Ready for the Experience Economy?

After everything we’ve been through in the last two years, people are ready to get out and do stuff. This need is reshaping how millions of consumers interact with brands and determine what to buy. 

Most companies strive to create positive customer experiences. But a new crop of innovators are radically rethinking what it means to experience their brands. Build-A-Bear, for example, launched its Bear Builder 3D Workshop by partnering with tech firms Nutanix, Buzz3D and TierPoint to develop an interactive online shopping experience where consumers can see their furry friends come to life. 

Is this the future of commerce? We’re all learning from experience.

Let’s Break It Down: 

• Customer Journey: the entire experience a customer has interacting with a brand, with a focus on how the customer feels after interactions with the brand. This idea has been around forever, but now every part of the customer experience is becoming gamified.

• Customer Lifetime Value: The total worth to a business of a customer over the whole period of their relationship, with the understanding that increasing the value of existing customers can be a stronger way to drive growth than acquiring new ones.

• Experience Economy: The idea that businesses must create memorable events for their customers, with the experience itself becoming the core product. This theory was first proposed in the late 90s, but only now is it reaching its full potential.
  
  

WHAT’S UP ⬆️:
Consumers have always been willing to pay more for better experiences. What’s new is that brands are now centering customer experience as their core differentiator — sending shockwaves through their industries.

• Camp, a family retailer that blends merchandise with hands-on experiences, transformed its flagship storefront in Chelsea into a space-themed, augmented-reality play space called “Cosmic Camp.” The ticketed experience uses gamification to transport customers — adults and kids alike — into another world, through games, skill-based challenges, and live performances.

• StockX, a global platform to buy and sell streetwear, launched its first pop-up shop in Tribeca. The goal of the shop, which provides the in-store service and face-to-face guidance of a luxury retailer, is to create an experience in the resale world that feels like a high-end retail purchase. 

• Whole Foods has long prioritized customer experience, creating brand loyalty through commitments to sustainability, free samples, strong front-end staff, and an aesthetic built around shopping with ease. Since its acquisition by Amazon, Whole Foods has taken this even further: locations have been updated with Amazon lockers, Prime discounts, increased product offerings, and self-checkout options. They’ve even piloted Whole Foods bodegas and mini-marts to meet more people where they are.

WHAT’S DOWN ⬇️:
Gone are the days when businesses could operate from behind the curtains. Consumers now want to interact at a personal level, each step of the way.

WHAT’S NEXT ➡️:

D Disruption	For consumers, the pandemic has been a crash course in mastering digital interfaces. For the countless companies complacent with poor User Experience (UX) / User Interface (UI), this shift to out-of-the-box customer experiences is a much-needed shock to the system.
I Innovation	Each of the companies we’ve highlighted — and many others — are innovating through customer experience. Lox Club, described tongue-in-cheek by its founder as a “membership-based dating app for Jews with ridiculously high standards,” has seen explosive growth since its launch in the fall of 2020 primarily by focusing on a playful, gamified design.
P Polarization	For some of these efforts, we can’t help but ask… is this really necessary? Do we really need Gucci-themed performance art pieces or museum exhibits? For some, such experiences could be thrilling; for others, they can seem dystopian.
S Stickiness	Consumers have more options — and therefore can be more selective — than ever before. That means to thrive, companies need to shift their business models to focus on responding to a customer’s needs, rather than shoehorning them into scripted touchpoints.
S Social Impact	People don’t just buy products or services anymore — they buy experiences. This is leading a profound shift in what retail looks like, as businesses strive to inject personality, culture, and relationship-building into what they offer. After all, the reason that Disney Parks are among the most successful retail malls in the world is that no one thinks of them as retail malls.