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The New York Times published an article on February 21, 2021, entitled “The Boredom Economy.” The article discussed how the pandemic is changing consumers’ purchasing behaviors. The authors argue the pandemic has created an economy of bored consumers. The report states the pandemic is tedious, and that tedium is shaping how people spend money. So, how do we design products for bored consumers trapped in their homes? The secret lies in creating compelling or, better yet, meaningful experiences.
In previous articles, I explored the barriers and obstacles new products and services face in their attempt to gain market share. In the article entitled “How to increase your chances of developing successful products,” I wrote about how understanding the jobs that customers hire our products and services for will increase our chances of designing successful products. In the article entitled “Mapping Jobs to Be Done To Create Successful Innovations,” I explored how we can map out the jobs customers are trying to get done. Thus, giving us a better chance of discovering breakthrough products and services. This article will discuss how we can adapt to the changing consumer behavior due to the coronavirus pandemic.
I haven’t written much lately about designing products and services because of the pandemic. We are just beginning to see how consumers’ purchasing behavior is shifting due to these unprecedented times. These behavioral shifts can help us understand our customers and design products that they will adopt, and build companies that will thrive.
This shift is toward the Experience Economy, and the business world has been shifting toward offering new experiences for some time. An example of this is Starbucks. They took commoditized goods and turned them into a meaningful experience. However, due to the pandemic, consumers will emerge yearning for a myriad of new experiences.
The Bored Economy
The coronavirus pandemic has limited our social engagements, leisure activities, and travel. These limited activities have forced many of us to live a life without distractions from our daily monotony. Add to that the pandemic restrictions that prevent us from venturing out of the house for that much-needed break. “Because we are spending so much time in the home, we’re investing more in the home,” said Marshal Cohen, the chief retail analyst at the NPD Group, a market research company. “And the things that we’re investing in are things to keep ourselves busy,” said Erin Westgate, an assistant professor of psychology at the University of Florida, studies boredom. She added,
“Boredom is often a signal that something doesn’t feel meaningful.”
Not everyone is experiencing boredom during the pandemic. Essential workers, Healthcare Professionals, and stay-at-home parents forced to spend their entire day on Zoom calls with their children that cannot attend school in-person don’t have time for boredom.
However, according to the New York Times article, The National Pandemic Emotional Impact Report found that 53 percent of those surveyed said they were more bored during the pandemic than before.
“Feeling bored may result in different kinds of behaviors, like reward sensitivity,” Ms. Westgate said.
The New York Times article stated boredom could also increase risk-taking and impulsivity and makes people want to do something meaningful. This reaction to boredom can help explain the recent events related to the company GameStop.
After hedge funds bet on the game retailer, GameStop, to fail, a group of amateur investors used Reddit to encourage other investors to buy shares of its stock. The investors were able to prop up the company’s stock in the short term. These investments were risky, but the investors saw it as a protest against the large hedge funds. It became more than just an investment for these traders, and it became a meaningful experience.
After reading the New York Times article, it occurred to me that the Bored Economy is reflective of people looking for experiences -some ways to escape the monotony of our new norm of social distancing, quarantining, and restrictive activities. Even after the pandemic has ended, the desire for experiences will be a must for consumers; if we want to design new products, services and build a successful company, we have to think of our customers’ experiences and focus on making those experiences meaningful to them.
The Experience Economy
In the book, The Experience Economy, Joseph Pine II and James H. Gilmore argue companies now compete not only with the players in its industry, not only with those in its immediate geographic area, but with every other company in the world for the time, attention, and money of the consumer. To design successful products and services, we need to create experiences that make consumers want to give us their time and attention. If we can capture their time and attention, the consumer will be willing to provide us with their money.
Our economic offerings have progressed over the years to create value. We started with a commodities economy and primarily an agricultural one. Commodities are the raw materials that come from the natural world. They are sold in the market, creating the supply. When a company or individual purchases them, it creates the demand for that product. Agricultural commodities established the rural economy that sustained communities for years. In 1776, more than 90 percent of the US employed population worked on farms. By 2019, that number reduced to 1.3 percent of the US working population.
Then came the Industrial Revolution, where companies used commodities to create goods through the manufacturing process. The goods created made higher-valued products through product differentiation and customization. The manufacturing industry boomed not just in the US but globally as well.
As the wealth generated and products accumulated by the manufacturing sector continued to increase, so did the demand for services. In the US during the 1950s, more than 50 percent of the employed population were service workers.
Services providers use goods to perform an activity for customers. These activities add value to the goods because customers generally value the services’ benefit more than the good used to provide the services. Services complete tasks that customers want to be done but don’t want to do themselves. Goods supply the means to complete the services.
Services industries and their workers feel the same pressure that commoditization put on manufacturers to add services. Telephones, Airlines, and other service companies compete on price, creating a low-cost leader or a red ocean strategy. Connectivity created by the internet has allowed outsourcing services to countries with lower employment costs. Thus, allowing companies to charge lower fees for their services. It’s not just about providing the best service anymore. It’s about who can provide the lowest cost of service. This unwinnable strategy leads to an inevitable shift to a new economy, one where companies can create value and drive new revenue from their goods and services. This shift is towards the Experience Economy.
Goods and services are no longer enough to compete in the marketplace.
Experience offerings occur whenever a company intentionally uses services as the stage and goods as props to engage customers. And experiences have emerged to create new value for customers. Joseph Pine II and James H. Gilmore state commodities are fungible, goods tangible, and services intangible, experiences are memorable. Customers cut back on goods to spend more on services, and now they are beginning to weigh the time and money they spend on services to make room for more memorable experiences.
This change is evident from the spending patterns of consumers during the pandemic. The New York Times article sighted early in the pandemic; bread-making fervor prompted stores across the US to sell out of yeast. Puzzles, gardening, video games, and home improvement products all increased in sales during the pandemic. This increase in sales is because these products offer the consumer an escape or experience to distract them from their boredom created by the pandemic. This demand for products that provide experiences will continue to grow as the pandemic ends and extend to all companies wanting to compete for their customers’ time, attention, and money.
Conclusion
We are in the middle of a shift from a service economy to an experience economy. Companies can no longer compete on products and services alone. They have to create meaningful experiences for their customers to compete for their time, attention, and eventually their money.
Time is limited. So, if a customer spends more time with another company, they have less time to spend with your company. Attention is fleeting. When a competing company creates an experience that captures a customer’s attention, that is less attention directed towards your company. And money is a scarce resource. If another company can gain a customer’s time, attention, and money, there is less to spend with your company.
Joseph Pine II and James H. Gilmore say there are three questions we should ask ourselves in today’s Experience Economy:
As we come out of the pandemic, we will have to continue to ask ourselves these questions. And ensure that we are creating memorable experiences for our customers. It’s the only way we will compete and survive in the Bored or Experience Economy.
Resources:
The Boredom Economy — The New York Times. https://www.nytimes.com/2021/02/20/business/gamestop-investing-economy.html
II, J. P. B., & Gilmore, J. H. (2019). The Experience Economy, With a New Preface by the Authors: Competing for Customer Time, Attention, and Money (Revised ed.). Harvard Business Review Press.
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