The Rise of Experiential Products - Why Businesses Are Shifting Focus to Emotions
I believe the following statement stands true for most people: we work hard to earn money, and we often use that money to purchase goods and services that elicit positive feelings. While this statement may overlook the intangible factors money can provide—such as power, ego, and status—it generally holds true that we leverage money as a means to acquire tangible experiences. Whether it is a beautiful dress, a concert ticket to see your favorite musician, a trip to Ibiza, or an online course to learn a new skill, our expenditures are frequently geared towards creating memorable experiences.
The common denominator among these goods and services is the power to create experiences. Over the last decade, many industries have adapted to this trend of focusing on experiential products. For instance, commercial retail real estate developers have been constructing open-air malls with extensive outdoor spaces, moving away from traditional American indoor shopping centers with a Wetzel’s Pretzel on the ground level. Product retailers like Apple and Tesla have heavily invested in immersive marketing strategies, allowing potential customers to cultivate a sense of ownership before making a purchase. Nail salons, for instance, offer complimentary champagne and provide shoulder massages, all of which enhance the experience.
Why do businesses create experiences beyond merely selling their core products or services?
I still remember the way I gasped when visited the Glossier’s flagship store on Melrose. Aside from the grand display of all of their products with testing samples, the 17ft replica of their iconic brow gel, marble amphitheater seating around a fountain, and James Turrell style ceiling cutout made me feel as though I had stepped into Alice's Wonderland.
Business marketing and psychology have become an intertwined discipline over the years. I recall a powerful phrase that has stuck with me: “We as humans have poor memories; we may forget what someone said or how they acted, but we will never forget how they made us feel.” This notion perfectly encapsulates why businesses have been adopting experiential marketing techniques. Rather than merely convincing customers to purchase a product, businesses endeavor to offer a taste of ownership. While you are standing in their establishments, they strive to make you feel beautiful, important, powerful, and relaxed—boosting serotonin and dopamine levels and fostering a euphoric association with their brand.
The other priming factor for the future growth in experiential products
Another contributing factor to the future growth of experiential products lies in our complicated relationship with technology over the past decade, which has sparked a spiritual awakening regarding “what it means to be human.”
Many people are recognizing that life can feel disengaging when we're constantly immersed in a digital world. We feel most alive when we are present in our reality and open ourselves to genuine emotions. With this principle in mind, the mass adoption of AI could offer more benefits than drawbacks, significantly boosting productivity and allowing us more time for leisure and meaningful experience.
While many people harbor negative views about AI development, fearing it will take away jobs and opportunities, I do not fully align with this perspective. Reflecting on the Industrial Revolution, when machinery replaced many manual labor tasks, our society significantly increased production efficiency while freeing up resources for technological and pharmaceutical advancements. This shift created a standard 9-to-5 workday, enabling us to enjoy increased leisure. Similarly, the advent of the Internet has significantly improved our quality of life, and I believe AI is going to create a comparable narrative—boosting productivity while allowing us to focus on critical aspects of human wellbeing. Certainly, governance and regulatory structures are essential to ensure this vision comes to fruition, but I also maintain a level of trust in a free market resting on ethical and moral foundations.
The following experiential industries are likely to see an infusion of capital in the coming decades:
Hospitality and Tourism: As the Baby Boomer generation retires, they will likely spend their accumulated wealth on travel and experiences.
Membership Clubs and Wellness Centers: Exclusive health clubs, such as Equinox and Heimat, will become increasingly prevalent. Furthermore, alternative fitness facilities like Pilates studios, yoga classes, boot camps, and running clubs that foster a sense of community will dominate the market over traditional gyms.
Senior Care Centers and Residencies: It is crucial for businesses in this sector to adopt all-in-one holistic strategies, offering hospice care, leisure activities, community engagement, and numerous other benefits in close proximity. The services provided should reflect modern lifestyle changes, emphasizing wellbeing and happiness.
