Trevor Beattie, the advertising supremo, has earned millions by devising original and controversial publicity campaigns. His agency assembled the arresting FCUK logo for French Connection and slipped the traffic-stopping slogan “Hello Boys” underneath a perky Eva Herzigova to flog Wonderbras.
But he doesn’t believe in amassing expensive emblems of success, instead lavishing his fortune on such ephemeral things as flights in a MiG jet, or flying his mum on Concorde. “That’s what money is for,” Beattie says of his escapades. “I don’t understand people who buy a Porsche: it’s the saddest thing in the history of money and motoring.”
Beattie is not alone in prizing memories above materialism. For a truly special birthday party, a Ferrari in a ribbon will no longer cut it. What the super-rich really want is their own private Rolling Stones concert (cost: £2 million) or a trip into space (£100,000, courtesy of Virgin Galactic). Even the rest of us don’t particularly want stuff any more: we’d rather enjoy a day at the races, a massage, a ride in a hot-air balloon or a weekend cookery course run by a Michelin-starred chef.
These are all symptomatic of the growing “experience economy”, which has evolved out of a culture of mass affluence. With our basic needs satisfied — the disposable income of Britons is double what it was in 1980 — we are becoming increasingly choosy about how we spend our money.
Rather than upgrading our car or television, we’ll spend the cash in coffee shops, hotels, restaurants, sports clubs and theme parks. We’ll splash out on European city breaks or walking the Inca trail. Experiences, in other words.
“The amount that people spend on retail goods as a proportion of consumer spending has gone down in the past ten years,” says Nick Gladding, senior analyst at Verdict Research, which tracks trends in the retail sector. “That money has migrated to restaurants, leisure and budget travel, as well as mobile phone calls.”
Even that most acquisitional of pursuits, shopping, has had to wake up to the experience economy, according to Melanie Howard, sociologist and co-founder of the Future Foundation, a consumer think-tank. Shopping malls such as Bluewater, she says, have acknowledged the arrival of the experience economy by restyling themselves as destinations for a family day out. You can browse, dine and take in a film; the shopping is optional. Howard says: “Companies such as Marks & Spencer recognise the trend, which is why they’ve started putting coffee shops and bookshops in their stores. The experience of shopping is just as important to us as what we end up taking home.”
The “experience economy” was first predicted in a 1998 article in the Harvard Business Review by James Gilmore, an American business consultant who advocates, among other things, sleep deprivation as an idea booster. The idea was later expanded into The Experience Economy: Work is Theatre & Every Business a Stage. Written with B. Joseph Pine, the book posits that we are in the middle of a profound economic shift. Just as we moved from a goods to a service economy, now we are shifting from a service to an experience economy.
Accordingly, to stand out in the marketplace, companies need to offer not just goods and services but experiences. Companies are no longer mere suppliers but stagers of events designed to be experienced. The newest retail stores prove the point: the flagship Toys “R” Us shop in Times Square in New York is no “pile ’em high, sell ’em cheap” emporium. Instead, visitors are immersed in the Toys “R” Us experience as soon as they encounter the 18m (60ft) Ferris wheel at the front door. Other attractions include two floors designed as a Barbie house, and an animatronic dinosaur. Shoppers are called guests.
The idea is to foster an emotional attachment between company and consumer, and hope that “guests” will want to acquire a memento that reminds them of the warm fuzzy feelings they had during the experience. The hippest companies of the moment — Starbucks, Apple and, on a smaller scale, the drinks company Innocent — are all admired within the business industry for their ability to connect emotionally with their consumers and for proving that people will pay a premium to buy into their world. An Innocent fruit smoothie, for example, costs about £2, much more than a non-branded smoothie. And magazine reviews of the Apple iPod, which always criticise its battery life and exorbitant price tag, are inevitably forgiving because of the iPod ’s iconic design and an enduring affection for the company’s perceived ability to do things differently. Visitors to Apple’s six British stores are encouraged to use an “online concierge” to help them to plan their trip, showing that progressive companies have bought in fully to the hospitality concept.
The conveyor belt of business publishing also attests to the increasing importance of the customer experience. Pine and Gilmore’s groundbreaking offering was followed by such tomes as Priceless: Turning Ordinary Products into Extraordinary Experiences (which became required reading at IBM, Estée Lauder and Pizza Hut) and Making Meaning: How Successful Businesses Deliver Meaningful Customer Experiences. They all preach the same gospel: that, contrary to what companies think, not all consumers are focused on bagging the cheapest product. The buying experience is critical (which is why we have not all switched to internet shopping or no-frills airlines).
The most notable aspect of the experience economy is how much we are prepared to pay for a purely non-material experience, such as a day in a spa or a trip to Prague. A collision of social trends, Melanie Howard suggests, is responsible. “This era is unique in the coming together of various trends such as globalism, multiculturalism and a demographic shift in terms of longevity,” she says. “There are more leisure activities around today than 20 years ago. We are aware of these other activities and cultures and we now have the money to experience them. And now that we are living longer, we have more time to try different things.”
Sometimes, the most successful exponents of the experience economy are filling a modern sociological need. For example, we spend more time than ever before in the “third space”, the term used by sociologists and marketers to describe places other than our home or place of work (or the commute between them). This is mostly because we eat out more frequently. So restaurants, bars and coffee shops, especially, have benefited.
“People always need a social place to meet and a coffee shop is the perfect alternative to a pub,” Gladding says. “It would be a lot cheaper for people to drink coffee at home, but they choose not to. They will pay to enjoy the experience of drinking coffee in a social setting.”
People also have a modern desire to try lots of new activities. Women participate, on average, in ten different leisure pursuits a year, compared to around six 20 years ago. In fact, our determination to fit in the yoga, paragliding, hiking and wine-tasting classes, on top of our jobs, might be stoking our belief that we have less free time nowadays. This promiscuity is possibly fed by the desire for self-improvement: around half of British adults believe that free time should be spent on worthy pastimes, such as visiting art galleries, rather than on frivolous activities.
Howard believes that, as a society, we are hauling ourselves up Abraham Maslow’s famous pyramid of needs, at the apex of which lies “self-actualisation”. Since we already know that a fat bank balance or a Porsche is not the key to happiness, we are searching elsewhere for fulfilment. The Future Foundation has found that “personal fulfilment” was the top priority for 50 per cent of British adults, compared with 25 per cent in 1983.
Howard says: “I think we’re in a very advanced state of this [pyramid]. There’s this emerging idea of ourselves as projects — we are no longer labelled by our education or gender, or born into a social situation that we then play out for the rest of our lives. We can do new things, pick up new skills, learn a new language. Because we’re living longer, we have more time to think about who we really want to be. We are all asking ourselves, ‘How can I get more out of my life?’”
