“More and more luxury shoppers tell us they love experiences that make them feel pampered.” Jean-Marc Bellaiche, Senior Partner at The Boston Consulting Group (BCG.com, June 12, 2012)

“All over the world, luxury shoppers tell us they’d rather spend more on experiences than on clothes and jewelry. They’ve gone from ‘all my friends and I wear Cartier’ to ‘I cherish spa days with my friends.’ Although experiences are more intangible than an item, consumers consider them more memorable.” Michelle Eirinberg Kluz, Principal at The Boston Consulting Group (BCG.com, June 12, 2012)


Description

After decades of materialism and excess, consumers are reassessing how they spend their money and time. Instead of going for objects that signify social status, they’re opting for meaningful experiences that offer unique and memorable moments that can be savored on the present time. Basically, consumers’ values are changing: they are increasingly favoring experiences over possessions, as the former bring them more enjoyment and pleasure in their lives. It’s about showing who they are over what they wear or own and, more, get rewarded for the caliber and quality of what they do versus what and how much they own. They want to live unique and memorable moments rather than accumulate objects that they often enjoy only in the short-term. They increasingly adopt the “having to being” mindset. Rather than buying things for buying’s sake, there is a need for more. Better-educated and smarter, consumers no longer need the authority of brands in quite the same way, ushering in a more subtle sophistication to consumption. According to a study conducted in April 2014 by Cornell University, simply anticipating a joyful experience brings more happiness than waiting to buy material things. What’s more, the study says that experiences are more rewarding than things because they are inherently less comparative, so they bring happiness regardless of what others do.

According to a study conducted in April 2014 by Cornell University, simply anticipating a joyful experience brings more happiness than waiting to buy material things.

Facing an unrelenting need for self-actualization, people are seeking to leverage experiences as a way to demonstrate identity sans stuff in a material world. While material goods are subject to material degradation and devaluation, experiences are transformed into memories, and even bad ones can be appreciated later on down the line.

Experiential luxury

The luxury sector is the most fertile ground for the ‘experience’ trend expression. Affluent shoppers favor experiencing a luxury over owning one, according to a Boston Consulting Group report on global luxury markets. Luxury as a lifestyle seems to be more important than luxury goods on their own – wealthy people prefer having dinner in a five-star restaurant or a trip to a luxury resort rather than a Chanel leather handbag. Also, now that middle classes have access to luxury, they are drawn to long-lasting goods made by reputable brands. Over time, they tend to move from accumulating material goods to buying experiences. Consumers indicate that they get a greater sense of purpose and satisfaction from experiences than they do from the purchases of luxury things.

After a survey of approximately 1,000 affluent people in eight developed markets and the BRIC countries, the report concluded that total annual spending on luxuries now tops $1.4 trillion. This includes more than $770 billion on luxury experiences, nearly $350 billion on luxury cars and the rest on personal luxury goods such as watches, handbags and shoes.

Experiential luxury now makes up almost 55% of total luxury spending worldwide and, year on year, has grown 50% faster than sales of luxury goods, according to the report. This group of consumers want to grant more importance to meaning than status in their purchases and increasingly adopt an understated consumption instead of a conspicuous one. After a survey of approximately 1,000 affluent people in eight developed markets and the BRIC countries, the report concluded that total annual spending on luxuries now tops $1.4 trillion. This includes more than $770 billion on luxury experiences, nearly $350 billion on luxury cars and the rest on personal luxury goods such as watches, handbags and shoes. In China, experiential luxury sales are outpacing goods with 28% growth each year.

Brand, shopping & user experience

Whether the brand, customer, shopping or user experience, marketers are putting all efforts to deliver the so-called “wow effect”, synonymous of enhanced experience. They ultimately all relate to how it feels to use a product, capturing the sensations, feelings, thoughts, and behavioral responses to stimuli. Indeed, the experience extends the consumption occasion, deepening the enjoyment, as there is a romanticism associated with experiences, including the people and places surrounding them.

Experiential marketing paves the way for brands to embed entertaining play mechanics into product offerings and marketing communications.

An immersive brand or shopping experience provides respite from the pressures consumers face, with luxury purveyors – Burberry, Victoria Secret, Gucci are the best practitioners in their category – providing engaging experiences, notably by using the latest tech innovations. Experiential marketing paves the way for brands to embed entertaining play mechanics into product offerings and marketing communications. Rick Wise, CEO of Lippincott, says experience innovation is the next design imperative. User experience design is getting more sophisticated to answer consumers’ wish to engage in a meaningful interaction when purchasing a product or service. Mobile adoption is fueling the drive toward smoother, more intuitive design. Applying experience design principles to mobile would require fewer, simpler steps to accomplish a task, thus providing a more streamlined and targeted experiences.

