Q. What do Starbucks, American
Girl Place, Harley-Davidson, Apple, Steelcase and Krispy
Kreme all have in common?
A: They are all expert experiential marketers!
A number of business writers and management authorities have written about a change in the economic landscape that has come about in the past ten years. Variously described as the "Entertainment Economy," the "Attention Economy" and the "Experience Economy," this paradigm states that the highest offering for consumers is one that is laden with and surrounded by meaningful and compelling experience. The term was introduced in an article and book by Joseph Pine and James Gilmore.
This view states an evolution from the Service Economy into a newer and more emotion-centered marketplace where consumers become the products, themselves, because a good deal of the experiential offering is taking place inside the customer and will be retained there long after product or service has been consumed.
A recent article in Strategy+Business, entitled "The Barista Principle--Starbucks and the Rise of Relational Capital," makes this statement, "More rapid commoditization of goods and services means the differentiation of a brand through customer experiences becomes ever more important." The article analyzes Starbucks astounding growth and success and attributes their success to a mastery of delivering great experiences for consumers.
Q: What do these companies have in common? |
 A: They are all expert experiential marketers! |
|---|
Cost of coffee bean when harvested = $0.50/lb.
Value realized by Starbucks from selling cup of coffee = $230/lb.
AN INCREASE OF VALUE OF +46,000%.
image from Business Week, 9/02/02.
"Great retail is great theater" is now the phrase being repeated in the halls of The Retail Advertisers and Marketing Association (part of the National Retail Federation), which represents the marketing interests of most of America's large retail chains. Any review of the news from the visual design trade press comes back with multiple examples of retail store design trending to entertainment environments, such as the Toys 'R Us flagship store in Times Square and the REI sporting goods stores.
But there are also a number of business-to-business cases
where the Experience Economy is driving innovative solutions.
Motorola, Northrop
Grumman and the U.S.
Armed Forces use complex interactive, game-like simulations
for training and planning.
Workplace design has become increasingly experiential
and playful in order to maximize worker creativity and convey
an exciting and dynamic image of the company.
Product design is becoming a very important factor in driving
demand -- and not just for consumer items. Manufacturers are
creating experiential centers where dealers and customers
can immerse themselves in an entertaining environment while
learning about product lines. Johnson Controls Showcase (Milwaukee),
Nortel Network's Executive Briefing Center (Research Park,
NC) and the Case Tomahawk Experience Center (northern Wisconsin)
where potential customers can try out earth-moving gear, are
a few examples.
Clearly, the Experience Economy is a topic worthy of serious exploration by managers and marketers, alike.
