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How do economies change? The unabridged history of economic progress can be recapitulated in the four-stage development of the birthday block. As a vestige of the agrestal economy, mothers made birthday cakes from scratch, mixing farm bolt (flour, carbohydrate, butter, and eggs) that together cost mere dimes. Equally the appurtenances-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for premixed ingredients. Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at $10 or $fifteen, cost ten times every bit much equally the packaged ingredients. At present, in the time-starved 1990s, parents neither make the birthday cake nor even throw the party. Instead, they spend $100 or more to "outsource" the entire result to Chuck E. Cheese's, the Discovery Zone, the Mining Company, or some other business that stages a memorable issue for the kids—and frequently throws in the cake for free. Welcome to the emerging experience economy.

Economists have typically lumped experiences in with services, simply experiences are a distinct economical offering, as different from services as services are from goods. Today nosotros tin place and describe this fourth economic offering because consumers unquestionably desire experiences, and more and more businesses are responding by explicitly designing and promoting them. As services, similar goods before them, increasingly become commoditized—think of long-distance telephone services sold solely on toll—experiences take emerged as the next footstep in what we call the progression of economical value. (Run across the showroom "The Progression of Economic Value.") From now on, leading-edge companies—whether they sell to consumers or businesses—will find that the next competitive battleground lies in staging experiences.

The Progression of Economic Value

An experience is not an amorphous construct; it is equally real an offering as any service, good, or commodity. In today's service economy, many companies only wrap experiences effectually their traditional offerings to sell them better. To realize the full benefit of staging experiences, however, businesses must deliberately design engaging experiences that control a fee. This transition from selling services to selling experiences will be no easier for established companies to undertake and weather condition than the concluding nifty economical shift, from the industrial to the service economy. Unless companies want to be in a commoditized business organization, yet, they will be compelled to upgrade their offerings to the adjacent stage of economic value.

The question, then, isn't whether, but when—and how—to enter the emerging experience economic system. An early wait at the characteristics of experiences and the design principles of pioneering experience stagers suggests how companies tin can begin to answer this question.

Staging Experiences that Sell

To appreciate the difference betwixt services and experiences, recall the episode of the old tv set bear witness Taxi in which Iggy, a usually atrocious (simply fun-loving) cab driver, decided to become the best taxi driver in the world. He served sandwiches and drinks, conducted tours of the city, and even sang Frank Sinatra tunes. By engaging passengers in a way that turned an ordinary cab ride into a memorable result, Iggy created something else entirely—a distinct economic offering. The experience of riding in his cab was more than valuable to his customers than the service of being transported by the cab—and in the TV prove, at least, Iggy's customers happily responded by giving bigger tips. By asking to go around the block once again, one patron even paid more than for poorer service just to prolong his enjoyment. The service Iggy provided—taxi transportation—was simply the stage for the feel that he was really selling.

An feel occurs when a visitor intentionally uses services equally the stage, and goods as props, to engage individual customers in a way that creates a memorable result. Commodities are fungible, goods tangible, services intangible, and experiences memorable. (See the nautical chart "Economic Distinctions.") Buyers of experiences—we'll follow the lead of feel-economy pioneer Walt Disney and call them "guests"—value what the visitor reveals over a duration of time. While prior economic offerings—commodities, goods, and services—are external to the buyer, experiences are inherently personal, existing only in the mind of an individual who has been engaged on an emotional, physical, intellectual, or even spiritual level. Thus, no two people can have the same feel, considering each experience derives from the interaction between the staged event (like a theatrical play) and the individual's state of mind.

