Experience economy steams ahead as retailers pick up game
In a new report on the experience economy, National Australia Bank asked more than 2000 Australians about their experiences with a range of businesses, finding that travel and entertainment is outperforming retail in most instances on a 0-100 scale.
The highest rated net positive experience Australians reported having in the last year was at restaurants, followed by movies and domestic/overseas holidays – all of which scored in the high 70s.
The top performers in retail were discount department stores, major supermarkets and discount chemists, although the top retail scores rated in the low 60s.
While the shift towards the experience economy is nothing new, NAB’s data reveals the extent to which social media is driving the trend, finding that consumers are much more likely to share experiences or events with their friends online than things they’ve bought.
On a 1-10 scale assessing the extent to which respondents shared online, experiences/events scored a 3.7, while ‘things’ scored a 2.8. Among those aged 18-29 experiences/events rated 4.9 while ‘things’ rated 3.7.
“Social media is supporting this shift towards experiences as more consumers share their lives on Facebook, Instagram, Twitter and Snapchat. Moreover, posting pictures of something we’ve bought is often deemed to be more distasteful and less exciting than posting pictures of something we’re doing,” NAB’s head of economics, Dean Pearson, said.
The results were surprising among retailers, finding that every-day price focused traders like Kmart, Big W, Coles, Woolworths and Chemist Warehouse are delivering better experiences at a category level than clothing chain stores and online marketplaces.
Discount department stores, major supermarket chains, discount chemists, discount supermarkets and online marketplaces all delivered comparable or better results than festivals, live concerts, sporting events, live theatres, international sporting events and amusement parks.
“Businesses that are focusing on delivering a truly great customer experience are really reaping the rewards from this gradual change in what people spend their money on,” Pearson said.
Although among online only players marketplaces such as Amazon and Ebay were the clear winners.
NAB also tracked how often consumers have visited stores of varying categories, finding that over 90 per cent of shoppers have visited discount department stores (94 per cent) or supermarkets (99 per cent) in the last year.
For discretionary categories like sports stores, six-in-ten respondents reported visiting, lower than the seven-in-ten who said they’d gone to an online marketplace in the last twelve months.
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