Experience economy is usually associated with millennials and the shift in spending habits. One of the experiences they(we) are most likely to engage into are live events. Multi-day festivals, for example, have become a kind of rite of passage for many.
Music, fun, experiences and often long-term connections with peers are all desirable. As such, there is no surprise that half of the 32 million people that attend festivals in the US are millennials.
So what drives change?
Let’s start with a short intro to technology and, most important, connectivity technology. It won’t take long. You are probably aware that computers have evolved constantly from the 1970’s. Flash news number two: they have now become both powerful and cheap enough to help empower people from all geographical and social backgrounds. A report from the White House shows that millennials have been shaped by the ubiquity of technology. Yup, tech is in their DNA.
Connectivity technology was surprisingly influential. Both mobile phones and social media have been used by teens in the previous decade to stay connected, exchange information and share moments with their peers.
This led to what is now called “Fear of Missing Out” (FOMO). As they are more and more connected on social media outlets and share important moments in their lives, the need for “being there” has increased. Also, over half of millennials report that people ask them for purchase opinions and they influence four to five friends and family.
So there is an increase in millennial influence and an increase in the number of people that want to be influenced by them. As a result, social gatherings such as live events have become the norm. Groups must attend or they fear missing out on potentially important social interactions.
Experiences rather than goods
The common knowledge is that millennials favor experience over goods. And they seem to do just that. But that does not mean that they are not spending. Actually, attendance and revenue from festivals have skyrocketed:
Burning Man has become a globally followed event. In 2014 more than 65 000 attended the event.
Coachella sold over 198 000 tickets in 2015 and raked in more than $84 million. One of the hottest things the festival has pushed forward was the live streaming, now at 28 million views, a way for millennials to stay connected, even if they are not there.
And that’s not all — an increase in festival attendance has taken the world by storm. A long list of awesome festivals show how millennials now acquire experiences.
It’s not just festivals, either. It’s concerts, movies and even pay TV. 83 million millennials will spend $750 a year to purchase experiences, as a Deloitte reports. That’s $62 billion changing the world, spent by people who crave for experiences.
How does the experience economy change the world?
A change in purchase options for millennials is a huge thing for the global economy and as a result, society at large.
By spending more on experiences, by joining large groups, by accepting diversity and seeking it, the millennials are making the world a more connected place, smaller and less prejudice prone.
Goods as commodity and self-defining experiences
As the manufacturing of goods has been streamlined, automated and increasingly effective, goods have become accessible. A computer or flat screen TV used to cost a small fortune to own. Now they are both accessible to many so they have lost their social status symbol.
Even big ticket possessions such as cars or houses will soon lose their appeal as the world perspective shifts from owning to accessing.
So goods become commodities. They are accessible and lose their appeal to the masses of millennials that will soon become the dominant spending force in the global economy.
Brands will have to face the truth sooner or later. The marketing added value will soon fade and products will be just as desired as their manufacturers are socially responsible, as millennials demand. Even now, emerging brands such as Warby Parker or Bonobos emphasize their positive impact on the society catering to their target market’s values.
Experiences will become defining for individuals’ character. And large scale events, attended in foreign cities, countries or even continents, will build global citizens. Millennials will grow up with a global perspective rather than a local one. This will improve international relations because we already know that people that trade together don’t fight one another. We’re finding out that people that have fun together may care for one another.
New financial and payment systems
Credit cards have long become mainstream but are now increasingly less appealing to new generations.
Festivals have started to experience with new access and payment tokens, such as RFID wristbands that double as entry tickets and payment devices within the events’ areas.
Who says these new payment and financial systems cannot step outside the festivals and replace old institutions, such as banks, and technologies, such as credit cards?
Decentralized entertainment experiences may breathe new life in the music industry
The music industry has become rigid and resistant to change. A few labels own a large deal of rights to music and artist’s creative abilities. With the rise of large independent events and an increase in popularity for indie artists that can connect directly to their fans, change will happen.
Even more — we may experience new types of art performances that so far have been hiding in underground concerts and small events. Burning Man is a great example. It went from one of the smallest festivals in the US to one of the most influential and large ones. It used to be the place where underground artists, hipsters and libertarians used to come hang out. It is now the place where tech titans meet and build new ventures.
And it’s not just music in the US. It is also tech, medical events and more. Brazil has seen a huge and steep increase in the number of business events. Eastern Europe, for example, has had a boom of tech events such as ICEEfest . Event management tools now help event organizers, small to mid to large, set up and handle their dream event.
The future will bring a more connected world, through the live events that millennials now experience. And I don’t mean connected as in digitally connected, because …
Something else will replace today’s “social media”
Social media as we now understand it is anything but social in terms of human emotional needs. If anything, it alienates individuals through over-inflated and weak relationships. The kind that we, as humans, feel good about on the short term but don’t rarely find real value in in the long term. The number of Facebook friends, the number of Instagram or Twitter followers may feel superficially satisfying but what we crave for are the real experiences.
The touch of a hand, the laughter, the warm feeling of finding someone you know you want to spend time with. These are all things Facebook cannot provide, no matter how many Oculus devices they ship.
Millennials want something that their parents and grand parents had and they have not received enough of. The digital empire brought about by tech companies as well as the very structure of our civilized world, with large cities and weak ties between people, is not satisfying.
By connecting in real life events, millennials are building a real “social world”, with the help of “social media”. They crave and they will have the strong ties that happen in the real world. They crave and they are building a new world where people are people, not just numbers on a Facebook profile. One live event at a time.