The Experience Economy - Industry Trends, Audiences and Outlook Q1 2018 The Retail Disruptor Series: Virgin Experience Days
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The Retail Disruptor Series:
|
The Experience
Economy
Industry Trends, Audiences and Outlook
Q1 2018
www.hitwise.com GET IN TOUCH
At the start of 2017, Lord Wolfson, CEO of Next, stated there was a
“continuing trend towards spending on experiences [and] away from
things” - a generational shift driven by millennials.
Barclaycard also stated that “despite cutbacks elsewhere, the
experience economy proved a clear winner in 2017”, reporting a
10.2% increase in spending on entertainment.
Introduction
What is the “Experience For Lord Wolfson, the experience economy represented the rise in
Economy”? services replacing shop-level products. For Barclaycard, it had meant
the rise of leisure, such as dining out, growing faster than other
categories.
For the original authors of the term, the experience economy
represented an evolutionary shift from a service-led economy to one
of memorable events.
To these authors, memory has now become the product.
In this report, Hitwise has partnered with Virgin Experience Days, to
understand: what is the experience economy, what does it mean to
individuals and what is the outlook for the sector.
2
“We predict the experience economy will continue to grow at a
rapid rate, as the consumer shift towards doing things rather than
buying more stuff shows no sign of slowing down.
There are many contributing factors that will spur this growth. As
Industry Outlook experience consumers mature, all indications suggest people will
demand more control over their work-life balance.
What is in store for 2018?
The social media age will continue to impact the growth of the
experience economy as consumers share their experiences and
are exposed to more opportunities.
By Paul O’Brien
CEO of Virgin Experience Days New trends in the fast-moving food, lifestyle and spa categories
are driving volume and growth alongside the continued
popularity of the classic driving, flying and adventure
experiences. Consumers are looking for “out of the ordinary”
things to do, and to accomplish creative new skills.
We anticipate the creation of many new experience businesses
to meet this demand for new personal projects.”
3
What’s inside
Hitwise provides marketers with unique insights based on the
largest sample of internet behaviour and consumer attitudes —
revealing audiences, search terms, and traffic sources that they
need to get a competitive edge.
1. Industry Overview
Through Hitwise’s online platform, AudienceView™, marketers
can access powerful audience modelling and activation
technology to segment and target their prospective customers.
2. Experience Categories
3. The Audience Launched in 2001, Virgin Experience Days [VED] is the market
leader in gift experiences.
In line with the Virgin spirit of quality and innovation, Virgin
Experience Days offers consumers unique, personal and exciting
gift options. With a wide range of experiences from classics like
4. Takeaways & Methodology track days, flying lessons and spas, to new trends such as lifestyle
skills, Virgin Experience Days retails all the latest and greatest
experiences in one place via their website.
43
1.
Industry Overview
Searches for the “experience economy”
have risen by 58% in 2017 YoY.
In this chapter, we track the industry’s growth
and influences that have driven this rise.
5
The Experience Economy
Industry Visits by Q2-Q4
Industry Growth
2017 saw an acceleration in online traffic to
Experience Product or Experience Gift
Retailers.
+12%
Out of the top 20 players in the UK, visits grew
64.6 by 12% to 64.6 million, faster than the
million previous year of 2% YoY.
+2% This rise was also reflected in Virgin
57.6 Experience Days [VED]’s business
56.5 million
performance. The consumer business arm
million has grown by an incredible 140% over the
past four years.
How was the Experience
2015 2016 2017 Economy Industry built?
6
Click here for more info on our
methodology.
Source: Hitwise, Experience Economy Industry = 20 Experience Retail or Experience Gift
Retailers. Note the above chart includes Q2-Q4. 6
What
influences
us to buy External Influences
“experiences”?
What has happened over the year?
The External
Accomplishments Adventure & Novelty Influences
Bake Off: Searches for “cooking class” Top Gear: Searches for “supertruck”
Experiences change with what is in
spiked 51% the week after Season 8 shot by 138% after being featured on
“fashion”. This is where entertainment,
Episode 1 the show
publishing and media have a key influence.
Cookery: The popularity of TV programs Strictly Come Dancing: After Indoor The beside chart shows how hit TV
like the Bake Off, Come Dine with Me and Surfing was featured on an episode of
programs, such as The Great British Bake Off
Masterchef, have contributed to a 25% Strictly, VED saw an uplift of 6000% on
and Top Gear, have spurred searches for
YoY rise in VED sales of Cookery Classes this experience sales WoW
similar experiences.
