It is two years since Joseph Pine and James Gilmore, writing in the Harvard Business Review, coined the term “experience economy”, referring to the need of companies to go beyond merely providing goods and services to create engaging experiences which incorporate customers.
Though Pine and Gilmore’s article provoked much interest, successful manifestations of the concept have been slow to appear.
The Internet provides a space in which the brand experience can be extended, but the true extent to which the new medium can deliver emotionally has yet to be demonstrated. Indeed, it is perhaps this lack of “feel” which is holding many Internet ventures back.
In the physical world, on the other hand, some interesting initiatives are beginning to appear.
Holiday operator Club Med, for example, recently opened an installation in central Paris designed to evoke the holiday experience for existing and potential customers. Rather than replicate physical elements of the traditional resort, the new centre incorporates restaurants, spaces for relaxation and recreation, and a programme of concerts and other entertainments which convey the spirit of the Club Med offer throughout the year.
On opening the centre, head of marketing Yan Mortreux stressed that: “This is not a village, theme park or sports centre but an oasis of relaxation which will enable people to experience for a few hours the atmosphere of a Club Med holiday.”
Service brands, by their very nature, are experience brands, and therefore offer the most scope to develop an experiential element. It is a different matter to transfer the concept to product brands, yet it can be done.
NikeTown on London’s Regent Street is a notable example and another – Volkswagen’s Autostadt – opened last month in Germany. VW hopes to attract up to 1.5 million visitors a year to this mix of showroom, museum and theme park, designed to “create experiences, engage emotions, evoke memories and serve the customer”.
And what of “virtual” brands – those which can, in theory, function without a physical presence? Some have considered it beneficial to develop a tangible representation of their business.
In New York, for example, Nasdaq has given substance to what is, functionally, a virtual enterprise by opening a $35m (£23.3m) showcase studio complex on New York’s Times Square. Marketing co-ordinator Tianna Stein says: “This puts a face on the Nasdaq market. Lots of people have no idea what Nasdaq is. I didn’t know what it was before I came to work here, so this helps.”
In a world characterised by an abundance of offers, there exists a threat of commoditisation which can only grow as the Internet develops as a channel of delivery.
To combat this threat, marketers will increasingly have to consider those experiential elements which can differentiate their product or service, to create a brand world in which it can thrive.
John Shannon is president of Grey International