GashaponTM – the capsule toy vending machine uniquely from Japan – is common in many countries. Slot the coin in, twist the handle – and you will see a capsule toy rolling down. Gashapons are very popular – the largest gashapon department store in Tokyo spans 1,256 m2 floor space and carries 3,000 different capsule toys.
Why are gashapons creating a buzz? When playing with gashapons, most of the time players do not know what they are getting because the toys are randomly selected. However, the excitement induced by the “gasha” hand-cranking action and the joy of revealing what is inside the capsule makes the game highly addictive. It is not that much about the final product – the toy – but more of the experience it creates. This is the experience economy.
The term “experience economy” is created by Joseph Pine and James Gilmore. It talks about in a world of an abundance of options and ease of access to online commerce, staged experiences will be the differentiator.
The modern day gashapon – Nespresso machine. The same joy that the child goes through is now translated to coffee. Nescafe generated $6.9 billion sales in 2021 – its consumers are immersed in the joy of making and consuming coffee.
What is the experience economy?
- Good experience = Good functionality or The ability to cultivate joy
- Great experience = Good functionality + The ability to cultivate joy
At twimbit, we believe winning the experience economy entails two critical factors:
i. Functionality
The foundation of a good experience is delivering products with good functionality. Products and services with great user experiences, which deliver high efficiency and convenience will excel in this segment. Examples are companies like Grab, Amazon and TaoBao which products and services fulfill customers of different demographics and have created an ecosystem around their businesses. Not only that, their offerings are also hyper-personalised and could tackle individual needs precisely.
ii. Cultivate joy
Another aspect to fulfill in staging a positive experience is to create a situation which sparks joy. Feeling positive emotions can help customers leave a lasting impression on your brand – making your brand more memorable. Also, the more intrinsic the joy, the closer the customers will feel to the brand. Take visits to theme parks as an example, one can easily reiterate the stories about his roller coaster rides or haunted house experience to his friends. The positive cues (e.g. familiar characters and out-of-this-world set-ups) in the theme park have possibly instigated nostalgic memories and escapist fantasies, allowing theme park guests to better remember the brand.
A great experience should be the merging of both good functionality and the ability to spark joy. This concept isn’t new. We can see examples of it in a childhood candy from Korea – Dalgona. It’s in our everyday lives in the form of shopping complexes and has crossed into the digital world with e-commerce platforms.
Why is the experience economy important?
“In the experience economy, time is the currency of value. Either in time well spent, or time well saved.” – Pine & Gilmore.
Good experiences generate around $4.7 trillion in consumer spending every year globallya. Research also found that 95% of consumers read reviews before purchasing a product onlineb. That means, an experience that is impactful enough for customers to go out of their way and leave a positive review speaks volumes. Perhaps most importantly, a good customer experience opens doors to the gold mine all businesses are looking for – organic recommendations. People are more likely to trust brand information from friends and familyc and customers are 5.1x likelier to recommend a brand after a positive experiences.
Currently, we have multitudes of companies that help customers save time with seamless and frictionless experiences. Think – digitalised platforms. Customers also get plenty of options at fairly affordable price points. However, there are not enough companies that spend customers’ time wisely. In other words, not many brands make customers feel like their time spent with them is worthwhile. This therefore represents a differentiating point – brands which manage to make customers’ lives richer will win over customers easier.
“The experience economy will grow through the “gales of creative destruction” – to render irrelevant those who relegate themselves to the diminishing world of goods and services.” – B. Joseph Pine II and James H. Gilmore, Welcome to the Experience Economy.
End Note
aSpiegel Research Center (2017). How online review influence sales. Retrieved March 10, 2022, from https://irp-cdn.multiscreensite.com/00a8b24b/files/uploaded/Spiegel_Online Review_eBook_Jun2017_Pv2.pdf
bQualtrics (2021). 2022 Global Consumer Trends. Retrieved March 10, 2022, from https://www.qualtrics.com/ebooks-guides/2022-cx-trends/
cKantar (2020). Media & Me – Delivering Better Advertising – UK – Social Web Promotion. Retrieved March 10, 2022, from https://kantar.turtl.co/story/media-and-me-delivering-better-advertising-uk-social-web-promotion/page/5/1