Why Experiences are the New Luxury
I was on a bus to Istanbul and in a bad mood.
I was on a bus to Istanbul and in a bad mood.
I’d been driving from Bulgaria to Turkey, only to be turned away at the border. Turns out my rental car wasn’t registered outside the EU. Somehow I was able to ditch the rental car and hop on the last bus to Istanbul.
The bus was cramped with no air conditioning. I wondered if I’d get to my hotel before sunrise.
Then I started talking with fellow passengers. The attendant came around to offer tea, lemon kolonya, pretzels and Pop Kek (mini cream-filled cupcakes). I learned about Turkish culture and cuisine. The bus ride ended up being a highlight of my trip.
Not long ago, buying a Ferrari was the ultimate status symbol for young professionals. Now it’s going to Coachella, white-water rafting in Colorado, or hiking glaciers in Iceland — and sharing pictures of it all on social media.
The trend is clear: Millennials prefer to spend more money on experiences than on material things like cars, TVs and watches.
I reflected on this at a panel on “experiential marketing” with Elizabeth Canon, founder of FC Tech Group, and Gilad Goren, founder of Travel+SocialGood.
For Millennials, wealth is a less important measure of success compared to previous generations, said Elizabeth. They crave lives with meaning and purpose.
This thirst for experiences can be seen as reaching higher on Maslow’s hierarchy of needs — moving beyond basic needs like food and shelter, toward feelings of belonging and self-actualization.
Millennials “wear their experiences as badges”, sharing travel pics on Instagram and always seeking out new adventures.
Elizabeth outlined the underlying trends:
· Non-ownership & minimalism. More young people are living in small urban apartments and embracing a minimalist lifestyle. The rise of on-demand services makes it easier to get by without owning a car or TV.
· Self-actualization & self-improvement. Millennials spend $300 a month on self-improvement — twice as much as the previous generation. Last year 94% of millennials reported making personal improvement commitments.
· Thirst for freedom & flexibility. Young people don’t want to be tied down to traditional 9-to-5 jobs. And increasingly, they don’t have to. The overwhelming majority (94%) of new jobs created in the past 10 years are freelance jobs. An emerging class of workers live as “digital nomads”, traveling the world doing freelance jobs remotely.
· Appetite for change / newness. Millennials expect to have multiple careers over their lifetime. They have unprecedented freedom to change jobs and locations and pursue adventures between gigs.
· Self-gifting. As Aziz Ansari might say, “Treat yo’ self!” Young shoppers are more likely to buy things for themselves while picking out gifts for friends and family. They work hard and feel like they’ve earned a reward.
· Efficiency. Young people want to maximize their free time. They’re willing to pay a premium for time-saving services like Seamless and Uber, especially in fast-paced cities like New York, LA, and San Francisco.
What are the implications for brands & marketers?
Tell stories that create an emotional experience
It’s well known in marketing that people don’t always remember the words you use to communicate with them— But they’ll remember how you made them feel.
A product or service is powerful when it connects us to an idea, or a community, or helps us understand ourselves.
Companies like CrossFit, SoulCycle and DayBreaker are differentiating themselves by offering a sense of meaning and community.
Brands like Charity Water are finding new ways to engage Millennials’ altruism. Only 1% of Americans volunteer when they travel, said Gilad Goren. But young people increasingly seek purpose when traveling. The most fulfilling travel experiences are those that include purpose and storytelling.
Successful companies of tomorrow will be those that deliver the most personal, transformative experiences. The kind that make people say “This brand understands me”, or “This place helped me see myself in a new way.”
What is your brand doing to create unique customer experiences?