An Experience Economy: Changes in Buying Behaviour

Gift experience

Steve Marritt, Country Manager UK/IE, Groupon, explores the shift towards the gifting of an experience, as shoppers strive for something new. 

Stuffocation’ is a term commonly used to describe the feeling of being overwhelmed and weighed down by the accumulation of material objects. With the relentless development and innovation of products, consumers are becoming burdened by this overconsumption and starting to consider swapping products for meaningful experiences. Exploring this trend in more detail, Groupon surveyed 2,000 UK shoppers on their spending habits in the lead up to Christmas, and their attitudes towards gifting – and receiving – an experience.

An experience can be of extraordinary value to individuals and can help strengthen relationships between people, creating memories that last much longer than what’s often offered by a product. Interestingly, it’s younger shoppers who put greater value on gifting an experience rather than the more traditional physical gifts. According to the research, gifting an experience is four times more popular amongst Generation Z (14%) and Millennials (18%) compared to Baby Boomers (4%).

This trend may be down to the rise of social media platforms – a growing number of consumers say they share what they receive on social media and these experiences give the recipient something unique to post over the festive season. The fact that more shoppers are considering alternative gifts, has also been linked to consumers becoming more eco-conscious. Shoppers are more mindful of what products they’re purchasing, where it’s coming from and how this affects their carbon footprint.

The difference in behaviour suggests that whilst older shoppers are likely to continue gifting traditional presents, a growing number of younger shoppers are starting to explore other options. This has created a new opportunity for retailers who should start thinking about how they can tap into this new, and potentially lucrative revenue stream.

This shift towards what Forbes has called an ‘experience economy’ has caused rifts throughout the retail industry. With business owners continuing to navigate the challenging retail environment, it’s important to develop a strategy that responds to the change in buying behaviour and taps into what Millennial shoppers, in particular, are looking for. 

This may include enhanced in-store offerings, having multiple touchpoints for consumers to engage or share a unique or amazing experience. Retailers can also think about shopping events positioning the brand from ‘Retail’ to “Experiential Retail’ tapping into new and existing audiences, or adding experiences and events to their remit widening the net and capturing those looking to gift an experience. 

Although the trend in gifting an experience stems from younger shoppers, it’s important to try and appeal to other demographics too. Thinking about general buying behaviour over the festive period, the research revealed that Gen X shoppers (aged 40-54) spend £467 on Christmas presents, compared to just £194 spent by Gen Z shoppers (aged below 23). With older shoppers spending the most by some margin, the next challenge for business owners is communicating the experiences on offer and convincing this segment of the market on why it’s a superior option.

It is vital to develop experiences that resonate with customers. Deloitte’s recent survey of Millennials shows that travelling and seeing the world was at the top of the list of aspirations. Groupon are responding to the increased desire for such travel experiences and are in the process of expanding that part of their offering. They increased the number of trips away to European cities this Christmas and introduced a Mystery Getaway deal, which gave customers a chance to fly off to 29 different destinations.

Although Millennials are currently leading the charge, behaviour will inevitably change as shoppers age and the lines start to blur. Companies that are agile and can strike the right balance between product-led offering and experience are the ones that will succeed in the changing retail world.