Emergence of the Experience Economy

Emergence of the Experience Economy

Dr Matt FrewDr Matt Frew

Lecture FormatLecture Format Historical context: from production to

consumption Features of the ‘experience economy’ Experience and ‘attention’ Display and differentation through

experience Layers of experience Experience and ‘events’

Historical context: from production to consumption

Features of the ‘experience economy’ Experience and ‘attention’ Display and differentation through

experience Layers of experience Experience and ‘events’

Historical context: from production to consumption

Historical context: from production to consumption

Need to provide ‘big picture’ context for emergence of ‘experience economy’

Post-war, the primary producers, were transformed into the key consumers by an affluent capitalist society: Full employment, wage increases, more leisure time, cultural

intermediaries encouraging consumer desires Consumption – dominant cultural code and social conditions

In the 1950s, the ‘ideological position’ (Procter, 2004: 18) of consumer is embedded in consciousness of an increasingly affluent nation – constituting the consumer as an atomised individual with endless choice and freedom

Ever since, much academic attention has been paid to the consumer as a key facet of late capitalism Shift from occupational (class-based) forms of identification to

lifestyle associations A defining characteristic of the consumption experience is its

reliance upon the production, circulation and consumption of meaning (often symbolic) for its successful operation – events are no different, they reflect and help create particular lifestyle aspirations Events can provide iconic symbols which can be used to construct a

suitable identity

Need to provide ‘big picture’ context for emergence of ‘experience economy’

Post-war, the primary producers, were transformed into the key consumers by an affluent capitalist society: Full employment, wage increases, more leisure time, cultural

intermediaries encouraging consumer desires Consumption – dominant cultural code and social conditions

In the 1950s, the ‘ideological position’ (Procter, 2004: 18) of consumer is embedded in consciousness of an increasingly affluent nation – constituting the consumer as an atomised individual with endless choice and freedom

Ever since, much academic attention has been paid to the consumer as a key facet of late capitalism Shift from occupational (class-based) forms of identification to

lifestyle associations A defining characteristic of the consumption experience is its

reliance upon the production, circulation and consumption of meaning (often symbolic) for its successful operation – events are no different, they reflect and help create particular lifestyle aspirations Events can provide iconic symbols which can be used to construct a

suitable identity

Features of the ‘experience economy’

Features of the ‘experience economy’ Pine and Gilmore (1998, 1999) argue that experiences are

the 4th economic offering – after commodity (raw material), good and service

Developed western economies have moved from ‘extracting’ to ‘making’ to ‘delivering’ to ‘staging’

Growing affluence fuelled the emergence of a service economy as consumers switched their spending from the purchase of goods to services which became valued as a sign of wealth and social status (e.g. eating out, car services, financial services)

Beyond services (post-service), experiences are ‘staged’ to be memorable, personal, revealed over time and dealing with a range of sensations – they are ‘experiential’:Companies stage an experience whenever they engage

customers, connecting with them in a personal, memorable way (Pine & Gilmore, 1999: p3)

‘Events’, whether special, hallmark, mega, or local, are also, invariably, staged and designed to engage an audience’s attention, the provide a marker of status and identity

Pine and Gilmore (1998, 1999) argue that experiences are the 4th economic offering – after commodity (raw material), good and service

Developed western economies have moved from ‘extracting’ to ‘making’ to ‘delivering’ to ‘staging’

Growing affluence fuelled the emergence of a service economy as consumers switched their spending from the purchase of goods to services which became valued as a sign of wealth and social status (e.g. eating out, car services, financial services)

Beyond services (post-service), experiences are ‘staged’ to be memorable, personal, revealed over time and dealing with a range of sensations – they are ‘experiential’:Companies stage an experience whenever they engage

customers, connecting with them in a personal, memorable way (Pine & Gilmore, 1999: p3)

‘Events’, whether special, hallmark, mega, or local, are also, invariably, staged and designed to engage an audience’s attention, the provide a marker of status and identity

Passive Participation

Absorption

Immersion

ActiveParticipation

Entertainment

Educational

Esthetic Escapist

PassiveAbsorption

Edutainment

Passive experiences Affecting

performance

The experience realmsPine and Gilmore (1999) identify four key experience realms

Experience and ‘attention’Experience and ‘attention’ As the speed of life accelerates, and mass affluence

satisfies the consumer’s desire for material possession, so the importance of ‘meaningful’ experiences rises

But, consumers are subject to panoply of ‘attention-seeking’ advertisements and their span of attention is limited

Experiences resemble services, albeit with an additional ‘theatrical’ or ‘spectacular’ component – they grab attention in a crowded leisure economy

In an increasingly homogenous (and disenchanted?) leisure marketplace, consumers are willing to pay for the engagement and theatre being offered

The most effective experiences are designed to place the consumer (the ‘experientialist’) as a key performer, engaging his/her senses (esp emotions) to create enchanting experiences which benefit producer and consumer alike

As the speed of life accelerates, and mass affluence satisfies the consumer’s desire for material possession, so the importance of ‘meaningful’ experiences rises

But, consumers are subject to panoply of ‘attention-seeking’ advertisements and their span of attention is limited

Experiences resemble services, albeit with an additional ‘theatrical’ or ‘spectacular’ component – they grab attention in a crowded leisure economy

In an increasingly homogenous (and disenchanted?) leisure marketplace, consumers are willing to pay for the engagement and theatre being offered

The most effective experiences are designed to place the consumer (the ‘experientialist’) as a key performer, engaging his/her senses (esp emotions) to create enchanting experiences which benefit producer and consumer alike

Display and DifferentationDisplay and Differentation The very act of display is becoming ever more central to

attempts to create differentation and distinction from others through consumption

