The term Experience Economy was coined in 2007 by Harvard University in a macro-economic study. It put forward the idea that a rise of experience is imperative to the new global consumer behavior. According to the report, the Experience Economy would evolve from 2010-20.
Today, the Experience Economy has evolved into a new modern world of the Virtual Experience Economy. The Virtual Experience Economy recognises the influence of technological integration on the experience. However, many event professionals believe that it is more than just the technologies incorporating into existing events. According to them, the Virtual Experience is an entirely new industry where ‘digital’ and’ experience’ come together.
In 2015 the International Live Events Association (ILEA) presented a new term for Experience Economy, using the example of cakes.
The idea presented:
- The first step was the agrarian economy where the fields would be ploughed, the wheat would be harvested, and then the floor would be produced for baking a cake.
- Then in the industrial economy, the process was upscaled, which lead to lower prices of cakes baked from flour produced on an industrial level.
- This was followed by the consumer economy, where the cakes were sold in supermarkets with modern designs, colors, and characters that were meant to increase the interest of the consumers.
- The experience economy represented the next evolution of this process. This idea was that the cake would be given free at children’s birthday parties in a high street restaurant. The point that ILEA presented was that the consumers were not paying for the cake now but for the experience.
Kim Myhre, who is an advocate of the rise of the Virtual Experience Economy, explained the new economy using coffee as a metaphor. This was initially used in 1990 by Joseph Pine and James Gilmore in their book ‘The Experience Economy’ to explain the progression of economic value. They described coffee beans as a low commodity product that moved on to a higher value product as ground coffee, then brewed coffee, and then finally to Starbucks, which was described as a high-value experience.
Kim adds that the evolution of the Virtual Experience Economy is the progression of economic value, where we are continually looking for ways to differentiate the experience and increase the perception of value. In the Virtual Experience Economy, we experience the coffee shop in digital and physical form while drinking coffee. It includes a multitude of added value benefits that increase the engagement and offer a more exceptional experience.
For instance, you can pre-order your coffee via an online app, so when you show up at the coffee shop, it is ready to be served. The facial recognition recognises the customers, and they can experience their coffee consumption in a different location using virtual reality environments.
The Virtual Experience Economy allows consumers to use services like Uber Eats to get freshly made coffee to them. In addition to this, providing charging stations and free Wi-Fi in the outlets allows consumers to have a home-like experience.
Trend Watching – a global trend research organisation is also a keen advocate for the progress of the Virtual Experience Economy. It predicts that many mass trends of this type appeal to the basic human needs. According to it, the needs that appeal to the Virtual Experience Economy can be divided into four categories:
- Convenience: It is a ‘need’ of the consumers to have the comfort and ease of their homes at any event. It could include on-demand services like instant access to information, availability of foods or drinks, and so on. An example of this is Amazon Prime lockers installed in Coachella.
- Self-improvement: This includes growing trends of physical, spiritual, intellectual, or emotional wellness. An Example of this is the ‘Red Room’ sensory wellness centre in New Zealand’s Pharos Festival.
- Status: According to Trend Watching, a need for status is a driving force for consumers to adopt the experience. Social media plays a significant part in providing an event with the status of a ‘must-attend’ event.
- Delight: The Virtual Experience Economy provides brilliant experience in terms of displaying striking holographic, projections, and drone displays on stage and off the stage through virtually shared experiences. This experience brings delight to the consumers as it creates an online world within events. An example of this was exhibited in the event of a video game Fortnite that features an entirely virtual, live concert attended by over 10 million people.
The Virtual Experience Economy is more than just the merger of events with technology. According to Kim Myhre, it is a new way of thinking about events strategically. It can be explained in the best way through a process of ‘needs’ that the event will deliver throughout the delegate journey. The essential question being, how do we want the delegate to feel and think when they attend the event?
Many companies like MCI Experience break down events into’ touchpoints’ and add creativity and strategic thinking throughout the process. The Virtual Experience Economy also adds a few layers of thought, including:
- On-Demand: What the guest can see and take with them after the experience. The content shouldn’t be too linear for the modern-day consumer.
- Ubiquity: Is the event experience adding or taking away the ubiquity of technology? Are the guests getting everything they could in the outside world?
- Personalisation: One of the most growing trends in the world of virtual experience is a personalised experience. The guest should feel they are getting a one-of-a-kind and exclusive experience at the event.
- Convenience: The experience should be convenient for the guest, for instance, no waiting in the queue, readily available food, and quick access to information.
- Delight or Theatre: Providing a genuinely extraordinary experience where the guests can take home a sharable moment that delights them and bring them closer to the brand hosting the event.
Kim Suggested that such experiences should be created that understand the nature of technology use outside of the event. Significant measures should be taken to enhance them and not to downgrade them. For instance, a delegate with a 4G connection and free WI-FI wouldn’t want to walk in a venue with poor connectivity.
To learn further about the global trends of the Virtual Experience Economy, click here to download the Trends Watch Report 2019.
