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COVID-19 and the Rise of the New Experience Economy by Gurleen Kaur, Chanpreet KaurAbstract This article aims to highlight the new experience economy upsurge amidst the coronavirus disease 2019 (COVID-19) outbreak. Undoubtedly, businesses will not be the same post the COVID-19 era, as it brings with itself both a threat and a cautious optimism as far as market offerings are concerned. Making a real difference to the landscape of experiences, therefore, requires a revisit. A ‘Needs-based, Action-oriented and Affiliation-centric’ strategy mix is proposed to be the central plank of any survival design during and after the COVID-19 pandemic. Further, based on the experience economy framework, we present a toolkit that the businesses can use as a blueprint for revival in the long term. The article suggests that the pandemic is here to teach the lesson of building experiences that are robust enough to survive the plunges in the market, personalized enough to retain loyalties, cohesive enough to not get diluted with a change in channel of offering and dramatic enough to keep the engagement alive at all times. Seen in this light, this article is first-of-its-kind attempt to chronicle the potency of the new experience economy measures in navigating through the COVID-19-induced business crisis and envisioning it as a framework pushing for a frugal approach.
IntroductionBack in 1998, Pine and Gilmore defined experiences as real and distinct offerings. The experience economy (EE) framework, as postulated, revolves around the inherent attribute of the experiences to be personal and residing in the minds of the individuals. The framework envisaged an exemplar shift from delivery dedicated service economy to experience-centred memorable consumption of commodities. The framework spells out four realms of experience—Education, Entertainment, Escapism and Esthetics—popularly known as the 4 Es.
With the coronavirus disease 2019 (henceforth, COVID-19) engulfing the globe, making a real difference to the landscape of experiences requires a revisit. The way global events and scenarios have shaped in the past couple of months has been incredible. The times are almost as strange as the virus itself. Travel around the world has been halted, most of the countries are facing lockdowns, hospital beds are in shortage and store shelves are getting emptied faster than the COVID-19 updates.
Countries across the globe are at variegated stages of the said pandemic. For instance, China, after a rigorous lockdown, is reopening its economy with a series of calculated moves; parts of Italy, India and the UK are still observing stringent measures of lockdown; and each state in the USA has its own protocols of observing the distancing measures (Al Jazeera, 2020). Understanding their unique manoeuvres to combat and shield their economies during and after this catastrophe will provide a holistic perspective and serve as a template for other countries to (not) follow.The rest of the article is organized as follows. The second section outlines the concept of EE from the standpoint of literature. The third section describes how market offerings are shaped now and what is happening to the experience economy (EE), given the spate of COVID-19 transmissions. The fourth section highlights the insights EE offers to reinvent businesses in the wake of the COVID-19 pandemic and the ensuing segment contours the managerial implications of embracing the new EE attributes. Lastly, the final section spells out concluding remarks based on the factual findings. （COVID-19 and the Rise of the New Experience Economy by Gurleen Kaur & Chanpreet Kaur. First Published September 29, 2020 in https://doi.org/10.1177/2319714520958575）
The EE has been crafted into four sub-segments (see Figure 1) based on the scales of customer participation and the environmental build-up. Educational experience helps in stimulating the curiosity of the visitors, increases their knowledge and enables them to share their experiences with family and friends. The next ubiquitous realm of experience embedded in the business environment is entertainment (Pine & Gilmore, 1999). This experience involves observing activities or performance of others. Escapism, on the other hand, necessitates that the visitors affect actual performances in the real or virtual setting (Oh et al., 2007). This experiential domain lets them imagine living in a different time and place, sometimes avoiding interaction with others in the process, which enables them to get away from reality, boredom and stressful lives. Lastly, the events that enrich and sooth sensory occurrences and are not affected by the participation of the visitors are aesthetic in nature. Such aesthetic experiences empower visitors to feel a sense of harmony with their senses, get closer to pleasing surroundings and even get to appreciate diversity.
Figure 1. The Four Experiential Domains of Experience Economy Source: Pine and Gilmore (1998).
（Con't）Nearly two decades later, in 2019, Pine and Gilmore made irrefutable extensions to the same theory by describing in detail the core characteristics for creating and sustaining an experiential offering. The first one involves building a cohesive experience based on a theme and devising the complete offering, including the memorabilia around the same theme. Additionally, personalized experiences are more valued than one-size-fits-all approach. Furthermore, experiences that are robust will be able to withstand the test of time and customer acquisition and retention in the wake of fluctuating customer preferences. Interestingly, an experience gets elevated to the stage of being a transformation when it has life-altering impact on the customer.
