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Experience Economy



Kirjoittanut: Jignaben Patel - tiimistä Kaaos.

Esseen tyyppi: Akateeminen essee / 3 esseepistettä.

KIRJALÄHTEET
KIRJA KIRJAILIJA
The Experience Economy: Competing for Customer Time, Attention, and Money
B. Joseph Pine and James H. Gilmore
Esseen arvioitu lukuaika on 6 minuuttia.

Experience Economy

Jignaben Patel and Oshadi M

Introduction

Businesses and Companies often become indistinguishable from the rest of the crowd. Even
after providing the best quality of services and goods, most of the consumer sector only cares
about the prices of the products and services. Every company aims to be distinguishable in a
positive way and attract more customers because of their uniqueness, but the raw materials
and the level of quality can be achieved by any other rival company just by using more
financial resources. When companies come across these problems, they often try to focus on
giving a unique experience to their customers. Experiences are something that can never be
bought or made the same. Changing and focusing on the experiences of the customers forces
the customers to revisit your store or buy your product yet again because of the feeling they
get when interacting with you. This is the experience economy where the economy focuses
on the experience that people get rather than products and services. Similar to experience
economies, transformation economies work to adapt their experiences as per the customer’s
need. In other words, it aims to change its experience to fit every consumer’s demand. An
example of this is the Disney Land. Experience Economies are not megatrends in the 21st
century yet, but there are future expectations for fostering.

Realms of Experiences

There are four reals of experience economies which are based on the reasons behind people’s
need for an experience you provide. These realms are also known as the 4es, which stand for
Entertainment, Educational, Escapist and Esthetics. The 4es were termed by Pine and
Gilmore (1999). All these realms are quite different and yet equally popular.

I. Entertainment

This is the most common reason why most of the customers use experience economies.
Amusement parks and skydiving activities are very prominent among people who want to
have fun and try something new. Imagine amusement parks, theatrical productions, or athletic
occasions. The goal is to create memorable experiences that enthral and amuse the audience,
frequently through games, shows, or narratives.

II. Educational

Educational experiences are commonly seen among students and families with kids. Science
parks, labs, and museums are solely based on educational purposes with involving
entertainment by different activities for the people to try out. Museums, workshops, and
guided tours are a few examples which are based on the Educational Experience. By
providing educational opportunities, companies help their clients grow intellectually and
personally in addition to providing entertainment.

III. Escapist

People often want a break from their daily routine. Sometimes people want to get rid of their
stress or let out their anger. Anger rooms, which are quite popular nowadays, are an example
which gives the customers an experience that helps them escape from their reality for a short
period. VR role-playing games, virtual reality simulations, and immersive theatre productions
are a few examples. Customers can indulge in fantasy and creativity and totally immerse
themselves in a new universe through escapism experiences.

IV. Esthetic

This is the most popular realm of the experience economy. Influencers and vloggers look for
places which are aesthetically pleasing for which they can take pictures and videos with a
different type of vibe. Disney Land is such a business that gives the Disney aesthetic with the
characters and castles. Luxurious spas, boutique hotels, and upmarket dining establishments
frequently succeed in providing aesthetic experiences by designing spaces that are
aesthetically pleasing, cosy, and immersive.

Role of technology in shaping experience economy

It is not wrong to claim technology as a catalyst for innovations in the experience economy.
Technology has been shaping our lives ever since, new inventions make it easier for us to
work and interact with the other party. Similarly, in an experience economy, and technology
has played a very important role in making the experience economy what it is right now.
Many experience economies are based on providing technological experiences, for example,
Social Media, Artificial Intelligence, and Virtual reality. These experiences are available to
the public because of the modern technology. Sometimes, technology makes it easier for
other experience economies to operate. For example, Disney Land’s MagicBands make the
customers’ experience easier by enhancing the functionality of doors just by scanning the
MagicBands.

Impacts of Experience Economy

I. Economic

The experience economy tends to create employment opportunities in tourism, hospitality,
entertainment, and events management sectors. If a small business offers a unique and
personalized experience to the customers, it can be very beneficial for them and give them a
competitive advantage. Establishing a big experience economy can attract more people from
abroad which will bring foreign income to the country. Businesses that provide value-added
services and experiences can stand out from the competition and charge more. As an
example, luxury hotels offer individualised care, first-rate facilities, and distinctive
experiences to support their high rates and boost patron pleasure.

 

II. Socio-cultural

The experience economy can always engage the public with local festivities, cultural events,
and events. Engagement of communities in these kinds of activities which are related to a
specific culture, preserves the cultural traditions, arts, and customs. Customers can also
access diverse experiences which promote social inclusion and diversity by providing
opportunities for people from different backgrounds to take part and engage themselves in the
events. In communities, shared experiences can promote a sense of belonging and strengthen
social ties. Sports events, for instance, unite supporters from many backgrounds and
backgrounds to cheer on their teams and enjoy the thrill and companionship of the occasion.