Other programs, like The Blue Planet II, have
resulted in increased traffic to advocate
sites, like Change.org.
Life Detox Environmental Drive
Searches also translate in experience
purchases. After being featured on Strictly
Live more with less: Bestsellers, such as Blue Planet II: In the 4 weeks after its first Come Dancing, VED purchases for Indoor
“Art of Decluttering” and “The Joy of episode, visits to the Change.org and Surfing lessons shot up 6000% WoW.
Less”, have entered mainstream Marine Conservation Society rose 288%
literature and 169%, respectively
Searches for minimalism grew by 46% in This impact will continue to grow, with
2017 YoY, with “mindfulness” also the government pledging to get rid of
growing by 22% in 2017 YoY all plastic waste within 25 years
Source: Hitwise. 7
The Experience Economy
Industry Visits by Week (in millions)
Experience Economy Weekly Trend
peaks in November
5,000,000 & December
Like other retail verticals, experiences are
also inextricably linked to gifting around
Christmas.
4,000,000
Large jump in the This trend continues to grow - VED saw an
weeks up to Black Largest rise in uplift of 26% in Christmas sales YoY
Friday (22%) week before (November to December 2017).
3,000,000 Xmas (32%)
The industry’s peak occurred in the week
ending 16-Dec, rising by 11% to 4.3 million
2,000,000 visits in 2017. Traffic is also spreading out:
- Visits leading up to Black Friday grew by
22% (week ending 18-Nov).
1,000,000
- Visits in the week leading up to Christmas
also rose by 32% (week ending 23-Dec).
-
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2017/18 2016/17 2015/16
Source: Hitwise, Experience Economy Industry = 20 Experience Retail or Experience Gift Retailers. 8Key Searches Around the “Experiences”
Search Trend Weekly Search Share
What was this weekly rise driven by? Searches for
“experience gifts”
Whilst searches for “experience gifts” spike 3 weeks
peaked three weeks before Christmas, the before Xmas
largest increase was seen over Black
Friday week (week ending 25-Nov).
The last minute shopper burst can been
seen among people searching for
“e-vouchers” (+161% YoY in week before
Christmas) and “experiences for couples” 07-Oct 21-Oct 04-Nov 18-Nov 02-Dec 16-Dec 30-Dec
(+291% in the final week of the year).
"Experience Gift" "E Voucher" "Experience For Couples"
YoY % Change
+291%
300%
We are getting
So what? later with our
200% +161% shopping -
Searches for “experience searches for
Online activity and purchases to the gifts” spiked over Black Friday
experience economy industry are “Couples” and
100% “E-Voucher”
accelerating. +45%
surge final two
weeks of 2017
This is not just in the weeks before Christmas, 0%
but also the surrounding weeks, for different
types of searches and needs.
-100%
07-Oct 21-Oct 04-Nov 18-Nov 02-Dec 16-Dec 30-Dec
In the next chapter, we breakdown the
experience categories and activities that "Experience Gift" YoY "E Voucher" YoY "Experience for Couple" YoY
are driving growth.
Source: Hitwise, Search term variations. 92.
Experience
Categories
Experiences encapsulate many different
things. It can be a treat or detox from
everyday life. It can also be a new
adventure and once-in-a-lifetime event.
In this chapter, we look at the top-rising
categories and activities over peak period.
10Top Categories
Searches to Top Experience Players
Top Categories
What are people searching for, before going to
“Treat” experiences was
Category Search Share YoY % Change an experience product or gift retailer?
the largest category in
Q4 and continues to “Treats”, such as relaxing spas, restaurants and
grow in search share YoY afternoon tea, accounted for the largest share
Treat 29% 6%
of searches in Q4 2017 (29%).
Generic Search 21% 15% 2017 saw a shift to more adventure activities,
such as “Flying” (+14% YoY) and “Adrenaline
Sport” (+18% YoY). VED as well tracked a 55%
Driving 15% -31% uplift in adrenaline and adventure activities
Adventures, such as YoY.
Flying & Adrenaline, saw
Immersive Activity 12% 6% the largest YoY growth in The 15% YoY rise in “Generic searches”, such as
search share “experience for him/her”, points to a rising
awareness and inspiration for experience gifts.
