday to going zip-lining – intensified the experience and made it more meaningful. But, just like that, COVID-19 put the brakes on this way of doing things, both economically and socially.

Suddenly, pursuing and sharing experiences became all but impossible, hitting the retail, tourism, hospitality, events, higher education and entertainment sectors hard. Yet while Covid may have accelerated this shift away from the experience economy, there were signs that a transformation was taking place well before its untimely arrival. Especially since the advent of online shopping, physical retail has been in decline. The retail space, always a staging platform for consumer experiences, has been losing its appeal for some time, and foot traffic has dropped off markedly in recent years.

Enter the touchpoint economy
A more fundamental change has been taking place. The democratisation of the media and the reach that social media provides, has introduced an entirely new factor into the transactional space: the influencer. This means that the personal recommendation, a cornerstone of marketing from its very earliest days, has taken on an altogether new and powerful dimension; it has become a touchpoint.

As early as 2015, Variety magazine reported that, especially for youth audiences, recommendations made by influencers had started to carry more weight than celebrity endorsements. Savvy young consumers had come to understand that celebrities are paid for their endorsements and that their brands aren’t fundamentally tied to the endorsements they make. Influencers, on the other hand, are the brand. They have to protect their personal reputations in order to maintain their influence, which means that their recommendations are more dependable and, as importantly, are based on personal experience.

Five years on, the voices of influencers carry even more weight. Research conducted by Twitter has found that users report a 5.2 times greater intent to purchase if they have been exposed to promotional content posted by influencers, while 49% say they rely on recommendations from influencers when making purchasing decisions. And influencer marketing platform, MuseFind, reports that 92% of consumers trust influencers more than ads or even celebrity endorsements. While this obviously doesn’t mean the demise of the experience economy, it does mean that consumers are recalibrating their relationship to the socio-economic environment and that their behaviour is changing.

The self-development trend
A parallel trend has come to the fore since the advent of the pandemic. Daily routines have been disrupted and many of us are not only working from home; but spending most of our leisure time there too. With fewer external activities to occupy us, we are using our time to focus on ourselves – on self-development, self-care and general wellbeing. This means that experiences have become more than just moments to be shared, they’ve become transformational activities.

With an eye on this trend, brands are offering their customers ways in which to change their lives and are embedding purchasing opportunities within them. They are now offering online courses in everything from cooking to fitness, weight loss, sewing and baking. Learning institutions – even universities – are offering courses in subjects as diverse as digital marketing and art. The list goes on.

Change isn’t optional
Of course, shifts like these aren’t always easy to navigate. Making the transition from selling experiences to being a lifestyle touchpoint won’t be easy either. But in such a fluid environment, in which consumer behaviour is changing so rapidly and fundamentally, we have to make the transition – and quickly. Consumers expect brands – especially their favourite brands – to adapt to changing circumstances. Right now, they need them to understand this shift from experience to meaning – and to provide those special touchpoints that will have a positive and lasting impact on their lives.

Originally published on: www.retailingafrica.com