 

III. Environmental

Experience economies may cause some harm to the environment since the experiences
provided require natural resources such as water, energy, and raw materials. Furthermore, the
people who visit the place contribute to waste such as food waste, plastics, and other harmful
non-recyclable objects. Not only waste, but tourism also causes carbon emissions because of

transportation. Ecotourism programmes, such as nature-based tours and wildlife safaris,
encourage responsible tourism and assist regional conservation efforts, which helps to
safeguard fragile ecosystems.

 

Challenges with the Experience Economy

Even though the experience economy sounds very optimistic in terms of business
opportunities, it comes with several challenges. The main goal of an experience economy
company is to personalize the experience for each customer according to their needs.
However, this is a really difficult task because it takes time to know the person’s requirements
and what exactly they want. Every customer is unique and they have a variety of needs from
which it is really hard to understand if your company can fulfill their needs or not. The
second important challenge is consistency. It can be difficult to maintain consistent
experiences across many touchpoints and locations, especially for companies that operate
numerous stores or online platforms. Customer loyalty and overall brand reputation can be
damaged by any irregularity. The integration of technology smoothly into the consumer
experience can be a challenge, particularly for traditional firms. The implementation of new
technologies such as mobile apps, augmented reality, and virtual reality requires significant
effort and investment.

 

Case studies and examples

 

1. Disneyland Resorts:

The epitome of the experience economy, Disneyland Resorts provides visitors with
captivating and magical encounters. Visitors are cast right into the heart of a wonderful and
wondrous world with the help of well-created themed attractions, characters, and
entertainment. Every aspect of the park, from the rides to the culinary options, is designed to
bring guests of all ages unique experiences. Disneyland maintains its reputation as one of the
best places to take kids because it consistently innovates and pays close attention to detail.
The park’s ability to evoke emotions and create lasting experiences, in addition to its
attractions, is what makes visitors return year after year.

 

2. Starbucks

Starbucks has elevated coffee from a simple commodity to a premium offering by
transforming the beverage into a holistic experience. Beyond just selling coffee, Starbucks
develops warm spaces with comfy seating, calming music, and welcoming decor so that
patrons may unwind, mingle, or work. The company offers personalised recommendations,
loyalty awards, and the ease of mobile ordering through its smartphone app, demonstrating
that its attention to the consumer experience extends beyond the actual store. Starbucks uses
its strong brand recognition and dedication to quality to build a devoted clientele that is
prepared to spend more for the complete experience as opposed to simply the product.
Starbucks has cultivated a reputation for providing outstanding service and atmosphere,
making it the face of the contemporary coffeehouse.

 

3. Airbnb

By providing guests with distinctive and customised lodging options that surpass
conventional hotels, Airbnb transformed the hospitality sector. By renting out their houses,
apartments, or even unusual locations like treehouses or yurts, people can provide visitors
with rich and genuine experiences through its platform. Airbnb has tapped into the growing

demand for experiencing travel by putting hosts in touch with travellers looking for more
individualised and culturally stimulating stays. The secret to the business’s success is its
capacity to create relationships between hosts and visitors, giving visitors the opportunity to
live like locals and take in their surroundings more deeply. Airbnb promotes trust and
openness by means of user evaluations, photographs, and comprehensive listings, thereby
augmenting the whole experience for both hosts and guests.

Conclusion

In summary, the experience economy represents a radical change in the way companies
interact with their clientele, emphasizing creating memorable and one-of-a-kind experiences
rather than sticking to conventional product-centric strategies. This progression signifies a
more profound comprehension of customer preferences, acknowledging that encounters
possess inherent worth and are difficult to duplicate. But as companies struggle with the
intricacies of personalisation, consistency, and technology integration, this shift is not without
its difficulties. Despite these obstacles, the experience economy has the potential to be
revolutionary. Prominent case studies like Disneyland Resorts, Starbucks, and Airbnb show
how companies can stand out from the competition and develop stronger relationships with
clients by providing immersive and interesting experiences.

 

Works Cited

Dooley, Jacqueline. “The Importance of Innovating for the Experience Economy.”
ClickZ, 19 November 2020,
www.clickz.com/the-importance-of-innovating-for-the-experience-economy/264158/.
Accessed 24 April 2024
Localist. “What Is the Experience Economy.” Localist, 1 March 2021,
https://www.localist.com/post/what-is-the-experience-economy. Accessed 25 April 2024
Pine, Joseph. “What Consumers Want.” TED, 16 January 2009,
https://www.youtube.com/watch?v=2RD0OZCyJCk. Accessed 25 April 2024
Pine, B. Joseph, and James H. Gilmore. ‘‘The Experience Economy: Work Is Theater
& Every Business a Stage’’, Harvard Business Review Press, 1999. Accessed 24 April 2024
Pine, B. Joseph, and James H. Gilmore. “Welcome to the Experience Economy.”
Harvard Business Review, Harvard Business Publishing, 1998,
hbr.org/1998/07/welcome-to-the-experience-economy. Accessed 25 April 2024

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