When faced with having to choose between spending your money on a product or an experience, what do you do? Do you go to a music festival with your friends or buy that pair of shoes that has been on your wishlist for months? Do you take that dream trip or do you invest in a statement furniture piece for your house?
Consumer habits have changed dramatically over the past three decades. A new consumer generation is investing in experiences rather than in products. Trips, festivals, outdoor activities, restaurant meals, cultural and artistic events are their activities of choice.
The Millennials: Fueling the experience economy study, conducted by the Harris Corporation, has found that people aged 18 to 34 prefer to invest their money in experiences that reflect their lifestyle and personality. The investigation has concluded that ‘to them, happiness does not relate to material possessions or career status. Leading a happy, meaningful life is all about creating, sharing and capturing memories that stem from experiences'.
According to the article, experience consumption has increased 70% since 1987.
© Yoga Class at Urban Outfitters and Linda Martini Concert at Primavera Sound 2016
While projects focusing in consumer experiences are growing in numbers, companies that focus on products are sustaining significant losses. Aware that consumer habits have changed, brands are adapting their space to their consumers’ lifestyle, offering activities that go far beyond their core business.
Macy’s, (which has shut down 40 stores earlier this year), for example, is setting up cafeterias and organising concerts and yoga lessons, as well as other activities related to their consumers’ interests. Besides all this, it is partnering with music festivals, such as Coachella, and designing special collections that take into consideration the atmosphere of the event and the average budget of its visitors.
The same is happening with brands such as H&M, Oysho and Urban Outfitters. Or, in Porto, with Daily Day, Marques Soares, Oficina Café Criativo, We Came From Space, and Coração Alecrim. The Feeting Room has news coming up.
© Atomic Weekend at We Came From Space and Primavera Sound 2016
On the other hand, companies such as Uber and Eventbriet, which focus on consumer experience and depend on positive feedback from their users, are increasing sales.
The proliferation of social networks is a key driver of this trend.
Instagram, Facebook and Snapchat are visual media highly oriented towards sharing what their users are experiencing in real time.
© Coração Alecrim, Lunch at Namban and Brunch at Oficina Café Criativo
Thomas Gilovich, a psychology professor at Cornell University who has been researching the relationship between money and satisfaction for over two decades states that ‘we buy things with the purpose of making ourselves happy, and we do. But only for a short while. New things are exciting at first, but then we adapt to them’ and ‘one of the enemies of happiness is adaptation’ he explains.
Gilovich’s research has shown that while consumer satisfaction with products they buy fades over time, satisfaction that comes from experiences tends to grow and to become part of our identity.
Porto’s growth as an important European destination is mainly motivated by the accessibility and diversity of social, urban, cultural and artistic experiences the city has to offer.
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