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9 September 2022

Unforgettable: The Experience Economy

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Experience economy

The experience economy is a term that was coined by 1990’s economists Joseph Pine and James Gilmore – their book of the same name summed it up rather nicely in its subtitle ‘Work Is A Theater And Every Business A Stage‘. The third business epoch prioritizes experience over material objects and encourages brands to put more of a focus on presentation, community and customer engagement than ever before. 

Percentage

When it comes to how the experience economy has changed business you need to look no further than the packaging you use for your products – in the words of Steve Jobs: Packaging can be theater, it can create a story. Thanks to social media, unboxing videos and general aesthetic changes in brand presentation; packaging is at the forefront of consumer purchases and can sometimes be the reason a viewer is encouraged not to buy a product or doesn’t want to buy a product. The experience economy is as much about retaining old customers as it is about attracting new ones and doing this by offering unrivaled experiences that are different from their competitors and make them individuals in sectors that are saturated with similar words, products and aesthetics. The easiest way for a company to do this is with their packaging. The materials, the colors, the typography and image association are all part of the experience that any customer will be faced with, and will also trigger a desire to return to that experience to move far away from it.

 

What does the experience economy look like:

  • Digitization of in-person experiences
  • Growth of local experiences
  • Increase in immersive experiences
  • Rise of at-home experiences

 

As more and more areas of life become digitized we will see even more of a focus on the experience economy – what can an object give you? What will it let you do with your life? How will it improve your image? Nowadays more than ever before consumers are aware of the effect their choices have not just on their own life but on the environment, the lives of others involved in the manufacturing and supply chain. As well as being important in a B2C context this is also important in a B2B context – considering that Millennials now form the largest part of the US labor force and as such have a large amount of control over what their companies buy, more and more companies that sell B2B are having to focus on the experience of that company as well as the service/product being sold. How will it make the client feel? What will this product/service give them in terms of experience? 

Growth

The experience economy has grown as the economic power of millennials has grown – millennials are the largest generational group in America. Millennials grew up around the advent of social media and 60% say that the experiences they have define them more than the objects they possess. What does this mean for businesses? Millennials and the generations that follow are going to be more focused on what experience an object will give them and how that will impact their image both with themselves and outsiders. Thanks to social media this perspective when it comes to purchasing has been amplified to take in other people’s opinions and the validation of others. A name is a very powerful thing and brand’s must now become more than the product they sell; good examples of brands that have risen and successfully monetised upon this are: Red Bull, Monster, Coca Cola and Apple

 

Unboxing

Every month, 90,000 people type ‘unboxing’ into Youtube. They are led to pages and pages of content, scrolling through thousands of videos that show complete strangers opening up orders of various products and sharing their opinion on the presentation, the packaging and the object inside. In 2015 alone, 6½ years worth of unboxing content were uploaded. The power of unboxing is such that  70% of individuals bought a brand after seeing it in a video, and currently there are 53 million results for ‘unboxing’ on Youtube.

 

But why do viewers watch unboxing videos? And why do they matter so much to your brand? If you’ve never watched an unboxing video, now might be the time to try – especially if you’re thinking of implementing them in your own business. Whether you choose toys, technology, kitchen appliances or beauty hauls; you’ll find yourself feeling immensely satisfied by the result and your brain will release a hit of dopamine. The dopamine is what makes these videos so addictive – the suspense is what makes them interesting and the experience is what keeps viewers coming back for more. 

 

What is the psychology behind unboxing videos that your packaging can make the most of? As well as the psychology behind design, (see more about this in our article The Silent Salesman: Psychology Of Packaging) within our brains is a mirror neuron system, this means that when individuals you are emotionally connected to experience and express an emotion, you feel it too. So when you watch an unboxing channel with the same person and you build an emotional connection with them through watching the videos, you’re more likely to respect the opinions of this individual and feel the same excitement or lack of excitement as they feel when they produce the product. This is thanks mainly to the presentation of Youtube videos which requires the producer to talk to the camera and therefore break the fourth wall by addressing the viewer.

 

Unboxing videos appeal to people of all ages, with kids videos being especially popular. 25% of children under the age of 2 have their own tablet and 80% of parents give their device to their child between the ages of 0-2. Adults are just kids with credit cards, so focusing on how children relate and react to unboxing videos will help businesses understand what adults want from their products. For example, kids enjoy watching the same unboxing video on loop because they find it reassuring – from this you might deduce that this is why adults like branding so much. You know what you’re going to get but the product is still going to give you that dopamine hit that gets you coming back. That’s why Apple is such a successful brand – they keep their packaging the same, customers know what they’ll get but the experience is always incredibly satisfying partly because of the aforementioned elements – personalisation of objects also helps to strengthen this hit. And it’s all thanks to the Anticipation System our brains have, we are hardwired to crave positive experiences and anticipate them well before they actually come to fruition; this is where expectations are either met or not. Similarly really bad experiences that are anticipated and triggered by the limbic system will stop viewers purchasing a product – the unboxing experience of the Youtuber will be mirrored in the brain of the viewer leading to a negative view of the product and sometimes the whole brand. This is backed up by the prefrontal cortex which regulates emotional responses, it is (for want of a better image) the parent figure of the limbic system which often indulges in irrational reactions that stem from the organisms need to survive. Of course there is no need to survive an unboxing video or experience in the same way our ancestors needed to survive a saber toothed tiger or crop failure.  

 

75% of internet users aged 16-64 use social media to research brands and products. In the last year alone unboxing videos have grown in popularity by 57%, and 34% of annual unboxing views happen in the final quarter of the year when anticipation for parcels is running high. What does this mean for your business and the experience economy? Unboxing videos using influencers and customers as review points are essential for you to grow, giving an experience as well as a product or service will add value to your brand.

 

If you want to know about how to make the most of your packaging in unboxing videos take a look at our article Unbox ’til You Drop: How To Harness The Power Of Unboxing Videos