Featured examples

The Peninsula Academy

Credit: Peninsula.com

Credit: Peninsula.com

Travel is a chance to educate oneself about global destinations and immerse in local culture. The Peninsula Academy curates insider experiences for guests at Peninsula luxury hotels in eight iconic destinations worldwide. Visitors to Bangkok can hop an elephant to visit wine country, where they’re invited to design their own wine label, or study kickboxing in private sessions with a Muay Thai master. Beijing guests can soar above the Great Wall of China on a helicopter tour, while the Beverly Hills Peninsula sends travelers to a private Malibu estate for surfing lessons with a celeb trainer. And New York guests get the VIP treatment behind the scenes at hit Broadway shows. The family-friendly Academy also introduces kids to the world around them with programs like a Shanghai kite-making class and origami paper folding in Tokyo.
Global, June 2014

IKEA Tempe location

Credit: Ikea.com

Credit: Ikea.com

IKEA and Airbnb have partnered up to offer IKEA lovers the chance to spend the night in the IKEA Tempe location, situated in Sydney, on Aug. 31. For approximately $10 per room, three groups of four guests were able to spend the night in one of the store’s three styled rooms. Each room was designed to offer its own ambiance: “modern elegance, “inner city living” or “rustic charm.” Entries closed on Monday evening and winners were announced soon before the following Sunday’s slumber party. And yes — the store’s popular meatballs were also served. The brand, by collaborating with Airbnb, aimed to create something special to inspire Aussies to make the most of the spaces they have in their homes.
Australia Australia, August 2014

House of Vans

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Spread across five tunnels winding their way beneath London’s Waterloo tube station, ‘House of Vans London‘ is the physical manifestation of the culture and creativity that have defined the Vans brand since 1966. The space is a true celebration of art, music, skateboarding, BMX, street culture and fashion. Visitors have a chance to experience the British capital’s only indoor skatepark, comprised of a pool-style concrete bowl, street section and mini-ramp. Helping integrate the project within the community, the initiative is affiliated with three local charities.
United-Kingdom United Kingdom, August 2014

Selfridges & Everyman

Credit: everymancinema.com

Credit: everymancinema.com

London’s department store Selfridges, in collaboration with independent cinema chain Everyman, has installed a temporary cinema in its flagship store on Oxford Street that will be in situ until spring 2015. The theatre will be the first to be operated within a department store, screening a series of classic and contemporary films. This initiative showcases the work of 12 influential designers such as Paul Smith, Marc Jacobs and Oscar de la Renta who were chosen for their ‘idiosyncratic impact on fashion over the past 50 years’. On the first day, the theatre screened the Audrey Hepburn classic Breakfast At Tiffany’s, as well as Breathless, The Grand Budapest Hotel and The Wolf Of Wall Street. In doing so, the department store seized the opportunity to transform into a great retail theater to make shopping a fun form of escapism, and offer customers access to the escapist power of cinema.
United-Kingdom United Kingdom, September 2014

Floating 5-star hotel

Credit: dutchdocklands.com

Credit: dutchdocklands.com

Travellers who dream of seeing the Northern Lights will have the opportunity to do from a glass-roofed, snowflake-shaped floating hotel come 2017. Developed by Dutch Docklands, a company that specialises in the construction of floating structures, the 5-star Krystall hotel will be a luxury property stationed between fjords near Tromso in northern Norway. The design for this hotel in Norway is based on the shape of an ice crystal resembling, perhaps, a particularly beautiful iceberg, floating among the fjords. The hotel will have 86 rooms, conference rooms, spa and wellness facilities, and was designed to be completely self supporting and self-sustainable.
Norway Norway, August 2014

Audi City

Credit: Audi-city.com

Credit: Audi-city.com

After London and Beijing, German automaker Audi has launched the “Audi City” digital experience in Berlin, which is one of the most advanced in store experiences existing so far. New features include 3D virtual viewing of customized car models using real-time render technology – making the Audi City vehicle configurator the most advanced in the world. The customized models are then projected on the power walls using a 1:1 scale. In addition, the Audi Select service allows a customer to drive three models consecutively in one year to determine which car is most suitable. Applications have interplay between tablet and video wall and table top surfaces sensing products placed on the surface.
Germany Germany, United Kingdom & China, April 2014

Business & Marketing guidelines

1

Offer a range of services that create an added experiential dimension while also providing additional direct, easy and intuitive access to your consumers.

2

Bring a guided personal process instead of an automated purchase process. The preference for experience means that consumers are paying attention to how you answer the phone, what you say when they’re in your car, where you stand when you give a tour, how friendly you are when you call to follow up.

3

Think immersive shopping. Provide rich in-store experiences, transform your store into a magical universe and add a ‘wow’ factor.

4

Keep in mind that customers want to have fun and feel entertained when they go shopping. They want to do more than just shop – they want to eat, play, socialize.

5

With a plethora of product and shopping experiences at hand, consumers have become more demanding. Bring to them the most spectacular experiences – and their respect for your brand will go along. Finding the undiscovered, unearthing a hidden treasure, learning the exotic and just having some fun are all part of getting the badge. The more unusual or unlikely, the better.

Summary

  • Consumers are favoring experiences over things, as the former bring them more enjoyment and pleasure in their lives. It’s about showing who they are over what they wear or own.
  • Luxury as a lifestyle seems to be more important than luxury goods on their own – wealthy people prefer having dinner in a five-star restaurant or taking a trip to a luxury resort rather than a Chanel leather handbag.
  • Total annual spending on luxuries now tops $1.4 trillion. This includes more than $770 billion on luxury experiences, nearly $350 billion on luxury cars and the rest on personal luxury goods such as watches, handbags and shoes. In China, experiential luxury sales are outpacing goods with 28% growth each year.
  • “Brand experiences” relate to how it feels to use a product, capturing the sensations, feelings, thoughts, and behavioral responses to brand-related stimuli. They extend the consumption occasion, deepening the enjoyment.

Experts that we recommend

philippe-starck Philippe Starck
French architect & designer
richard-breitner Richard Breitner
Passion for Innovation Program Manager at Dassault Systèmes
chistophe-dalstein Christophe Dalstein
CEO of EuropaCity, an urban center combining recreation, cultural facilities and shops, projected to be released in 2021