Flying 9% 14%
Adrenaline Sport 8% 18%
Getaway / Tour 6% -13% VED also saw a 55%
increase in adrenaline How did we get category
/ adventure activities
over Christmas YoY *
results?
Click here for more info on our
methodology.
Source: Hitwise, 12 weeks to 30-Dec-2017 YoY. Filtering and categorisation of top 1000 terms to Experience Economy industry. *
Christmas: Nov – Dec 2017. 11Top Activities
Searches to Top Experience Players Top Activities
More traditional experience activities, such
as Spas, Afternoon Teas and Driving
Spas was by the far the Top 5 risers have all Experiences, topped the list, accounting for
largest searched-for activity, grown by over 90% in 38% of search share.
accounting for 18% share search share in Q4 YoY
Niche, novelty and adventure activities are
rapidly growing, from the quirky (such as VR
Experiences), to the adventurous (such as
Top Activities Top Risers New Activities Indoor Skydiving).
VED also saw a merging of trends, including:
Spa Gin Tasting VR Experience Getaways combined with a Twist (e.g.
Steam Railway visits) up 87% YoY, and
Driving Golfing Blacksmith Experience Attractions combined with Afternoon Tea
(e.g. Kew Gardens) up 16% YoY.
Afternoon Tea Zip Lining Harry Potter
Track Racing Photoshoot Scuba Diving
Balloon Ride Indoor Skydiving Horse Riding So what?
Experiences like fashion trends come and go –
Attractions combined VED purchases for stay on top of this through search term analysis.
with afternoon tea (like Indoor Skydiving were
Kew Gardens) for VED up by 109% over This type of data has multiple uses, from
were up 16% YoY Christmas YoY informing your content strategy (such as
content for people seeking experience gift
inspiration), to your product offering (including
tracking the latest novelty searches).
Source: Hitwise, 12 weeks to 30-Dec-2017 YoY. Filtering and categorisation of top 1000 terms to Experience Economy
industry. * Christmas: Nov – Dec 2017. 123.
The Audience
Over 4.3 million people visited an
Experience Retailer site in Q4 2017.
What do they look like?
In this chapter, we look at the
individuals buying experiences and
how they differ by activity and interests.
13The Experience Economy Audience
By Age Group
The
Experience Whilst the audience In terms of audience
Economy Audience over-indexes to
younger millennials
spread, 50% of the
audience is still 45 yo +
(+14% more likely)
The CEO of Next, Lord Wolfson, stated that the
shift from product to experience was largely 40% 120
driven by millennials sharing their life on social
media.
30% 114 110
According to Hitwise data, visitors to the
Experience Economy industry over-index for Audience
people aged 18-34 years old, compared to Spread Index
20% 102 100
the general online population.
98
But there is a sizeable chunk of this audience 96 95
who are still older – 50% of this audience are 10% 90
45 years old and above.
0% 80
18 - 24 25 - 34 35 - 44 45 - 54 55+
Percentage Index
Source: Hitwise, 12 rolling weeks to 30-Dec-2017. Audience = Visitors to Experience Economy Industry. Index compared to the standard online population. 14What does the Experience Economy
Audience Care About?
Their Motivations
Lifestyle Ethics
The experience economy audience also
spends a lot on retail products and
thoroughly enjoys it (including over £200 per
month on womenswear!).
“ I like taking risks
“ I am very knowledgeable
of Global Warming
I like challenges,
This drive comes from wanting to keep up novelty and change But I will pay for
with the latest fashion trends, as well as their environmentally friendly
desire for change and novelty. products only if they save
I’m happy with my me money
” ”
They also have high environmental standard of living
awareness, but are still stringent with their
spending on environmentally-friendly
products, only if it saves money.
Retail Spending Leisure Spending
“ I spend a lot on clothing
(£200+ / month on
“ I like to go to trendy places
to eat and drink
womenswear)
How did we get attitudinal I go to restaurants more
I keep up with the latest than once a week
statements? fashions
Click here for more info on our
methodology.