Economic Distinctions

Experiences have e'er been at the heart of the entertainment business—a fact that Walt Disney and the company he founded have creatively exploited. Just today the concept of selling an entertainment experience is taking root in businesses far removed from theaters and amusement parks. New technologies, in particular, encourage whole new genres of feel, such as interactive games, Cyberspace chat rooms and multi-histrion games, motion-based simulators, and virtual reality. The growing processing power required to return e'er-more immersive experiences at present drives demand for the goods and services of the computer industry. In a speech fabricated at the November 1996 COMDEX computer trade show, Intel chairman Andrew Grove declared, "Nosotros demand to await at our business organisation equally more than but the building and selling of personal computers. Our business is the commitment of information and lifelike interactive experiences."

Today the concept of selling experiences is spreading across theaters and theme parks.

At theme restaurants such as the Hard Rock Cafe, Planet Hollywood, or the Firm of Blues, the food is merely a prop for what's known equally "eatertainment." And stores such as Niketown, Cabella's, and Recreational Equipment Incorporated draw consumers in by offering fun activities, fascinating displays, and promotional events (sometimes labeled "shoppertainment" or "entertailing").

Simply experiences are not exclusively about entertainment; companies stage an experience whenever they engage customers in a personal, memorable fashion. In the travel concern, former British Airways chairman Sir Colin Marshall has noted that the "commodity heed-set" is to "think that a business is just performing a function—in our instance, transporting people from point A to point B on time and at the everyman possible price." What British Airways does, according to Sir Colin, is "to go beyond the part and compete on the basis of providing an experience." (Run across "Competing on Customer Service: An Interview with British Airways' Sir Colin Marshall," HBR November–Dec 1995.) The visitor uses its base service (the travel itself) as the stage for a distinctive en route experience—one that attempts to transform air travel into a respite from the traveler'south normally frenetic life.

Neither are experiences only for consumer industries. Companies consist of people, and business-to-business settings also present stages for experiences. For case, a Minneapolis computer-installation and repair company calls itself the Geek Squad. Its "special agents" costume themselves in white shirts with sparse blackness ties and pocket protectors, carry badges, drive erstwhile cars, and plow a humdrum action into a memorable come across. Similarly, many companies rent theater troupes—like the St. Louis-based trainers I World Music, facilitators of a plan chosen Synergy through Samba—to turn otherwise ordinary meetings into improvisational events that encourage breakthrough thinking.

Business-to-business marketers increasingly create venues as elaborate as whatsoever Disney attraction in which to sell their appurtenances and services. In June 1996, Silicon Graphics, for example, opened its Visionar-ium Reality Center at corporate headquarters in Mountain View, California, to bring customers and engineers together in an environs where they can collaborate with real-time, 3-dimensional production visualizations. Customers can view, hear, and touch—every bit well as drive, walk, or fly—through myriad product possibilities. "This is experiential computing at its ultimate, where our customers tin can know what their products will look like, sound like, experience like before manufacturing," said then chairman and CEO Edward McCracken.

You lot Are What You Charge For

Find, however, that while all of these companies stage experiences, nearly are still charging for their appurtenances and services. Companies generally move from 1 economic stage to the next in incremental steps. In its heyday in the 1960s and 1970s, IBM'south slogan was "IBM Means Service," and the computer manufacturer indeed lavished services—for free—on any company that would purchase its hardware appurtenances. It planned facilities, programmed code, integrated other companies' equipment, and repaired its own machines; its service offerings overwhelmed the contest. Simply eventually IBM had to charge customers for what it had been giving away for free, when a Justice Department adjust required the visitor to unbundle its hardware and software. The regime society even so, IBM couldn't afford to proceed to come across increasing customer-service demands without explicitly charging for them. Services, it turned out, were the visitor's most valued offerings. Today, with its mainframe computers long since commoditized, IBM's Global Services unit grows at double-digit almanac rates. The company no longer gives away its services to sell its appurtenances. In fact, the deal is reversed: the visitor volition buy its clients' hardware if they'll contract with Global Services to manage their information systems. IBM still articles computers, but now it'due south in the business of providing services.

