At the end of World War II, the United States witnessed a significant increase in the consumption of goods and services. Gone were the days of destruction and bloodshed, and Americans were focused instead on things like buying a home in suburbia and driving a new car – and they had the disposable income to do it.
Today, the trend is in reverse. Led by a generation of Millennials choosing experiences over things, Americans are opting out of accumulating consumer goods – even those that used to indicate status, like a home or a car – and changing their buying habits to focus on meaningful and unique experiences instead. As this trend has grown, many consumer brands are meeting demand by marketing experiences rather than possessions.
The Rise of the Experience Economy
According to a joint study conducted by Expedia and the Center for Generational Kinetics, 74 percent of Americans say they prioritize experiences over things. It’s no wonder, then, that the so-called sharing and experience economy has grown exponentially, with companies using services as a stage for the memorable experience they’re selling. For instance, more and more people are choosing to eschew traditional taxis in favor of ride-sharing services that allow them to meet new people. When we think of popular social activities today, things like escape rooms and distillery tours have replaced game nights at home and casual gatherings at local bars.
Social media, too, has increased our collective interest in experiences over things. Platforms like Instagram, which are photo and video-based, encourage users to post images of their unique experiences and share their adventures with others. Keeping up with the Joneses is no longer about the house with the white picket fence or climbing the corporate ladder – today’s consumers are chasing things like travel, cooking classes, and goat yoga instead.
Why Do We Prize Experiences Over Things?
Millennials have been changing the consumer landscape for years, but all generations are now trending toward placing more value on experiences. As many Baby Boomers enter retirement, for example, they are taking a “less is more” approach to life, placing enhanced value on relationships with family and friends instead of on possessions. Why is that? Well, studies show that spending our hard-earned money on experiences actually makes us happier. They bring more lasting joy, often because they can be shared with others in the moment, as well as offering shareability on social media. In short, experiences are a way to build community and to deepen relationships.
Savvy companies are cashing in on the feel-good nature of the experience economy with new offerings, too. Airbnb now offers an Experiences service that lets you immerse yourself into local life as a traveler, rather than simply seeing typical tourist traps. Capital One Cafes have revolutionized the banking experience by offering a space to grab your favorite coffee, work on your laptop or meet with friends while you take care of your banking needs. Even shopping malls are changing the way they do business, making shopping more experiential and less about products. For example, brands like Casper and T-Mobile are creating showrooms that offer a chance to experience a product and make a memory, with buying something becoming a secondary activity.
What Does all of This Mean?
With so many American consumers focused on purposeful experiences and relationships instead of the consumerism that characterized the country’s spending habits post-WWII, it’s likely that this trend away from possessions isn’t going away anytime soon. The economy is continuing to transform to meet the needs of an experienced-based market, and many people are changing the way they spend their money.
Whether you’ve already noticed a change in your own spending habits or you’re just beginning to come around to the idea that less is more, it’s always a good idea to periodically take stock of how you’re spending your resources and ensure your purchases are supporting your values.
