The Rise Of The Experience Economy


For many Millennials, the group born between 1980 and 2000, owning a home is a distant dream. A large number have also passed on the traditional rite of passage of the adolescent and chosen not to learn to drive cars. And while they seem to share the passion of their predecessor – Generation X – for music, in spite of the well-documented vinyl revival, sales of actual recorded products have dropped off a cliff. All of which begs the question what exactly are Millennials spending their cash on?

Well, a study of Millennials by Airbnb, conducted in September and October 2016 by GfK, among those aged 18-35 in the US, the UK, and China, highlighted two key trends. Firstly that travel has become an all-consuming passion for the YOLO (You Only Live Once) generation, which is deeply embedded in the group’s self-perception; and consequently, they will prioritise it.

More interestingly though, is that Millennials approach travel in a very different way to their parents or grandparents. Over 80% of Millennials surveyed said they are always looking for a unique experience and adventure when they travel. When they arrive, this may mean they choose to hang out in the cool neighborhoods, seek authentic cuisine, and they embrace quirky, and sometimes challenging, experiences.

The Growth Of The ‘Experience Economy’

The key word here is experience. Yet it could be argued that the experience economy is not necessarily a completely new thing. It has its roots in the festival culture, which came of age in the 1990s. This was the era when events like Glastonbury and T In The Park moved from their counterculture roots towards the mainstream, attracting a wider demographic of audiences and developing relationships with youth-focused brands.

In turn, this has lead to the integration of experiences into the festivals, a good example of which is the Coachella Festival which is held in spring in Southern California. Here, in addition to the bands, Millennials who attend are offered a whole range of experiences, from fashion shows through to parties and artisan food.

The Coachella template has been replicated in the UK too. The Secret Garden Party mixes a series of music stages with a Games Arena, a Science Area where the audience can take part in interactive experiments, as well as paint explosions and firewalking. There is also a Secret Oasis, which offers the lucky few who find it everything from spa treatments through to naked yoga.

Away from festivals, Millennials are also being offered more challenging experiences. The rise of the Triathlon has, in turn, inspired new ways that Millennials can gauge their levels of fitness and durability.

The most famous of these is the Tough Mudder. First held in Pennsylvania in 2010, it is an endurance event where competitors run 12 miles in relentlessly muddy, hilly terrain while overcoming sadistic roadblocks including the infamous electroshock therapy. Tough Mudder as a company has come a long way in that time. It is active in over a dozen countries, and it is estimated that over two million people have completed its course.

Part of its appeal is that the entrepreneurs behind the business have cleverly used social media to ensure that competitors are regularly sharing dramatic images and videos. It has courted links with legacy media too and has agreed deals with Sky Sports, ESPN and CBS among others. The franchise has been expanded too; so with the advent of The World’s Toughest Mudder, it has a flagship event targeted at professional sportsmen and women.

Slightly less challenging, though just as popular with Millennials is The Color Run; a 5k event that takes the traditional running template and adds all kinds of other experiences. Participants are given a white t-shirt at the start, which is then turned all the colours of the rainbow via various colour stations/obstacles dotted across the course. The event is designed to promote friendship and fun and is worlds away from the more serious nature of traditional running events. In its six-year existence, The Color Run has hosted events in over 200 cities.

Travel And Experience

Increasingly travel companies are sensing opportunities and are mixing traditional style journeys with experiences. An example of this is the Swedish Inland Railway train. It offers an authentic journey into the remote heart of the country which is popular because of the experiences it delivers including impromptu stops to watch wildlife and sample local cuisine. Or Carnival Cruise Line’s Fathom programme, whose onboard self-improvement seminars and on-the-ground activities include options like making water filters in the Dominican Republic. Or Groove Cruise; a four-day party that bills itself as the “world’s largest floating dance music festival”.

We are also seeing the rise of shared economy websites that focus on offering millennials new experiences that are authentic and local. This partially explains the rise of social eating companies such as VizEat, where customers choose to spend an evening and enjoy a meal with hosts in a city.

For many Millennials shared experiences and novelties as exemplified by the popularity of Secret Cinema, or the rise of escape room games, are the type of events they most crave. Indeed the quest for unique experiences is opening the door to a whole host of new business models. SPRS.ME is a company built solely on the experience concept, with a twist – being that when you book a trip, you don’t actually know where you’re going. To date, they’ve sent over 50,000 millennials to a variety of surprise destinations.

Lessons For Brands

What then should brands and entrepreneurs bear in mind when they create these types of experiences? Firstly they need to keep it ‘real and authentic.’ It is essential to find ways to provide value, whether by offering convenience or teaching new things; because inorganic experiences will just result in driving your audience away.

In terms of a marketing approach, it is important to seek out your customers and go to wherever it is they want to talk you. For many experience economy events, which are built around very visual experiences, this could be on Instagram or Snapchat, as much as Facebook.

Finally, brands and entrepreneurs need to assess how they can invite the Millennials to make an impact, to bring them into the product creation process. Much of this is about creating opportunities in which Millennials can create and then share content, which then helps to extend the reach of the event.

 

The experience economy is already maturing, and Millennial-focused brands really need to be thinking seriously about how they can leverage these events as part of their marketing strategies.