It'south an indication of the maturity of the service economy that IBM and other manufacturers now make greater profits from the services than from the appurtenances they provide. General Electric's GE Capital unit and the fiscal arms of the Big Three automakers are cases in indicate. As well, information technology's an indication of the immaturity of the experience economy that well-nigh companies providing experiences—similar the Hard Rock Cafe, the Geek Squad, or Silicon Graphics—don't all the same explicitly charge for the events that they stage.

No company sells experiences as its economical offer unless it actually charges guests an access fee. An event created but to increase customer preference for the commoditized goods or services that a visitor actually sells is not an economic offer. But even if a visitor rejects (for at present) charging access to events that it stages, its managers should already exist asking themselves what they would exercise differently if they were to charge admission. The answers will help them meet how their visitor might begin to move forward into the experience economy, for such an arroyo demands the design of richer experiences.

Companies should think about what they would exercise differently if they charged access.

Moving picture theaters already charge admission to come across featured films, but Jim Loeks, part-owner of the Star theater complex in Southfield, Michigan, told Forbes magazine that "information technology should be worth the price of the moving picture simply to get into the theater." Star charges 3 million customers a year 25% higher access for a movie than a local competitor does because of the fun-house experience it provides. Soon, perhaps, with 65,000 foursquare feet of restaurants and stores existence added to the complex, Star will accuse its customers admission just to get into the complex.

Some retailers already border on the experiential. At the Sharper Image or Brookstone, notice how many people play with the gadgets, mind to miniaturized stereo equipment, sit in massage chairs, and so leave without paying for what they valued, namely, the experience. Could these stores charge admission? Non as they are currently managed. But if they did charge an admission fee, they would be forced to stage a much better experience to attract paying guests. The merchandise mix would need to change more oft—daily or fifty-fifty hourly. The stores would have to add demonstrations, showcases, contests, and other attractions to enhance the customer experience.

With its Niketown stores, Nike is about in the experience business organization. To avert alienating its existing retail channels, Nike created Niketown as a merchandising exposition. Information technology's ostensibly for testify—to build the brand prototype and stimulate buying at other retail outlets—not for selling. If that is so, and then why non explicitly charge customers for experiencing Niketown? Would people pay? People accept already queued to enter the Niketown on Chicago's Michigan Avenue. An admission fee would force Nike to phase more engaging events inside. The stores might really use the basketball court, say, to stage one-on-one games or rounds of equus caballus with National Basketball Association players. Afterwards customers could buy customized Nike T-shirts, commemorating the date and score of events—consummate with an action photo of the winning hoop. At that place might be more interactive kiosks for educational exploration of past athletic events. Virtual reality machines could let y'all, equally Nike'southward advertising attests, be Tiger Woods. Nike could probably generate as much admission-based revenue per square foot from Niketown equally the Walt Disney Company does from its entertainment venues—and as Disney should (but does non) yield from its own retail stores. For the premier visitor of the feel economy, Disney's specialty retailing exterior of its ain theme parks disappoints. Its mall stores aren't much different from anyone else's, precisely because Disney doesn't charge admission to them—and and so doesn't bother creating the extraordinary experiences it so expertly creates elsewhere.

An entrepreneur in State of israel has entered the experience economic system with the opening of Cafe Ke'ilu, which roughly translates as "Cafe Make Believe." Managing director Nir Caspi told a reporter that people come to cafés to be seen and to meet people, not for the nutrient; Cafe Ke'ilu pursues that ascertainment to its logical decision. The institution serves its customers plates and mugs that are empty and charges guests $iii during the week and $6 on weekends for the social experience.

Charging admission—requiring customers to pay for the experience—does not mean that companies take to finish selling appurtenances and services. Disney generates significant profits from parking, food, and other service fees at its theme parks equally well as from the auction of memorabilia. But without the staged experiences of the visitor'due south theme parks, cartoons, movies, and Tv shows, customers would have nothing to think—and Disney would have no characters to exploit.

