Tina Jesson asks "Just look what's happening in the UK market. Does an upscale tea service provide an experience to treasure?"
Figures show we are continuing to spend less money on buying things, and more on doing things – and telling the world about it online afterwards, of course. From theatres to pubs to shops, businesses are scrambling to adapt to this shift.
Posting pictures of what you just bought is gauche; posting pictures of something you’re doing is fine.
It was an audacious plan for an unloved bit of Manchester. A £25m arts centre to be built on a derelict plot that had not felt a cultural pulse since the closure, 15 years earlier, of the legendary Haçienda nightclub. It would be called Home, formed by the merger of two proud but financially imperilled institutions – the Cornerhouse cinema and gallery, and the Library Theatre Company – and would, its backers hoped, revive a forgotten corner on the city’s southern edge.
“There was confidence from the city leadership that it would work, but a lot of my peers and colleagues in the arts were saying to me, ‘Who’s going to go there?’” says Sheena Wrigley, executive director of Home, which includes two theatres, five cinema screens, an art gallery and a restaurant and bar. “It was a very unprepossessing area with a big car park and one large office block. It wasn’t visible or on a main thoroughfare.”
Programming would swim far from the mainstream, too. The centre opened in May 2015 with a challenging play about two thwarted lovers trying to survive a recession in a city like Manchester. This week the cinema is showing Lady Macbeth, a subversive Shakespearean noir, and The Handmaiden, an erotic Korean period thriller. The free gallery includes an exhibition of vibrant art from post-Franco Spain and an exploration of the role of vogueing in gay black culture.
Wrigley admits to having been nervous when she and her team set an ambitious target of 550,000 visits for the first year. “But we smashed that in six months and did just shy of a million,” she says. And they kept coming: as Home approaches its second birthday, it is about to welcome its two-millionth visitor. “It’s fascinating to me that you can open a venue of this kind and size and it can find its audience straight away in a difficult period,” Wrigley adds. “Of course, I would like to say it’s all about good artistic choices, but something else is going on.”
Wrigley is right. A series of studies is revealing strange things about our spending habits. They call it the “experience economy”, which gives it the sense of a grand theory. And there is science behind it, but it’s also very simple: regardless of political uncertainty, austerity and inflation, we are spending more on doing stuff, choosing instead to cut back on buying stuff.
The latest figures come from Barclaycard, which processes about half of all Britain’s credit and debit card transactions. Figures for April show a 20% increase in spending in pubs compared with the same month last year. Spending in restaurants went up 16%, while theatres and cinemas enjoyed a 13% rise. Meanwhile, department stores suffered a 1% drop, vehicle sales were down 11% and spending on household appliances fell by 2.5%.
Barclaycard says the trend began to emerge about a year ago. And retailers are feeling it. In March, Simon Wolfson, chief executive of Next, blamed the clothing chain’s first fall in profits for eight years on the move from buying things to doing things. More startlingly, Ikea, the world’s biggest furniture retailer, told a Guardian conference last year that consumption of many goods had reached a limit. “If we look on a global basis, in the west we have probably hit peak stuff,” said Steve Howard, the company’s head of sustainability.
It would be easy to assume that contemporary influences are at work here. The world is a bit of a depressing place right now, so let’s have a nice evening out rather than buy a sixth pair of shoes. But theories abound of a much broader shift. And Ikea is arguably late in calling “peak stuff”. In 2011, Chris Goodall, a British environment writer, used government data called the UK’s Material Flows Account to track consumption of stuff, and identified 2001 as a tipping point, long before the 2008 recession and everything that followed. He believed we had “decoupled” economic growth and material consumption.
And as we consume less, we are doing more. “If you think about the 20th century, the big dominant value system was materialism, the belief that if we had more stuff we’d be happier,” says James Wallman, a trend forecaster and the author of Stuffocation: Living More with Less, in which he charts the move from possessions to experience. “The big change to what I call experientialism is more about finding happiness and status in experiences instead.”
