Emergence of the Experience Economy

1. Emergence of the Experience Economy Dr Matt Frew

2. Lecture 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’

3. 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

4. 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

5. The experience realms Pine and Gilmore (1999) identify four key experience realms Absorption Edutainment Passive Absorption Entertainment Educational Passive Participation Active Participation Esthetic Escapist Passive experiences Affecting performance Immersion

6. 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

7. Display 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

8. Display 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)

9. 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

10. Key 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)

11. Undifferentiated Differentiated Product Continuum 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

12. Lecture 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