In the full-fledged experience economy, retail stores and even unabridged shopping malls volition accuse access before they permit a consumer even fix foot in them. Some shopping malls, in fact, already do accuse admission. We're not thinking of the Mall of America outside of Minneapolis, which contains an entertainment park; it charges for the rides, but the shopping is still free. We're referring to the Gilroy Garlic Festival in California, the Minnesota Renaissance Festival, the Kitchener-Waterloo Oktoberfest in Ontario, Canada, and other seasonal festivals that are really outdoor shopping malls and practice indeed charge admission. Consumers estimate them worth the fees because the festival operators script distinctive experiences effectually enticing themes, equally well as stage activities that obsess customers earlier, after, and while they store. With nearly every customer leaving with at least one bag of merchandise, these festival experiences clearly capture shopping dollars that otherwise would be spent at traditional malls and retail outlets.

Some companies will eventually be like trade shows, charging customers to sell to them.

The business organization equivalent of a shopping mall is a trade show—a identify for finding, learning about, and, if a demand is met, purchasing exhibitors' offerings. Trade-show operators already charge admission to the experiences they create; individual concern-to-business concern companies volition need to do the same, substantially charging customers to sell to them. Diamond Technology Partners for instance, stages the Diamond Exchange, a serial of forums that aid members explore the digital future. Electric current and potential clients pay tens of thousands of dollars annually to attend considering what they gain—fresh insights, self-discovery, and engaging interactions—is worth information technology. No one minds that in staging the event, Diamond greatly improves its chances of selling follow-up consulting piece of work.

The Characteristics of Experiences

Before a company tin can charge admission, information technology must design an experience that customers gauge to be worth the price. Excellent design, marketing, and delivery will exist as as crucial for experiences as they are for goods and services. Ingenuity and innovation volition always precede growth in revenue. Withal experiences, like goods and services, have their own distinct qualities and characteristics and nowadays their ain design challenges.

One way to think about experiences is beyond two dimensions. The first corresponds to customer participation. At one stop of the spectrum lies passive participation, in which customers don't impact the functioning at all. Such participants include symphony-goers, for example, who experience the event as observers or listeners. At the other end of the spectrum lies active participation, in which customers play key roles in creating the operation or outcome that yields the experience. These participants include skiers. Merely even people who plow out to lookout man a ski race are not completely passive participants; just by being there, they contribute to the visual and aural effect that others experience.

The second dimension of experience describes the connection, or environmental relationship, that unites customers with the event or functioning. At 1 end of the connection spectrum lies absorption, at the other end, immersion. People viewing the Kentucky Derby from the grandstand tin can blot the event taking identify beneath and in front of them; meanwhile, people standing in the infield are immersed in the sights, sounds, and smells that surround them. Furiously scribbling notes while listening to a physics lecture is more arresting than reading a textbook; seeing a film at the theater with an audience, large screen, and stereophonic audio is more immersing than watching the same film on video at home.

We can sort experiences into four broad categories according to where they autumn along the spectra of the two dimensions. (See the exhibit "The 4 Realms of an Feel.") The kinds of experiences most people think of as amusement—watching tv, attending a concert—tend to exist those in which customers participate more passively than actively; their connection with the event is more likely ane of absorption than of immersion. Educational events—attending a class, taking a ski lesson—tend to involve more active participation, just students (customers, if you will) are still more outside the event than immersed in the activeness. Escapist experiences tin teach just besides as educational events can, or amuse just too as entertainment, but they involve greater customer immersion. Acting in a play, playing in an orchestra, or descending the Chiliad Canyon involve both active participation and immersion in the experience. If yous minimize the customers' active participation, however, an escapist effect becomes an experience of the fourth kind—the esthetic. Here customers or participants are immersed in an activeness or environment, but they themselves accept fiddling or no issue on information technology—like a tourist who only views the 1000 Canyon from its rim or like a visitor to an art gallery.

