Entering into the Experience Economy

In today’s lecture John Schweitzer emphasized the importance of innovation for contemporary businesses and organizations so that they remain competitive and can continue to increase growth, productivity and economic wealth. However it is increasingly getting difficult to innovate as society is now heavily globalized and entering into a networked world where goods and services are becoming highly commoditized and customer needs and expectations are a lot higher and constantly increasing. Businesses must now focus their attention on innovating thinking and progresses in relation to the experience they offer to its consumers in order to find a competitive edge/advantage in the now entering ‘experience economy’. As Joseph Pine II and James Gilmor explain “An experience occurs when a company uses services as the stage–and goods as props–for engaging individuals in a way that creates a memorable event.[1]

If you think about it, using the retail industry as an example, many stores now find it an equally important priority to offer good customer service and a unique shopping experience to customers as well as simply just selling goods or providing services. Peter Alexander is an example of a successful business staging an experience to create value for the customer. There are many retail stores that sell the same product line as Peter Alexander (sleepwear, lounge wear, day wear) but the designer and now Creative Director of the business, Peter Alexander, was able to take an ordinary product and create an experience for the customer by evoking the senses through the interior/spatial design of the stores, music and fragrance, package design, the uniforms of the employees[2]. All these elements are able to create a fun sort of fantasy for the customer and this is much more appealing than the average department store that offers good products and customer service but leaves no lasting memory and impact to the person.

But then this leads unto another issue where all the leading edge companies are know realizing the benefits and entering into the experience economy, how much longer will it be until an experience also becomes a commodity? A video that I recently viewed called ‘The Secret Powers of Time’ explains how future generations are becoming increasingly relatable to the digital world and less interested in the analogue. This paints a possible future scenario of businesses utilizing the advancements of digital technology e.g. creating interactive online stores where people create their own experiences by building a 3D world around them that they desire.

[1] Pine, J. & Gilmore, J. 1998, ‘Welcome to the Experience Economy’, Harvard Business Review, Vol. 76 (July-Aug), No.4, pp. 97-105

[2] Peter Alexander . 2012. Peter Alexander. [ONLINE] Available at:http://www.peteralexander.com.au/tem/PA_petersworld.tem. [Accessed 26 June 12].


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