Experience Economy

The experience economy is a business model in which companies sell memorable experiences to customers rather than plain goods or services, treating the customer's memory of an event as the product itself. The term was introduced in 1998 by B. Joseph Pine II and James H. Gilmore, who argued it represented the next stage of economic development after agrarian, industrial and service economies. Pine and Gilmore's central claim is that a business can go even further than selling an experience by charging for transformation, the lasting personal benefit a customer takes away from time spent with a company, such as an educational program valued for the personal growth of its students rather than simply the hours of instruction delivered. Earlier writers had already noticed related trends: Alvin and Heidi Toffler's 1970 book Future Shock discussed emerging experience industries and a psychologization of the economy, sociologist Gerhard Schulze described the same shift in Germany in 1992 as an Experience Society, and futurist Rolf Jensen predicted in 1996 that what people buy would increasingly be stories, legends, emotion and lifestyle rather than objects. The framework has since been applied well beyond individual businesses, shaping thinking in tourism and architecture and underpinning modern customer experience management, on the view that consumers increasingly seek emotional and psychological satisfaction from curated experiences rather than from commodities alone.