The Four Realms of an Feel

Mostly, nosotros find that the richest experiences—such as going to Disney Globe or gambling in a Las Vegas casino—embrace aspects of all 4 realms, forming a "sweet spot" effectually the area where the spectra meet. Simply still, the universe of possible experiences is vast. Somewhen, the most significant question managers tin ask themselves is "What specific experience will my company offering?" That experience will come to define their business concern.

Experiences, like appurtenances and services, have to meet a client demand; they have to work; and they take to be deliverable. But as goods and services issue from an iterative process of research, design, and development, experiences derive from an iterative process of exploration, scripting, and staging—capabilities that aspiring experience merchants volition need to chief.

Designing Memorable Experiences

We expect that experience design volition get as much a business art as product design and process design are today. Indeed, design principles are already credible from the practices of and results obtained past companies that accept (or nearly take) advanced into the experience economy. We have identified five key experience-design principles.

Theme the experience.

Just hear the proper noun of any "eatertainment" eatery—Hard Stone Buffet, Planet Hollywood, or the Rainforest Cafe, to name a few—and y'all instantly know what to expect when you enter the institution. The proprietors have taken the starting time, crucial stride in staging an experience by envisioning a well-divers theme. One poorly conceived, on the other hand, gives customers goose egg around which to organize the impressions they run across, and the feel yields no lasting retention. An breathless theme is like Gertrude Stein's Oakland: "In that location is no there there." Retailers often offend the principle. They talk of "the shopping experience" but fail to create a theme that ties the disparate merchandising presentations together into a staged experience. Home-appliance and electronics retailers in particular testify fiddling thematic imagination. Row upon row of washers and dryers and wall later wall of refrigerators accentuate the sameness of different companies' stores. Shouldn't at that place be something distinctive well-nigh an establishment called Circuit City, for example?

Consider the Forum Shops in Las Vegas, a mall that displays its distinctive theme—an aboriginal Roman market place—in every particular. The Simon DeBartolo Group, which developed the mall, fulfills this motif through a panoply of architectural effects. These include marble floors, stark white pillars, "outdoor" cafés, living copse, flowing fountains—and even a painted bluish sky with fluffy white clouds that yield regularly to fake storms, complete with lightning and thunder. Every mall archway and every store-front is an elaborate Roman re-cosmos. Every hour within the main entrance, statues of Caesar and other Roman luminaries come to life and speak. "Hail, Caesar!" is a frequent cry, and Roman centurions periodically march through on their way to the next Caesar's Palace casino. The Roman theme even extends into some of the shops. A jewelry store'due south interior, for instance, features scrolls, tablets, Roman numerals, and gilded draperies. The theme implies opulence, and the mall'south 1997 sales—more than than $one,000 per square foot, compared with a typical mall'southward sales of less than $300—suggest that the experience works.

An constructive theme is concise and compelling. Information technology is not a corporate mission statement or a marketing tag line. Information technology needn't be publicly articulated in writing. Only the theme must drive all the design elements and staged events of the feel toward a unified story line that wholly captivates the customer. Educational Discoveries and Professional Grooming International of Orem, Utah, phase a solar day-long class on bones accounting skills to nonfinancial managers. Their exquisitely simple theme—running a lemonade stand up—turns learning into an experience. Students use real lemons and lemonade, music, balloons, and a good deal of ballyhoo while they create a corporate fiscal statement. The theme unifies the experience in the students' minds and helps brand the learning memorable.

Harmonize impressions with positive cues.

While the theme forms the foundation, the experience must be rendered with indelible impressions. Impressions are the "takeaways" of the experience; they fulfill the theme. To create the desired impressions, companies must introduce cues that assert the nature of the experience to the invitee. Each cue must back up the theme, and none should be inconsistent with it.

To create the desired impression, companies must provide cues that affirm the nature of the experience.

