Experience Economy: 3 trends for 2020

The concept of ‘experience economy’ is not new, but clear recognition and awareness of it by businesses is now driven by the possibilities offered by the digital age and growing use of so-called edge devices (smartwatches, smart TVs, smart cars, home assistants… ).

Joseph Pine and James Gilmore theorised about us, as modern consumers, and woke us up to the reality that we seek something more from economic transactions; that a purchase is no longer just a simple exchange of money for a product or service. We are ever more demanding, and we increasingly seek memorable experiences. That’s why the authors argue that every sale to a customer should be treated as a standalone event.

But when does a service make the transition and can be considered an experience? When it is highly customised. As Joseph Pine said, “There’s an antidote to commoditisation; and it’s called customisation”. When we design an offer that is completely appropriate and perfectly customised for a particular customer, we move beyond service to a value-added experience – and, in fact, we are willing to pay a much higher price to enjoy this.

One of the typical examples of this ‘fourth dimension of economic supply’ is Starbucks. When we go to Starbucks, we don’t say we’re going to have a cup of coffee – because we’re not. What we really look forward to is the experience; the decor, the aroma, the barista coffee shop, the special Halloween or Christmas editions, meeting up with friends and because we’re always treated as a unique, special customer. We even get called by our name. At Starbucks, a simple commodity – coffee – becomes a true premium experience. And that’s the secret. Look at other similar examples such as Uber, Spotify or Airbnb.

Currently, the possibilities of offering differentiating experiences to consumers are endless, with all the technology that we have available and the amount of data that we can collect, and mobile applications will have to be a strong bet if companies want to really retain their customers. For example, what a consumer with small children wants is a notification that milk or nappies are on offer today, right as they walk through the doors of the supermarket, even if these items were not on their shopping list – experience!

3 trends for 2020

1. Operational data vs. experience data

“Data is the new oil”, right? Right. However, is the data collected today what a brand most needs to be able to give its customers the best experience?

In the experimental economy what really counts is emotion, feelings and values. And data collection is often focused on operational data without taking into account these more human aspects. Therefore, as mentioned in the talk Customer Directions: Five-Star Experience Economy, regarding the IDC Directions 2019, companies should focus on 5 fundamental principles:

  • Personalisation (get to know your customer and talk to them to in order to understand their lifestyle, consumption habits, etc.);
  • Trust (sending the message to customers that the brand will never fail them);
  • Empathy (respecting every customer and their emotions);
  • Delivery; and
  • Engagement (ability to relate to consumers).

With the customer at the heart of companies’ concerns and with systems prepared to gather this kind of insight – with powerful CMS, for example – it will become easier to use what they know about us to our advantage.

2. Personalisation, personalisation, personalisation

The personalisation of interactions must be assured throughout all communications. It is not enough for us to receive different emails from our friends, taking into account our consumption habits: we also want to receive customised newsletters, push notifications at the right time, messages containing personalised discounts… Basically, consumers want brands to anticipate their needs and be able to answer their questions as these needs unfold.

3. Distribution of the omni-channel experience

If I put a product in my basket on a website, I hope the same product will appear on my mobile application. The experience must be common to the various channels of a brand, and this omniscience begins on digital platforms and ends on the devices supporting our daily lives, which are now increasingly intelligent; watches, cars, televisions and even washing machines (75% of the data generated today already comes from edge devices).

Conclusion

We live in a fully digital age, and the way we perceive the world, how we relate, how we consume services or products has changed completely. Brands have to focus more and more on the experience they offer their consumers if they want to capture our attention in the increasingly competitive virtual universe.

Pine and Gilmore predicted that companies would have to focus their business on the experiences they offer their consumers, and that it’s that memory of these experiences that becomes their product – the companies/brands that have the ability to create and offer this angle find their competitive advantage in this model.

Ana LamelasExperience Economy: 3 trends for 2020

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