What is the experience economy and why do we need to think about it creatively?

14 Oct 2019

Tammuz Dubnov at Inspirefest 2019. Image: Conor McCabe Photography

At Inspirefest 2019, Tammuz Dubnov, founder and CEO of Zuzor, talked about the changing consumer market and how businesses need to evolve if they want to remain competitive.

Amid the keynote speeches and panel discussions at Inspirefest 2019, Tammuz Dubnov took to the stage to perform an aerial hoop routine.

While this may have not been what the audience was expecting, it was just one element of Dubnov’s presentation, which focused on the concept of the ‘experience economy’ – and why businesses need to think about it seriously if they want to gain, and maintain, the attention of their target market.

Dubnov explained that the experience economy idea has “been in the works for many years”, first appearing in Pine and Gilmore’s 1998 article, ‘Welcome to the Experience Economy’, which was written “before there were phones in our pockets taking our attention, before there was Facebook and Twitter and Instagram, and all those things fighting for our attention all the time”.

However, Dubnov said that it has become even more relevant now in a world that is more high-tech and more connected, with more options for consumers than ever before and trends that are constantly changing.

“All these things really take the world to the next level and really increase the pace of innovation. In that sense, they also increase competition and what businesses have to do.

“What that means for you is you’re getting busier and busier and busier. But not only you, also your audience. The consumers you’re trying to get to, the people you are trying to connect with, all of them are busier, which really means that it’s much harder for you to actually get their attention and communicate what you want to do.

“That’s also where creativity comes in, where now you have to engage them in a new way. Why should they listen to you when they can just look on their phone?”

An existential crisis

Dubnov is a professional dancer and aerialist, but has a background in maths and computer science, and “worked hard to combine those different worlds”. He founded Zuzor, a company that is trying to “combine physical and digital spaces to make a canvas that’s interactive and experiential”.

Zuzor creates experiential technology, developing ways for different businesses to enter the experience economy, with things such as digital signage and displays to engage a target audience in new ways.

This is something that’s becoming more relevant across multiple industries as the experience economy is changing consumer behaviour and expectations, according to Dubnov, who started with the example of retail.

“You used to have to go out to the mall, you used to have to look through lots of inventory and apparel to get to what you want. And now, that’s no longer the case.

“Amazon is kind of taking over. Everything you need, you can pull out your phone, you can order on Amazon and it’ll be there in one or two days.”

It’s a similar story for restaurants. “You can order to go, you can order online,” he said. “There’s lots and lots of services that really make eating out that much less popular, that much less necessary. So now, even in dining there’s more of an experience requirement.”

Cinema, he added, is “having a little bit of an existential crisis” because you can watch movies on Netflix at home, while hotels are “having to focus more and more on their audience because Airbnb is so strong”, and with museums, “you’re not really going for the knowledge any more” because any information you might want is available on the web with the quick touch of a button.

Of course, businesses focused on customer experience in the past, but now many are stepping up to another level and forcing others to adapt if they want to keep up.

“It’s even more true now because of the increased technology, increased availability of everything,” Dubnov said.

“So that’s what leads us to the experience economy – these kind of existential crises that some industries are facing.”

Theory of evolution

Dubnov traced the development of the experience economy – and how it might apply to various types of business – through the analogy of cake.

Back in time of the agrarian economy, if you wanted a cake you needed to buy the ingredients and bake it yourself. In the industrial economy, you could then speed up the process by using a cake mix, and when it came to the service economy you could just go straight to the bakery and buy one.

So where do we go next? “You’re not just buying the cake, you’re buying the way its staged,” he explained. “We’ve taken a trip from base commodity to the full completed experience.”

‘The human connection is what we really need to focus on, and that’s the part where the experience comes in’

This is where creativity really comes in, Dubnov added, with the task of engaging your audience in an immersive and novel way – while separating yourself from your competitors.

“If you want to stay premium, want to stay competitive, you have to evolve.

“Your core offering is now the memory of the experience, what they take home. And with social media, also what they take a picture of.”

Much like performing an aerial routine in the middle of a presentation at a sci-tech event, it’s about doing something different and creating an experience that your audience will remember.

“It’s not just what you do, it’s how you do it and how the customer experiences it, how your audience experiences it, and really the emotional connect that’s left afterwards,” he said.

“As we moved through the markets, from commodity to goods to services and out to experiences, the price point kept going up and up and up, and there’s more and more of a premium. But also the opportunity for differentiation comes in.”

Quoting Charles Darwin, Dubnov concluded that it’s not the strongest of the species that survive, but the one that is most responsive to change.

“Hopefully you’ve noticed this in your day-to-day life. Because of all the technology, all the innovation happening, the human connection is what we really need to focus on, and that’s the part where the experience comes in.”

Inspirefest is Silicon Republic’s international event celebrating the point where science, technology and the arts collide. Ultra Early Bird tickets for Inspirefest 2020 are available now.

Sarah Harford was sub-editor of Silicon Republic