George Harrop, founder of Barista Brava, a franchised chain of coffee bars based in Washington, D.C., adult the company'southward theme of "the marriage of Old-Globe Italian espresso bars with fast-paced American living." The interior decor supports the One-time World theme, and the carefully designed design of the floor tiles and counters encourages customers to line up without the usual signage or ropes that would detract from that theme. The impressions convey quick service in a soothing setting. Furthermore, Harrop encourages baristas to remember faces and then that regular customers are handed their usual guild without even having to ask.

Fifty-fifty the smallest cue can aid the cosmos of a unique feel. When a restaurant host says, "Your tabular array is set," no particular cue is given. But when a Rainforest Cafe host declares, "Your adventure is about to begin," it sets the stage for something special.

It'southward the cues that make the impressions that create the feel in the customer's mind. An experience can be unpleasant merely because some architectural feature has been overlooked, under-appreciated, or uncoordinated. Unplanned or inconsistent visual and audible cues tin leave a customer confused or lost. Accept you ever been unsure how to find your hotel room, even later on the forepart-desk staff provided detailed directions? Ameliorate, clearer cues along the way would have enhanced your feel. Standard Parking of Chicago decorates each floor of its O'Hare Airport garage with icons of different Chicago sports franchises—the Bulls on ane flooring, the White Sox on another, and and so forth. And each level has its ain signature song wafting through it. "You never forget where you parked," i Chicago resident remarked, which is precisely the experience a traveler wants after returning from a week of travel.

Eliminate negative cues.

Ensuring the integrity of the customer experience requires more than the layering on of positive cues. Experience stagers also must eliminate annihilation that diminishes, contradicts, or distracts from the theme. Most constructed spaces—malls, offices, buildings, or airplanes—are littered with meaningless or piddling letters. While customers sometimes do need instructions, too frequently service providers choose an inappropriate medium or message form. For example, trash bins at fast-food facilities typically display a "Cheers" sign. True, it's a cue to customers to charabanc their own trays, merely it likewise says, "No service here," a negative reminder. Experience stagers might, instead, plow the trash bin into a talking, garbage-eating grapheme that announces its gratitude when the chapeau swings open. Customers become the aforementioned bulletin simply without the negative cue, and self-busing becomes a positive office of the eating experience.

The easiest way to turn a service into an feel is to provide poor service—thus creating a memorable encounter of the unpleasant kind. "Overservicing" in the name of customer intimacy tin can also ruin an experience. Airline pilots interrupt customers who are reading, talking, or napping to announce, "Toledo is off to the right side of the aircraft." At hotels, front-desk-bound personnel interrupt contiguous conversations with guests to field telephone calls. In the guestrooms, service reminders clutter end tables, dressers, and desktops. (Hide them away and housekeeping will supplant these annoyances the adjacent morning.) Eliminating negative cues—by transmitting pilots' offhand announcements through headsets instead of speakers, past assigning off-stage personnel to answer phones, and by placing guest information on an interactive television channel—creates a more pleasurable customer experience.

Mix in memorabilia.

Certain goods have e'er been purchased primarily for the memories they convey. Vacationers purchase postcards to evoke a treasured sight, golfers purchase a shirt or cap with an embroidered logo to think a course or round, and teenagers obtain T-shirts to think a rock concert. They purchase such memorabilia equally a concrete reminder of an experience.

People already spend tens of billions of dollars every twelvemonth on memorabilia. These goods generally sell at price points far above those commanded past like items that don't represent an experience. A Rolling Stones concert-goer, for example, will pay a premium for an official T-shirt emblazoned with the date and city of the concert. That's because the price points are a office less of the cost of goods than of the value the heir-apparent attaches to remembering the experience.

If airlines truly sold experiences, more than passengers would really shop in the seat-pocket catalogs for mementos of their flight.

