Graphics Reference
In-Depth Information
The experience economy
In their book
The Experience Economy,
authors Joseph Pine and James Gilmore
predict that a company's competitive advantage will be increasingly based
on the intensity of customer experience. Pine and Gilmore explain that the
economy has evolved several times already, from an agrarian economy, to an
industrial economy, to today's service economy.
2
In Pine and Gilmore's experience economy, a product's value falls somewhere
into a continuum of intensity of experience.
Commodity products
—generic and
soul-less goods—are the least valuable to consumers. To a consumer, a com-
modity product is boring but necessary, as ubiquitous and unexceptional as
tap water. Dish detergent. A doormat. Dull as they may be, consumers need
essential commodity products but likely won't pay a premium for them.
What Pine and Gilmore call “goods,” or unique and distinct products, offer
consumers more appeal. Goods would be your favorite brand of running shoe
or model of high tech bicycle. Above goods are service products. Consumers
value services products that provide a tangible outcome such as a tax prepara-
tion service or a good haircut.
Pine and Gilmore's continuum explains the strong appeal of products and
technologies that enable DIY innovation. In their hierarchy, the products at the
top of the value ladder will be products that offer a consumer an experience,
and best of all, transformation. An experience product provides a feeling, like a
movie night or a spa treatment. Transformation products change the customer in
a deep way, producing a beneit with a positive long-term impact: for example a
college degree, a few months at summer camp, or the acquisition of a new skill.
In an experience economy, successful companies with the best proit mar-
gins will be those that sell their customers products or goods that offer an
experience or transformation. Both experience and the feeling of transforma-
tion are compelling and memorable. Consumers pay a premium for such things
and will come back again and again.
DIY innovation offers a rich set of experiences, of transformation, providing
its practitioners with a sense of community, the opportunity to acquire new
hard-won skills, the satisfaction of designing and manufacturing something.
3D printing technologies enable us to transcend the mundane, to break out
of the realm of commodity products and dull experiences. Several of today's
leading companies that sell 3D printers or related services tap into a consumer
need for intense, memorable, and transformative experiences.
