Adapting Your Business to the Experience Economy

Blog post author
Björn Ström
August 9, 2021

You have probably noticed that the last few years have brought with them an uptick in the number of experiential venues and services. Anything that describes events or experiences beyond the more traditional theme parks and theme restaurants counts — think cat cafes, board game lounges, and interactive art exhibits.

They are on the rise, and this shift in momentum has taken place in order to match the economic trend we are seeing today: The Experience Economy is growing. While the idea of the experience economy was first introduced over two decades ago, it is within the last few years that we have seen businesses outside the entertainment industry really begin to implement the idea of experiences into their business model in a meaningful way.

What is The Experience Economy?

The term experience economy was first coined by B. Joseph Pine II and James H. Gilmore in 1998 in an article published in the Harvard Business Review. The experience economy describes the emphasis on novel experiences — as opposed to just goods or standard services — that businesses offer when serving their customers.

According to Pine and Gilmore, “An experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event. Commodities are fungible, goods tangible, services intangible, and experiences memorable.”

Pine and Gilmore classify experiences into two categories: customer participation and connection. Below, we will break them down. 

Customer Participation

One way of framing experience is in terms of customer participation. If you imagine a spectrum, and on one end is passivity and the other end is in engagement, you can understand the way customer participation experiences work. More traditional entertainment falls right into the passive category: You sit quietly and watch an orchestra perform, for example, passively receiving the experience. 

As Pine and Gilmore explain, the opposite of the passive experience is the highly active experience — an activity that cannot even unfold without the customer’s important participation in shaping the event. The most active kind of experience might be something like snowboarding — customers pay for access to a facility in which they are mostly responsible for creating a meaningful experience.

Gilmore and Pine point out, however, that even audience members are not entirely passive. By changing the appearance and sound of a space and by offering the active customers feedback, passive audience members of an experience still influence the atmosphere. 


Connection describes a second way of understanding experience as it relates to economy. This understanding is more about how connected a customer feels to their environment and the peers that make up the experience. Again, imagine a spectrum, but this time, the two ends are what Gilmore and Pine call “Absorption” and “Immersion.”

If you are “absorbing” an experience, you are a little bit outside of it but learning from it. For example, if you are watching a baseball game from the stands, you are absorbing the game. Similarly, if you are listening to an author talk at the local library, you are absorbing what they have to say. 

Immersion, on the other hand, is what happens when you feel engulfed in an experience — completely a part of the sensory components that make up the experience. For example, when you stand over home base with a bat, you smell the sweat on the grip and feel the dust from the field in your nostrils — you are immersed and having a very different experience than that of the fan in the stands absorbing the game!

Even different mediums for the same experience can impact immersion. Consider, for example, how much more immersive it is to play video games with a virtual reality headset and surround sound than it is to play a game on the small screen and tiny speakers of your smartphone.

Having set up the two dimensions of experience — participation and connection —  Pine and Gilmore go on to explain that experiences can be sorted into four broad categories “according to where they fall along the spectra of the two dimensions.” The categories are as follows:

Entertainment = Absorption + Passive Participation (ex. watching tv, attending a concert)

  1. Educational = Absorption + Active Participation (ex. taking a ski lesson, attending a class)
  2. Escapist = Immersion + Active Participation (ex. acting in a play, hiking the Grand Canyon)
  3. Esthetic = Immersion + Passive Participation (ex. viewing the Grand Canyon, visiting an art gallery)


The Experience Economy and Branding 

So, how important is all of this if you’re a business owner? The big thing to understand is that as the experience economy grows, consumers will want more from brands than an agreement to receive goods and services in exchange for money; they want to experience some kind of interaction, and they want to feel seen.

Forbes author Daniel Newman sums it up nicely: “If you want to build brand affinity, give the people what they want. What they want, it turns out, is an experience—something memorable, something they can connect with, something that makes them feel like less of a checkbook and more of a participant.”

Experiences are generally associated with entertainment – movie theaters, bowling alleys, amusement parks, etc. Today, however, this concept is moving into alternative sectors — such as retail — and businesses seeking long-term success will have to consider how they can incorporate the 

experience economy into their platforms to accommodate the new consumer behaviors. 

To do this, businesses are turning to technology!

How Business Can Implement Retail Tech to Maximize their Success

Our reliance on technology is driving the experience economy today. It has caused individuals to redirect their attention from traditional shopping to digital experiences. As a result, retailers have lost business to eCommerce platforms and have struggled with how to get customers into their retail stores. They are now turning to new solutions to bring technology to their brick-and-mortar locations. 

Here are some solutions that offer a glimpse into technologies helping retailers remain relevant in the experience economy.

In-Store Interactive Maps

Interactive maps are a powerful self-service technology that helps customers feel more confident and comfortable navigating without relying on an employee for help. When customers can simply ask the map where to find the restroom or the closest coffee shop by using voice recognition technology, their experience is significantly improved.  When customers aren’t frustrated or unable to find the stores they’re looking for, everyone benefits. The experience is more pleasant for customers, but businesses also lose fewer potential sales this way. 

Ombori’s Wayfinder is one such solution. It provides a flexible interactive program that can be fitted to any size screen. To optimize use of Wayfinder, businesses can integrate it into their digital signage, such as following up an advertisement for a sale on shoes with a map to the relevant shop. 

Omnichannel Shopping

The idea of omnichannel shopping is simpler than it sounds. It means that the typical consumer relies on multiple platforms in their shopping process. They might research a product on their computer, come to the store, then use their phones to price shop or find a coupon. Businesses that harness that propensity gain the opportunity to expose customers to more products than they have in store and convert those exposures into increased sales. 

The Endless Aisle is Ombori’s answer to Omnichannel shopping. If a customer can’t find an item in-store, they can turn to the Endless Aisle, a kiosk which uses engaging touch screens and QR codes that connect customers to exactly what they're looking for and helps them order it for pickup or delivery to their home. Endless Aisle is robust and can also integrate interactive maps, payment systems, and promotional material, so no sale opportunity is lost. 

H&M Get’s Creative Partnering with Ombori on the Selfie Mirror

In partnering with H&M, Ombori introduced a compelling way to create a more novel experience for customers in the retail space: the Selfie Mirror. The Selfie Mirror is a piece of interactive technology that customers activate using their voices. Customers use the mirror to browse fashion recommendations or to take a selfie, which is superimposed on the cover of H&M Magazine. Customers can then download and share that image on social media — the Selfie Mirror is fully integrated with popular social media apps. 

When customers post the image online, it acts as free marketing for H&M, and it creates an engaging, unique experience that customers will forever associate with the brand. 

The Experience Economy: Bottom Line

This is a new era of retail economics in which consumers have high expectations of brands. Not only do they look for convenient, customer-centric practices, but they look for novelty and a sense of shared experience.

Businesses that leverage the incredible technology solutions like Ombori’s Selfie Mirror, Wayfinder, and Endless Aisle will have a substantial edge in the evolving marketplace. These aren’t tools that retailers can afford to ignore; they are necessary tools in the repertoire of any successful business competing in the experience economy. 

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