Experience Economy - Experian
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Experience Economy
There are a lot of assumptions and generalities (not all of them sympathetic) that are leveled at
Millennials. But there is one behavior in particular that is a conspicuous and defining characteristic for
Millennials; a preference for experiences over goods. There are numerous indicators that Milllennials
choose the way they spend their income to prefer experiences over ‘things’. This is not unique to just
the Millennial generation, as the trend appears to be influencing us all; but Millennials are more likely
to spend their available income on experiences to enhance their lives than material goods.
The impact for business could be significant. This ‘Experience Economy’ presents numerous opportunities to reinvent,
revise and reform product offerings and marketing strategies. It is not possible to ignore the rise of social media platforms
from this phenomenon; and important to not ignore the impact a brand can have on a Milllenial’s social media feeds. This
revolution of consumer thinking presents a challenge for brands to rethink their strategies:
• How
can the ‘outlet’ be re- envisioned to be experience focused?
• How
do we get the balance right between frictionless online commerce and
meaningful, ‘selfie’ worthy experiences?
• Is our service the stage and the product our props?
• How
can we leverage new technology to provide a better consumer experience?
Many of these challenges may only be appropriate to certain segments of the customer base. This increases the business
importance of accurately profiling your customer base. Understanding your customer base and exactly how important the
Experience Economy is to your business will be fundamental to any decision to develop solutions to meet these needs.
Experian has identified three main segments of the population who are active contributors to this “Experience Economy”.
Experience Economy Rent-the-Runway 4.1% of New Zealand population These are young singles, studying or just starting out in their career, living in urban apartments. Discretionary spend is generally a foreign concept to them and they must make the most with what they have. “Rent-the-Runway” are your typical Millennials, aged between 18 and 34 years, most of which have not known a world without the internet and have grown up sharing their lives online through social media platforms. Due to their very public profiles, it’s important for “Rent-the-Runway” to ensure their followers can see what exciting lives they lead and will accept nothing less than a life of adventure and fun with the illusion of status. Unfortunately, this group doesn’t quite have the paycheck to match their extravagant lifestyles and pay the bills, so will generally choose not to spend their hard-earned cash on material things, unless of course they enhance their image; such as the latest tech or designer outfit, in which case hire purchases are an affordable alternative. Brunch Before Banks 11.8% of New Zealand population “Brunch Before Banks” are your fashion focused, socially and technologically astute younger singles and families, renting modern properties in the major cities. “Brunch Before Banks” are generally aged between 30 and 49 years, becoming more and more financially established and are now starting to reap the rewards of their hard work. Status matters for this group, so higher than average incomes and lavish lifestyles have set them up for success. However, as their family grows so do their expenses therefore most of this group are still renting their properties with the plan to settle down with mortgages on the horizon. But who needs a mortgage when you can rent a modern three-bedroom house in the well-regarded city fringe suburbs and still afford that Audi Q5? Dinners & Décor 4.9% of New Zealand population Aged between 40 and 54 years, “Dinners & Décor” have set themselves up to benefit from the best of both worlds. It’s not a choice of experiences “OR” things, it’s experiences “AND” things, everything else in-between, at the same time. These are your most affluent, highly prosperous households comprising of finance savvy professionals and business owners, living in grand houses in desirable areas. Money is not a concern for this group, but time is of essence. Juggling work and family life leaves little time to visit the local pub, but that’s ok, “Dinners & Décor” prefer to spend their time with their family on day trips to the beach or a picnic or BBQ at the park. “Dinners & Décor” love to shop and love to dine, if you can combine the two, and create a truly ‘experiential’ retail environment that will save them time, even better!
Experience Economy
Whilst these three segments are similar in that they enjoy experiencing life and all it has to offer (and letting others know about it), they
differ greatly in terms of their age, lifestyle and what, as well as how much they are willing and able to sacrifice to live this life of leisure
and status. The timeline below highlights the types of items or ‘things’ each of these three segments are more willing to spend their
money on versus what they choose to experience out of life and how this changes as they pass through the differing life-stages.
Household Picnics BBqs Arts & crafts
income Family day trips Gardening Read book
Visit friends/relatives Read a book Board games
$100K + Dinner party Walking Play cards
Experiences Coffee/brunch Entertaining friends Work functions
Restaurants Beach Weekends away
Family National Park
Friends Sporting events
Domestic &
Fitness class Sporting events international travel
Yoga/meditation Picnics Movies
Pubs & Bars Dinner party Play sport Dinners & Décor
Coffee Fishing
Restaurants Work functions
Family Weekends away
Music
Domestic &
international travel
TV Streaming Arts & crafts Brunch
$70K + Nightclubs Photography
Pubs & Bars
Friends
Home
Music Brunch Before Banks
Investment property
International travel
Stocks/shares
Domestic travel
Revolving credit
Free concerts at
beach/park Laptop/desktio
Live music concerts Smart TV
Zoo Tablet
Theme parks Clothing
Café Furniture & homeware
Kiwi saver Tablet Trust funds
Revolving credit Smart watch Holiday home
Boat
Rent-the-Runway Laptop/Desktop Hire purchases
Games console Home decorating Clothing
$20-70K Kiwi saver Smartphone Stocks/shares
Personal loan Fitness tracker Cars
Smart TV Clothing Cheque account
Laptop/Desktop Hire purchases Credit cards Things
18-34 30-49 40-54
Age
Source: Nielsen, Consumer & Media Insights, August 2016 – July 2017
*Mosaic is a geo-population household based modeled product and while Experian takes reasonable care in compiling and modeling, due to the variety and availability of source data and modeled nature of the
product Experian cannot guarantee and makes no representation with respect to the accuracy of any individual profile. Mosaic should not be used for any credit decision or as the sole source of data relied on to
make any decision. Owing to the modeling and source data Experian cannot be liable for any decision made in reliance on Mosaic or insights derived from Mosaic.
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