The routinisation of material possessions (what we own) and of standardised (or productised) service offerings (think McDonalds, Wetherspoons etc) means that in order to create distinction consumers need to do more

This is where the accumulation of more memorable experiences comes in

Commercial (and many not-for-profit) events also exploit the desire for experience by providing ample opportunities to purchase experience-verifying mementos: Souvenir merchandise (DVDs, videos, programmes, T-

shirts) These strategies act to reinforce the sense of worth for the

experientialist as well as maximising profit for the experience-stager

The very act of display is becoming ever more central to attempts to create differentation and distinction from others through consumption

The routinisation of material possessions (what we own) and of standardised (or productised) service offerings (think McDonalds, Wetherspoons etc) means that in order to create distinction consumers need to do more

This is where the accumulation of more memorable experiences comes in

Commercial (and many not-for-profit) events also exploit the desire for experience by providing ample opportunities to purchase experience-verifying mementos: Souvenir merchandise (DVDs, videos, programmes, T-

shirts) These strategies act to reinforce the sense of worth for the

experientialist as well as maximising profit for the experience-stager

Display and DifferentationDisplay and Differentation

However, just as we become accustomed to purchasing services as a matter of routine, so there exists a danger that ‘experiences’ also become ‘matter of fact’ or routinised - the McExperiences

In this case, merely partaking is no longer satisfactory (i.e. it’s not memorable, or fulfilling enough) so consumption choices move to a concern with what you did, how you did it, how adventurous it was and how you capture and control your experience – creating opportunities to relive and accentuate your differentiated consumption identities

The events industries provide experiences that facilitate such differentation as they touch us on a number of levels (some more niche markets than others)

However, just as we become accustomed to purchasing services as a matter of routine, so there exists a danger that ‘experiences’ also become ‘matter of fact’ or routinised - the McExperiences

In this case, merely partaking is no longer satisfactory (i.e. it’s not memorable, or fulfilling enough) so consumption choices move to a concern with what you did, how you did it, how adventurous it was and how you capture and control your experience – creating opportunities to relive and accentuate your differentiated consumption identities

The events industries provide experiences that facilitate such differentation as they touch us on a number of levels (some more niche markets than others)

Layers of experience Layers of experience As we save on goods and services, so PDI can be

switched to the accumulation of more extravagant, memorable and enchanting experiences which possess different layers: Emotional (excitement, fear, guilt) Physical (active, fitness) Intellectual (cultural events) Spiritual (enchantment, sublime)

The diversity of international events on offer provides the consumer with endless opportunities to satisfy the desires generated by the cultural industries

A key facet of the experience economy is the extraction of maximum spend from the ‘experiential’ (or immersed) consumer

As we save on goods and services, so PDI can be switched to the accumulation of more extravagant, memorable and enchanting experiences which possess different layers: Emotional (excitement, fear, guilt) Physical (active, fitness) Intellectual (cultural events) Spiritual (enchantment, sublime)

The diversity of international events on offer provides the consumer with endless opportunities to satisfy the desires generated by the cultural industries

A key facet of the experience economy is the extraction of maximum spend from the ‘experiential’ (or immersed) consumer

Key readingsKey readings

Pine, B.J & Gilmore, J.H. (1999) The Experience Economy: Work is Theatre and Every Business a Stage, Harvard, Harvard Business School Press (Chapter 1)

Norton, D.W (2003) ‘Towards Meaningful Brand Experiences, Design Management Journal, 14 (1): 19-25

Negus, K & Pickering, M (2004) Creativity, Communication and Cultural Value, London, Sage (Chapter 2)

Pine, B.J & Gilmore, J.H. (1999) The Experience Economy: Work is Theatre and Every Business a Stage, Harvard, Harvard Business School Press (Chapter 1)

Norton, D.W (2003) ‘Towards Meaningful Brand Experiences, Design Management Journal, 14 (1): 19-25

Negus, K & Pickering, M (2004) Creativity, Communication and Cultural Value, London, Sage (Chapter 2)

The Shift: from Experiences to

Transformations?

The Shift: from Experiences to

Transformations? Now a Post-industrial economy Mass service economy, process of adding

value Organizations manipulate events in order to

produce ‘memory moments’ (tokens) In experience - memory is the ‘product’ Shift in continuum - from commodities, goods,

services, experiences and now to transformations (economy)

Things (commodities or services) merely support or facilitate the experience economy/emotional economy

Now a Post-industrial economy Mass service economy, process of adding

value Organizations manipulate events in order to

produce ‘memory moments’ (tokens) In experience - memory is the ‘product’ Shift in continuum - from commodities, goods,

services, experiences and now to transformations (economy)

Things (commodities or services) merely support or facilitate the experience economy/emotional economy

Undifferentiated Differentiated

Product Continuum

Lecture referencesLecture references

Procter, J (2004) Stuart Hall, London, Routledge

Bourdieu, P (1984) Distinction: A social critique of the judgement of taste. London, Routledge and Kegan Paul

Pine, B.J & Gilmore, J.H. (1998) Welcome to the experience economy. Harvard Business Review, 74 (4), 97-105

Pine, B.J & Gilmore, J.H. (1999) The Experience Economy: Work is Theatre and Every Business a Stage, Harvard, Harvard Business School Press

Procter, J (2004) Stuart Hall, London, Routledge

Bourdieu, P (1984) Distinction: A social critique of the judgement of taste. London, Routledge and Kegan Paul

Pine, B.J & Gilmore, J.H. (1998) Welcome to the experience economy. Harvard Business Review, 74 (4), 97-105

Pine, B.J & Gilmore, J.H. (1999) The Experience Economy: Work is Theatre and Every Business a Stage, Harvard, Harvard Business School Press