If service businesses like airlines, banks, grocery stores, and insurance companies find no need for memorabilia, information technology's because they practice not stage engaging experiences. Merely if these businesses offered themed experiences layered with positive cues and devoid of negative cues, their guests would want and would pay for memorabilia to commemorate their experiences. (If guests didn't want to, it probably would mean the experience wasn't great.) The special agents of the Geek Team, for example, stage such a distinctive computer-repair experience that customers buy T-shirts and lapel pins from the company's Web site. If airlines truly were in the experience-staging business organisation, more than passengers would actually shop in those seat-pocket catalogs for appropriate mementos. Likewise, mortgage loans would inspire household keepsakes; grocery checkout lanes would stock souvenirs in lieu of nickel-and-dime impulse items; and perhaps even insurance policy certificates would be considered suitable for framing.

Appoint all 5 senses.

The sensory stimulants that accompany an feel should back up and enhance its theme. The more senses an experience engages, the more effective and memorable it tin exist. Smart shoeshine operators augment the smell of polish with crisp snaps of the cloth, scents and sounds that don't make the shoes any shinier just do make the experience more engaging. Savvy hair stylists shampoo and utilise lotions not simply because the styling requires it but because they add together more tactile sensations to the client experience. Similarly, grocery stores pipe bakery smells into the aisles, and some utilize light and sound to simulate thunderstorms when misting their produce.

The mist at the Rainforest Cafe appeals serially to all five senses. Information technology is commencement apparent as a sound: Sss-sss-zzz. So you run across the mist ascension from the rocks and feel it soft and cool against your skin. Finally, you scent its tropical essence, and you taste (or imagine that y'all do) its freshness. What you can't be is unaffected by the mist.

Some cues heighten an feel through a single sense affected through hitting simplicity. The Cleveland Bicentennial Committee spent $4 million to illuminate eight automobile and railroad bridges over the Cuyahoga River near a nightspot area called the Flats. No ane pays a toll to view or even to cross these illuminated bridges, only the dramatically lighted structures are a prop that city managers promise will help attract tourist dollars by making a trip to downtown Cleveland a more memorable nighttime feel.

Not all sensations are adept ones, and some combinations don't work. Bookstore designers have discovered that the scent and taste of coffee go well with a freshly cracked volume. But Duds north' Suds went bust attempting to combine a bar and a money-operated laundromat. The smells of phosphates and hops, plain, aren't mutually complementary.

Entering the Experience Economy

Using these five blueprint principles, of course, is no guarantee of success; no one has repealed the laws of supply and demand. Companies that neglect to provide consistently engaging experiences, overprice their experiences relative to the value perceived, or overbuild their capacity to stage them will of course see pressure on demand, pricing, or both. One stalwart of the children's birthday-party circuit, Discovery Zone, has had a rough few years considering of inconsistent experience staging, poorly maintained games, and little consideration of the feel received by adults, who are, afterwards all, paying for the result. More recently, the Rainforest Cafe and Planet Hollywood accept encountered trouble because they accept failed to refresh their experiences. Guests notice nothing different from ane visit to the next. Disney, on the other paw, avoids staleness by oft adding new attractions and fifty-fifty whole parks such every bit the Fauna Kingdom, which opened in the spring of 1998.

As the experience economy unfolds, more than than a few feel stagers volition exit the business organisation. It'south hard to imagine, for instance, that every i of the scores of theme-based restaurants operating today will final into the millennium. Think that once there were more 100 automakers in eastern Michigan and more than forty cereal makers in western Michigan. At present only the Big Three automakers in Detroit and the Kellogg Visitor in Battle Creek remain. The growth of the industrial economy and the service economic system came with the proliferation of offerings—appurtenances and services that didn't be before imaginative designers and marketers invented and developed them. That's also how the experience economy volition grow: through the "gales of creative destruction," as the economist Joseph Schumpeter termed information technology—that is, business concern innovation, which threatens to return irrelevant those who relegate themselves to the diminishing world of goods and services.

A version of this article appeared in the July–August 1998 issue of Harvard Business Review.