ИСТИНА

The experience economy is a business theory, a scientific theory, and importantly, a practical theory. That is why it is present in a wide variety of industries, from tourism to the B2B segment. This pie chart shows eurostat data for 2019. The share of expenditure by households in different areas. If we look at it, things like restaurants, entertainment, leisure, culture and museums, together give the same share in expenditure as transport or, for example, food, second only to that for public utilities (as the prices of these services are very high in Europe). Thus, the first place in terms of household expenditure is for public utilities, while the second place is taken by what is in one way or another connected to the experience economy, where people buy not so much a service or a product as they buy themselves some new consumer experience or new impressions. The economics of the experience has its own "Marx and Engels" - B. Joseph Pine II and James H. Gilmore. They are teachers, practitioners, consultants and business coaches. 23 years ago, they wrote an article entitled “Welcome to the experience economy”. A year later, they wrote a book entitled "The experience economy: work is theatre & every business a stage". In other words, this concept is now more than 20 years old, and it is still popular and is becoming more relevant and in demand every year. So how did B. Joseph Pine II and James H. Gilmore justified the relevance of their concept and why we should talk about the experience economy? They said that there are three recognised economies: the agrarian economy, the industrial economy and the service economy. The experience economy, from their point of view, is the next step after the service economy. To make this clear to the ordinary reader, they suggested looking at the evolution of the birthday cake, from the agrarian economy to the experience economy. What happens in the agrarian economy? Parents buy the ingredients and make the cake. Basically, only the raw materials (commodities) from which the product is made are bought. In an industrial economy, things get simpler: you buy a ready-made cake, a good. In a service economy, a delivery service emerges: no need to go anywhere, the goods will be delivered at home. In the experience economy, one buys a cake, for example, from Chuck E. Cheese's, an American company that brings a cake and brings a party as a bonus. By and large, it is not even the service that is purchased, but the impression that the customer gets. And the interesting thing is that if you look at what costs more: the cheapest thing is usually to buy the ingredients, the finished cake costs more, the cake with delivery costs even more, and the price of a cake with an impression is even higher. So, in effect\fact, we are talking about creating a new value for the consumer in the experience economy. And this new value for the consumer generates some additional revenue for the company that creates the experience. B. Joseph Pine II and James H. Gilmore described the evolution of customer value with a graph. Competitive position is plotted vertically and prices are plotted horizontally. Another additional axis is the degree to which the customer's needs are taken into account. With each new step in the journey from raw material to product, from product to service, from service to experience, the competitive position of the brand is strengthened, consideration of the buyer's needs is reinforced, and a higher price can be assigned. There is one very important thing that differentiates experience from two or even three other economic offerings: raw materials\commodities, goods and services. It is the personal nature of this stage of economic evolution. Experiences are as personal as possible. A lot depends on how the impression interacts with the consumer, with their individual consciousness, views and tastes. Creating a good experience is therefore a much more difficult task than making a good product. Another important point is that in the experience economy there is a rethinking of what people need in terms of time. If in terms of the service economy, which still dominates most developed countries, the most important thing that can happen with time is time well saved. In an economy of experience, it's about time well spent. That is, in this case, not trying to save time, but trying to spend it well. In early 2020, this was difficult to do due to the pandemic and the closure of many places. However, now the restrictive measures are being lifted, all the restaurants, quest rooms are reopening. People have both needs: the need to save time and the need to have a good time. And, as a rule, when the option of having a good time is offered, the consumer is charged considerably more money than when the service is sold. There is a simultaneous development of services and experience in the economy right now. It cannot be said that experience will completely replace services. For example, there are two successful projects: Yandex.Lavka and Flying tiger. The first is a perfect example of time well saved, and the second is a pan-European chain of shops with cute things, toys, gliders, which illustrates time well spent. The most important point of the article and the book B. Joseph Pine II and James H. Gilmore wrote is that experience is not an amorphous construct; it is as much a real offering as services, goods and commodities. Thus, experience creates added value, which means that the creators of impressions are entitled to charge extra for them. So, by creating more value, a higher price can be assigned. In some cases, this added value is more than 90% (e.g. horror room). Having said that, it is very important to realise that since B. Joseph Pine II and James H. Gilmore wrote their first article, a lot has changed in more than 20 years. Experiences now exist not only as some phenomenon unique to the entertainment industry. They are present in all sorts of industries, for example in B2B: there is a company called Geek Squad, whose employees are IT professionals. They dress in stylish suits like people in black, meaning that they actually turn the routine process of fixing computers into an experience. B. Joseph Pine II and James H. Gilmore wrote in one of the last paragraphs of the article that, unfortunately, people have still not learned how to sell experiences. But in more than 20 years, some things have changed. For example, a bookshop such as Livraria Lello, which inspired J.K. Rowling to write the Harry Potter books and became the prototype of the Hogwarts library, began charging an entrance fee after an interview in which the writer reported on the place, because many people went there not to buy anything, but simply to see what the author of Harry Potter thought the Wizarding School library should look like. Thus, firstly, impressions are a new economic proposition, creating new value for the consumer and generating additional revenue for the company. Secondly, in order to start charging for an experience, you need to create an experience that customers will be willing to pay for. Thirdly, the way to do this is through proper experience design (leverage the four areas of experience and adhere to the five principles of experience creation). Now, that having entered the 21st century and living in hectic, hyperactive and over-stimulated age and considering the fact that the coronavirus pandemic is on the wane, as restaurants, quest rooms, theatres, museums and shopping centres begin to reopen their doors to visitors, the experience economy is becoming a way for many companies to generate revenue. Of course, the experience economy will not replace the service economy, but it has already become an indispensable complement to the goods and services that each of us uses every day.