The experience economy: The move from shifting ‘stuff’ to connecting with customers on a more emotional level. The term was first coined by Joseph Pine II and James H. Gilmore in 1998 through their book of the same name (well worth a read if you’re interested: https://amzn.to/2OakDZ6). This trend has of course been popular with industry experts and analysts for many years now – the experience economy being, essentially, the next global economy following on from the industrial and, most recently, service economies. Latest figures show we are continuing to spend less money on buying things, and more on doing things – and telling the world about it online afterwards, of course. From pubs to shops, businesses are scrambling to adapt to this shift.
Last month the coffee chain giant, Starbucks, opened a four-storey fully immersive premium coffee experience in Tokyo. What’s a fully immersive premium coffee experience I hear you cry? Well, in layman’s terms it’s a massive coffee shop, however, in reality, it’s a whole lot more. This is of course not the first of its kind. In fact. Starbucks opened up a similar, albeit slight smaller, version of this premium concept store in London 2015 (it’s here if you’re in the area and haven’t seen it yet: http://bit.ly/starbuckslondon).
Starbucks Reserve Roastery Tokyo has over 100 unique coffee and tea options, a Teavana bar and in-house bakery as well as dedicated community spaces. The customer journey is an immersive experience as well as an education in all things ‘coffee’. They take customers with them on the journey from bean to cup, delivering an experience like no other, culminating in the ‘freshest’ cup of coffee imaginable – including many exclusive and highly-premium variants (Barrel-aged cold brew for example!). An airy staircase leads to the second floor, were customers will be transported into the tradition of Japanese tea at the world’s largest Teavana Bar. On the terraced third floor, there is a cocktail bar where mixologists fuse Starbucks coffee with various spirits to create a whole new experience level – far elevated from the ‘traditional’ coffee shop.
It sounds interesting and exciting. That’s the point. At the end of the day, wash away the makeup and you are left with a cup of coffee, a pastry and an espresso martini. Everyday items you can find in every coffee shop and bar on your local high street. So, what’s different? For the customer it’s not about the product itself, they are less and less interested in the items and end game, and far more interested in the experience and then sharing it with friends (and followers) afterwards. This is the epitome of the economy experience.
Just last week it was announced that Amazon will be bringing their ‘convenience store’ format to the UK. The cashierless ‘Go’ concept brings together the latest Amazon technology to deliver a unique customer experience, which challenges the perceived norms of traditional bricks-and-mortar retailers. It’s a really interesting move by Amazon when you consider it under the umbrella of the experience economy. For, fundamentally, Amazon have built their success on shifting stuff – pure and simple. Simply translating that exact offer to a bricks and mortar store wouldn’t work though – and they know that. Ultimately if Amazon where to replicate their offer in a physical environment they’d be creating the very types of businesses that they’ve crushed on the way to their current dominant position. However, by creating a concept that puts the customer experience first, they are about to become a major threat to the established bricks-and-mortar retailers.
Utilising technology in a way that elevates the customer experience, rather than being purely gimmicky, is the masterstroke here. Frictionless technology that improves speed of service, availability and that frees up staff to deliver on customer service – means that they are striking right at the heart of the key factors that impact shopper satisfaction and loyalty.
Amazon Go store in Seattle USA
Should traditional retailers be worried? Well only if you look at both Amazon Go and Starbucks Roastery as being gimmicks should you be worried. Admittedly these are two concepts that are right on the limits of what the experience economy is all about – they’re pushing the boundaries. However, at the same time, they’re shifting the bar of customer expectations. If you still believe that retail is about selling products, then it won’t be long until you realise that your customers are out there ‘experiencing’ somebody else’s store.
The beauty is that there is so much opportunity out there for retailers to embrace the experience economy – immersive technology, local craft produce, social engagement, digital media – all these tools are at our disposal to create the feeling of a meaningful relationship between brand and buyer, online and offline. Plus, there is a customer out there who is craving these experiences and just waiting to share them on social media. Businesses already dealing in experiences are enhancing them to benefit from this shifting economy.
Are you looking to understand how your business can benefit from the experience economy? Or want to know more about this and other future consumer trends? Get in touch and we’d be delighted to support https://kam-media.co.uk/contact/
Blake Gladman, Strategy and Insight Director
