A look at this list of billion-dollar companies that didn’t exist 10 years ago reveals a couple of important things: these companies are all enabled by digital, and central to their offering is the idea of creating a great experience.
Today, Spotify can create personalized playlists based on listening behavior, and Instagram and Twitter suggest tweets and pictures for millions of users based on their likes. And following Netflix’s lead, Hulu and Amazon Prime now curate shows based on a deep understanding of user preferences and viewer behavior. This, in a nutshell, is the experience economy; and going by how eagerly players from incumbent industries such as banking and insurance have jumped on to the bandwagon, it is here to stay.
Consumers are prioritizing leisure and time with family and friends, and millennials are willing to spend more on experiences. So much so that customer experience is expected to overtake price and product as a key brand differentiator by 2020. By 2028, global expenditure on the experience economy is expected to reach $8.2 trillion, according to Euromonitor.