The “experience economy” might seem like a novel term coined in deference to a habit among Millennials and Gen Z-ers to ditch homeownership in favor of taking more vacations, but in fact, the Harvard Business Review debuted the concept in 1998.
Citing the evolution of mothers baking homemade birthday cakes from scratch to parents outsourcing the organization of the entire birthday party to Chuck E. Cheese, the article made the case for the importance of life-simplifying experiences to the time-strapped consumer.
Today, even product-led companies are tinkering with ways to infuse their products with a value-added experience - think H&M outfitting its Times Square flagship store with a digitally-enabled runway where would-be customers can try on clothing, parade down the runway, strike a pose, and walk away with photos and videos of themselves.
At a recent keynote at the X4 Experience Management Summit by Qualtrics, Sukhinder Singh Cassidy, president of the eBay-owned online ticket retailer StubHub not only stressed why it's crucial for companies to “experience-ify” but proposed three frameworks for businesses to do so:
- Business model innovation
- Service innovation
- Content innovation
Here are three lifestyle brands which are getting it right, according to Sukhinder:
Stitch Fix pioneered a new way to sell clothing - business model innovation
A subscription-based personal styling service co-founded by former J. Crew buyer Erin Morrison Flynn, Stitch Fix sends customers five items of clothing and accessories individually selected by a stylist based on the customer’s style preferences, as well as any access they provide to their social media profiles. Once the shipment is received, the customer has three days to keep or return the items.
“Stitch Fix is one of a number of subscription companies that has decided that in order to sell a good, it is much better to wrap it in an experience that customers will value far more than the good itself, in this case a dress or a shirt,” Sukhinder Cassidy said. “That means taking data and creating a real-time experience for customers every time they open a Stitch Fix box.”
Similarly, StubHub’s value proposition as an online ticket marketplace gives consumers access to tickets for sold-out events they can’t get elsewhere, while ticket resellers can sell at a premium and reach StubHub’s 20 million-strong user base.
Our verdict: Curation from an expert and the “prestige” of being dressed by a personal stylist, a privilege inaccessible to most, speaks to why this type of service is so valued, even if the clothing itself isn’t highly differentiated. One-off experiential glimpses into the lives of the rich and famous are growing increasingly prized: the Moscow-based Private Jet Studio offers customers the chance to do a photoshoot inside a private jet, while BLADE, dubbed the ‘Uber of helicopters,’ provides chartered flights within Los Angeles, New York, Miami and more.
Reformation takes the waiting line out of the retail experience - service innovation
Los Angeles-based boutique apparel brand Reformation decided to intervene in a major retail experience pain point: waiting in long lines for fitting rooms. To try on a garment, you walk up to a digital wall, select the items you want, and enter your cell phone number so you can receive an SMS notification when a fitting room is available, so you can grab coffee or browse an adjacent store in the interim.
“When you return to the fitting room, your clothes are waiting for you, there is a place to plug in your music and in fact there is a camera to take selfies yourself,” explained Sukhinder Cassidy. “Simply by opening the closet door, all your garments are ready to try on and share with friends. That is the reimagination of the retail experience.”
Our verdict: The convenience value proposition Reformation offers is hard to resist, given that most retailers have not found a way to mitigate the purgatory of waiting in long lines toting heavy items while waiting for a fitting room. Sukhinder also mentioned that the reason people relish experiences is because they have the opportunity to share it on social media and garner likes - hence the appeal of the selfie camera.
Peloton infuses exercises with a social networking aspect - content innovation
While the brand has courted flak for its $2000 stationary bike, the price tag can be ascribed to the fact that the product connects you to a workout culture where you can live stream “Spin” cycle-type workout videos and compare your performance in real-time with other riders. The toughest impediment to workout success is lack of motivation, often from not having a workout partner to boost your morale on rough days.
For a subscription fee of $39 per month, riders can stream up to 14 live classes per day, and during live streaming, you can see your output and class rank in realtime, which gamifies the workout experience by turning it into a competition.
“The opportunity to give people experiences itself is a differentiator because every experience is unique,” said the former president for Google Asia Pacific and Latin America. “That is the magic of experiences.”
Our verdict: Being able to participate in a ‘Spin’ class from the comfort of your own home is undoubtedly convenient, but more than that, the workouts are customized for the bike itself and for the home workout format, hence the uniqueness of the content.
Even experience providers are looking to up the ante
Anyone who plays video games casually will have noticed that the degree of personalization has ramped up exponentially; you can now customize your in-game character’s face even down to selecting eyebrows and skin texture, build entire game worlds and design bespoke routes in racing games.
It goes to show that even companies that already sell an experience recognize the need to innovate in experience design. Movie theater chain Cinemark, for example, is offering a social live gaming experience where you and four friends can participate in a live action film.
Read: Experiential Marketing - Creative Ways Brands Build Customer Engagement
Other companies like Twitch are striving to build community around real-time experiences. Twitch, a video-game live streaming platform, has 100 million users who spend an average of 106 minutes per day viewing live gaming content.
“In fact, the live element of Twitch basically has the appeal of a major sports event crossed with a talk show,” explained Sukhinder Cassidy. Meanwhile, WeWork’s entire ethos, aside from “Do what you love” is to architect open plan offices that make it more conducive for entrepreneurs to collaborate.
“WeWork is based entirely on the concept of live interactions,” Sukhinder Cassidy said. “This open office we all seek - what more is it than just a mechanism to bring people closer together to have live conversations?”
While StubHub sells tickets to some of the hottest live events in sports, concerts, theater and live entertainment, the company is looking to create its own live experiences for its customers by giving fans the opportunity to meet with their idols. The yearly TailGate pregame party ahead of the SuperBowl hosted by StubHub staff is a hotly anticipated event.
“We give people who are fans and their families the opportunity to connect in real time with athletes, but more importantly, we take 100 of our employees and we go serve our fans live,” explained Sukhinder Cassidy. “And let me tell you, the opportunity to connect with our fans live is far more valuable way for us to understand what we need to do to take the company forward and to feel the mission of our company.”