” ”
Source: Hitwise, 12 rolling weeks to 30-Dec-2017. Audience = Visitors to Experience Economy industry. Attributes over-index compared to the
standard online population. 15Audience by Type & Activity
Age Gender Household Income Attitude
Audience 18-24 yo
(14% more
Split
Male-
HI Sub
10K, 50K+
by Activity
likely) Female
All Audience
The experience economy audience
differs in demographics and attitudes, 18-24 yo
depending on activity. (34% more Female HI 50K+
likely)
For instance, people searching for Gifters
“experience gifts” (and variations of the
term), are younger, female with higher
household income, than the general
Even Knowledgeable of
experience audience. Female HI Sub
spread global warming and
ages 10K, 50K+ carbon footprint
By activity, Afternoon Tea seekers are
spread out across ages, Steam Train Afternoon Tea
seekers tend to be older with higher
incomes, “Indoor Skydiving” attracts a
higher proportion of males. Not that
55 yo + Female HI 50K- knowledgeable of
All three activities also have different 75K carbon footprint &
motivations when it comes to the global warming
environment. Steam Train
Split Take positive steps to
Male- HI Sub reduce the energy
18-34 yo 10K, 75K+ they use, to benefit
Female
the environment
Indoor Skydiving
Source: Hitwise, 12 rolling weeks to 30-Dec-2017. Audience = Visitors or searchers of activity. Attributes over-index compared to
the standard online population. 16Experience Activities Per Selected Region
Preferences by Scotland
Region
Yorkshire
- Photoshoot
- Gin Tasting - Driving
- Track Racing
There are also key differences when we look - Zip Wire
at experience activities by region.
The beside chart shows where different
searches originate from. London
Each region has a varied mix of traditional
experience, such as afternoon tea, spas and - Afternoon Tea East
driving, and top rising activities like - Golfing
- Photoshoot - Driving
photoshoots and indoor skydiving. - Golfing
- Indoor Skydiving
- Zorbing
So what? South West
The Experience Economy combines many - Spa South East
types of people with different demographics, - Air Balloon
regions and motivations. - Zorbing - Driving
- Golfing
It is absolutely critical to understand your - Indoor Skydiving
audience by activity and need (e.g. gifters). - Zorbing
This should be the starting point for any
audience targeting campaign or marketing
Highest Region Index (15% more likely)
initiative.
Lowest Region Index (34% less likely)
Source: Hitwise, 12 rolling weeks to 30-Dec-2017. Audience = Visitors or searchers of activity. Index compared to the standard online population. 174.
Takeaways &
Methodology
181. Online activity and sales growth show that the Experience Economy will
continue to rise, particularly over Christmas. This included a 12% increase in
online visits to the top 20 players in 2017 YoY; VED also saw a 26% sales uplift
over Christmas YoY.
2. In Q4, “Treats” was the top experience category in terms of search share,
but audiences are getting more imaginative. Hitwise and VED both
pointed to a rise in the quirky and adventurous, such as Indoor Skydiving
and Getaways with a Twist.
Top
3. Entertainment, publishing and media are key influences to new
Takeaways experiences. Online searches and purchases spike after hit TV programs,
such as Indoor Surfing after being featured on Strictly Come Dancing.
4. Over 4.3 million people visited an Experience Retailer site in Q4. Due to the
diversity of activities, this audience combines many types of people with
different demographics and interests, from different regions.
5. It is absolutely critical to then understand the experience audience by
activity (from luxury spas to escape rooms) and by need (“gift for”,
“experience for couples” and so on). This should be the starting point for
any customer acquisition effort or marketing initiative.
19Methodology
How did Hitwise develop the How does Hitwise get category How does Hitwise get
Experience Economy industry? results? attitudinal statements?
Hitwise has selected the top 20 Hitwise isolated the top 1000 search terms Hitwise has partnered with Kantar Media
businesses, based on the following going to the Experience Economy Industry, TGI to combine online and offline, at scale.
criteria: in the 12 rolling weeks to 30-Dec-2017 YoY.
TGI consumer data uses in-depth target
- Solely specialise in experience Search queries were then filtered and intelligence related to all domains of
activities, vouchers or gifts categorised into categories (such as product and lifestyle choice.
“Treats”) and activities (such as “afternoon
- Gift retailers which offer experience tea”). By combining Hitwise’s online behaviour
days and vouchers as a key product with over 18,000 TGI market research
category By comparing results YoY, Hitwise identified variables, we can delve into the “why”
top categories/activities, top-risers based behind consumer decisions.
- Businesses that were in operation on relative difference and new activities in
from 2015 to 2017 2017.
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