The experience is like a journey. It is obvious each person wants a fulfilled journey. Pine (2020a) expounds how each organization can pass through five stages of interaction with any consumer. Enticing (pre-purchase marketing measures), entering (admission and affiliation gateways), engaging (the consumption of the experience), exiting (the signature moment) and extending (embedding the experience in a memory to increase its longevity). He advocates that each experience needs to be dramatized in a manner where all the pre-engagement stages are an uphill and built to the point of climax. The climax has to be the high point of the experience. The exit and extension strategies help in building associability and create memorability in the minds of the consumers. This approach proposes to present experiences like a dramatic theatrical performance and build it in strategies starting from enticing the customers till the exit from the doors of the experience provider.
Rise of The New Experience Economy Amidst COVID-19
Ever since the World Health Organization (WHO) officially declared COVID-19 as a pandemic, businesses all over the world have witnessed disruptions in terms of plunging demand, growing threat of closures, numerous event cancellations, proliferating digital activities and cogent work-from-home vigour. Undoubtedly, businesses will not be the same post the COVID-19 era, as it brings with itself both a threat and a cautious optimism as far as market offerings are concerned. This has a direct connect with certain experiences becoming more important than the others, strengthened due to the contagion.
Experiences are not a luxury but a necessity, thus, making consumers crave for experiences in all situations. This format puts experiential offerings at the centrepiece in the value proposition set-up. Interestingly, this set-up is spreading rapidly but, under ‘essentials only’ regime, the consumption patterns are being dictated by the trajectory of the pandemic. The budget constraints and social distancing are the two forces, which are pulling levers in either direction of every business in action. Following is an account of how COVID-19 is prompting the rise of a novel EE age in select business segments (see Figure 2).
The current scenario is indicative of the possibility that virtual EE maybe the next big thing. The video conferencing applications and digital games are thriving on this fundamental principle. While the digital platforms like Zoom, Slack and Microsoft’s Teams have made remote working and schooling more purposeful and feasible, the facets of experiences are also oscillating along the paradigm of connection. They have aided in establishing seamlessness in experiences of maintaining professional and personal relations. Being detached from the conventional brick and mortar campuses, the education sector is evoking and engaging all the participants by clutching onto the contemporary digital structure. With consumers having no access to immerse themselves in experiences such as going to Broadway or location-based live concerts, artists are resorting to more absorptive offerings like live shows being telecast on their personal social media handles or TV channels. The big names coming up are The Berlin Philharmonic, New York’s Metropolitan Opera and 100 Hours 100 Stars, among others. Obviously, such a model is not sustainable, but it does help in bringing robust and dramatic experiences at the disposal of customers. An interesting observation is the fact that numerous passive experience providers are resorting to innovation in keeping the engagement alive. The increased circulation of e-books, e-magazines and e-newspapers are striving on the same phenomenon. E-commerce service delivery by Bigbasket, Amazon, Zomato etc., have enabled consumers to get the products they desire, while still adhering to social distancing norms. Dunzo has tied up with Cipla and Britannia to deliver products to people’s doorsteps directly from these companies’ warehouses, thus, eliminating the middlemen. At the face of it, this brings us back from the theme-based experiences as outlined in the second section to commodification. However, in the background of the pandemic, building memorability in the minds of consumers has become synonymous with the arrangement of providing commodities at the doorstep. In the transport space, both Ola and Uber have started providing cars for emergency services. The feature Uber Medic ensures that the listed cars have ‘roof-to-floor plastic sheeting’, acting as a barrier between the passenger and the driver. During the normal course of business, many ‘time-well-saved’ strategies specific to service companies never qualified for being tagged as worthy of offering distinctive experience (Pine, 2018). Albeit, now, how people get timely access to need-based commodities turns out to have a direct bearing on their level of memorability. The new EE proffers the businesses to build long-term customer experience with theme-based memorabilia.
Hassled Hospitality——The unprecedented disruption, owing to the spread of coronavirus pandemic around the world, has brought the worldwide hospitality industry to an unexpected halt. The global hospitality industry broadly encompasses segments on travel and tourism, food and beverages (F&B) and lodging and recreation. With all the travel seeming like a dream more than a reality, the airlines are offering vouchers in lieu of returning the sold ticket amount to travellers with a view of keeping cash flows in their hand. The strategy, signifying optimism, is a part of their revival plan, as the travellers will eventually fly with the same airlines. To encourage adherence to social distancing and building on providing theme-based experiences, the F&B industry is offering emended experiences with participation levels rotated 180 degrees. For instance, Burger King is openly spilling the ingredients of the famous ‘Whopper’ all over its social media to ensure consumers get a taste of the same experience in the confines of their safe homes. On similar lines, East London Brewery Co Ltd, Signature Brew (The Drum, 2020) is launching ‘The Pub in a Box’ kit, which contains beer mats, beer glasses, a vinyl record, a playlist, a pub quiz and pub refreshments for individuals to re-create the pub experience at home.
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