Well, It Was An Experience

Richard Florida, writing in his new blog on the Atlantic, predicts the following about the future of consumption:

If we look closely it's possible to discern some emergent threads of a new consumption pattern. We're already experiencing the fall of some of the biggest symbols of post-war consumption - big cars and SUVs, oversized suburban McMansions, and conspicuous consumption of various sorts. There's a shift toward smaller cars and smaller dwellings, toward walkable neighborhoods; toward more authentic, organic and energy-efficient products; and from material goods to experiences generally.

None of this has come together yet, Still, it's likely that sooner or later these emergent trends and patterns will congeal into a new, more organized consumption bundle and way of life.

To me, the interesting point made here is his emphasis on the move in consumption from material goods to experiences. This is related to the concept of Free-conomics that I blogged about in an earlier post, where I discussed how the line between experiences (going to the bookstore, going to a concert, hanging out in a Starbucks) and marketing/sales (going to a bookstore, going to a concert, hanging out in a Starbucks) is increasingly blurring.

Other thinkers are examining this shift as well. Joseph Pine has written a book about this phenomenon called Mass Customization, and more recently, a book called Authenticity. He argues that at some point, companies could no longer provide value and differentiation by making superior products, because high-quality products are now a commodity -- they are so abundant that providing them doesn't differentiate you. So how did companies differentiate themselves? They added services to their products.

A normally-driven Hyundai isn't so distinct from a normally-driven BWM on basic quality. But when you buy a BMW, you buy a whole package of services along with it that truly makes it feel like a luxury purchase. A tee-shirt from Target and a tee-shirt from Nieman Marcus may not be that different in terms of quality. But the service you get in a Neiman Marcus is one major reason why one might buy a product there.

According to Pine, even this service isn't enough now. On top of quality and service, companies need to supply an experience. Ad campaigns realized this early on. If you notice, car ads rarely focus on the car itself any longer. They talk about the car as a vehicle to have an authentic experience. As an example, he points to Disneyland as the ultimate "experience provider." (Although the experience provided is quite inauthentic.)

The basic point is that as a product gets progressively cheaper to produce and easier to replicate, companies need to go from providing products, to providing services, to providing experiences in order to differentiate themselves and "wow" the customer.

Check out this video of Pine from the TED Conference. Some of his ideas are slightly esoteric, but I think he provides an interesting way of looking at the history of the commercial world.