In the post-pandemic world, will consumers return to products or seek new experiences?
A 2018 study by Expedia and the Center for Generational Kinetics found that a staggering 74 percent of Americans prioritized accumulating experiences over products.
According to the study, every age group — from baby boomers to millennials — would rather spend their hard-earned cash on things like travel, concerts or nights out on the patio of the local microbrewery than on material goods. I believe this shift away from an ownership mentality is also among the reasons people might choose to rent instead of own property today.
Of course, seeking new experiences was the trend — until it wasn’t; until the pandemic hit and shut down, or nearly shut down, the experience economy. Restaurants, hotels, bars, gyms, airlines, concerts, sports and all sorts of other experience businesses have taken a huge hit. Some won’t survive, and for the ones that do, business is likely to be anything but usual.
Covid-19 is especially persistent here in the U.S. Regardless of why that's the case, it appears the virus is going to be with us for a while, and so too might its impact on the economy, especially on sectors that rely on people who crave experiences.
A recently released study by a group of economists looked at the economic impact of the coronavirus. It painted a picture of protracted pressure on the experience economy. In summary, people with financial means are afraid to go out and, as a result, aren’t spending money in the places they used to frequent.
If that behavioral shift persists, it could do long-lasting damage to the experience economy, which raises a fundamental question: Will people who have money to spend shift their spending to products and consumable goods, the way people did after World War II when homeownership soared to 60 percent and nearly 90 percent of American households bought television sets? Or will the desire for experiences find new expressions and outlets?
I think this will be a defining question for society, and especially for people in the marketing industry. Will the desire to own products return to prominence, and if so, which types of products will be the ones people gravitate toward? My hunch is that it will be products that provide safety and comfort and emotionally enhance the home and the new home office.
Or maybe the desire for experiences will turn out to be irrepressible and experiences will morph instead of fade. If you can’t, or won’t, go to a packed stadium to see your favorite musician perform, might you attend a drive-in concert or a concert at an outdoor venue where social distancing can occur? Will artists start doing more private concerts in people’s homes or charging for online concerts?
Every industry that delivers an experience will have to rethink how that experience will occur in a world where people might be afraid to congregate in large numbers — even if state and federal governments give the all-clear.
Whichever scenario, or mix of scenarios, turns out to be true, I think we’re in for a fair amount of hardship. But along with it will no doubt come plenty of hidden opportunities. As businesses begin to rethink their models and recalibrate how they’ll matter to their customers in an evolving and post-pandemic world, they’re going to need smart marketers who are capable of helping them do more than sell.
As the senior vice president of a marketing and communications firm, I believe now is the time to make the shift and focus on helping your clients reimagine who they are and how they go to market, if you haven't already done so.
Here are a few questions to begin asking to get you started:
• Are you listening to your customers? Are they telling you through their behavior or feedback that they need something different from you, now that their situation has changed? Do they need an adjustment to your product or service or a different way of accessing it?
• Do your customers have new priorities, and how well does your product or service coincide with them? What changes might you make that would better align your company with their values, if they’ve shifted?
• If nothing has changed for the time being, what could, given the trends that are developing in your business and in society? Are there issues that might present themselves down the road that you’re just not experiencing at the moment?
A lot of the answers might not be obvious. But every business needs to think about how it’s going to operate in a world that might not ever look like the one we’ve become accustomed to.