"No list of seminal business books would be complete without The Experience Economy, the 1999 bestseller by American academics B Joseph Pine II and James H Gilmore. They argued that the selling of experiences was the fourth great stage in our consumer development after commodities, goods and services.
"As a vestige of the agrarian economy, mothers made birthday cakes from scratch, mixing farm commodities (flour, sugar, butter, and eggs) that together cost mere dimes. As the goods-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for pre-mixed ingredients.
"Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at US$10 or US$15, cost ten times as much as the packaged ingredients. Now, in the time-starved 1990s, parents neither make the birthday cake nor even throw the party. Instead, they spend US$100 or more to 'outsource' the entire event to Chuck E. Cheese's."
B Joseph Pine II and James H Gilmore
In recent years, everyone from high street shops to tourist trails to luxury spas has sold consumers experiences - stirring our emotions for the highest price possible. But this model has been as badly hit as any sector by the pandemic. Fittingly, the Chuck E. Cheese restaurant chain is one high-profile casualty, blaming the pandemic for entering Chapter 11 bankruptcy over the summer.
It would be easy to think that demand for experiences will simply return next year or the year after, but I'm not convinced. Instead, something slightly different may be emerging.
Are you experienced?
Prior to 2020, the experience economy appeared to be booming. In the US, sales of spectator events, amusement parks, restaurants and travelling grew much faster during the 2010s than those of goods, while the UK was similarly successful in this respect. People spent generously to make memories - witness the recent trend for attending festivals based around favourite TV shows such as Friends.
Millennials seemed to particularly prioritise memorable experiences over buying things, documenting it all via social media. But then, of course, came COVID-19. A July report from PwC found that accommodation and food were the worst hit service sectors in the UK, followed by arts, entertainment and recreation.
Memorable experiences are about triggering sensations. People remember feeling excited by an adrenaline rush, such as riding a rollercoaster. For example, research on theme parks suggests that to be successful, they must heighten the thrill that visitors expect.
Equally, experiences rely on being shared with others. Sharing an activity intensifies the experience. Those who take part in cosplay, for example, where participants put on costumes and act out character parts, enhance their hobby by swapping advice and giving mutual support.
Obviously, pursuing and sharing such encounters has been difficult under COVID-19 restrictions. This has hit the likes of tourism, hospitality, events, higher education, theatres and concerts.