The happiness bit perhaps stands to reason, but studies suggest the anticipation of an experience has a crucial, additional value. In a 2014 paper called Waiting for Merlot, psychologists Amit Kumar, Thomas Gilovich and Matthew Killingsworth showed how people report being mostly frustrated before the planned purchase of a thing, but mostly happy before they bought an experience. That feeling lingers longer, too, tied up as it is with memory. “We call it hedonic adaptation,” says Colin Strong, the head of behavioural science at Ipsos, the market research group. “And the hedonic payoff of experiences is much greater.”
We are also less likely to compare experiential purchases than we are products, in a way that means we are all happy with what we buy, regardless of what we can afford. “So if you have a Nissan and your neighbour has a Porsche, there’s no doubt who has the better car, and if you ask the Nissan driver to swap, they will,” Wallman says. “But if you ask people who went on holiday to the Seychelles or south Wales, it’s clear who had the fancier holiday, but surveys show the person who went to Wales won’t swap because they had an equally good time.”
If the experience economy has a levelling effect, research also suggests that part of the reason for its rise is its greater potential as a status booster. This supports the idea, questioned by some (and not backed up by Barclaycard, which does not account for age), that younger people – namely millennials – are driving the consumer shift. “It used to be that our car, or handbag or wallet showed our status. Now we post Facebook pictures from a chairlift in Chamonix or the latest music festival,” Wallman says. “Social media is supporting this change. Posting pictures of what you just bought is gauche; posting pictures of something you’re doing is fine.” Strong also thinks the “slightly impoverished nature of millennials” is compelling them to get out more.
‘It used to be that our car or handbag showed our status. Now we post Facebook pictures from a chairlift in Chamonix or the latest music festival.’
At Home, however, Wrigley says that while students and young professionals are pouring through the doors, the venue’s appeal is crossing generations. “A lot of arts organisations peak at around age 45, but ours is very flat,” she says. “We have a lot of older explorers – people who worked in professional services or local government, say, and are looking for a quality experience. And baby boomers who have been able to stop work in their 60s and have pensions to spend.”
Restaurants are capitalising fast, opening at a record pace in cities all over the country. In London, restaurant guide Harden’s counted 200 new openings in its 2017 edition. Cities including Manchester and Glasgow have seen similar or even greater booms. Russell Norman, founder of the Venetian-inspired Polpo restaurants, is about to open his 12th outpost in Bristol, having taken the chain to Brighton, Exeter and Leeds since it landed in London in 2008. The restaurants are as busy as ever, but Norman has been surprised by booming recent demand for gift vouchers and private party requests. “When we opened in Exeter we expected it to be an all-day offering, but we’re really finding that people are coming for special occasions, as an event, or an experience,” he says.
Businesses already dealing in experiences are enhancing them to benefit from the shifting economy. Theatres would once never have considered putting a restaurant downstairs, but now you’d be mad not to. The restaurant at Home in Manchester is taking £2m a year, Wrigley says, almost double what was expected. At the Chichester Festival Theatre, where ticket sales are up 12% on last year, the restaurant is booming, too. “We don’t have to be just excellent theatre-makers, but excellent business people,” says Rachel Tackley, the executive director at the venue in West Sussex. “It’s about creating theatres as destinations where you can spend more than two and a half hours watching the show.”
Marston’s, one of the country’s largest pub groups, with more than 1,500 pubs, is racing to meet demand for more than pints of beer. Traditionally “people use pubs, but go to restaurants,” says the Wolverhampton-based firm’s managing director, Pete Dalzell. The group has shed hundreds of “wet-led” traditional pubs in recent years, and opened more than 150 pub-restaurants since 2009. Last year revenues were up 7% to £905.8m, and the average pub profit has doubled since 2012. “We’re opening up a new range of offers for consumers who are choosing to spend disposable income doing something with friends rather than buying something,” Dalzell adds. The way we shop now: the revolution in British spending habits.
If the writing is on the wall for the purveyors of things, their response is to make the walls more appealing. “We’re seeing a fundamental shift in pretty much all categories to retain being much more experiential,” Strong says. Increasingly, this means using technology to create the feeling of a meaningful relationship between brand and buyer, online and offline. High-street clothing stores are deploying shop assistants with tablet computers on which they can call up your previous purchases and tastes based on online browsing. And with smart marketing, even the dullest essentials are being sold as part of a brand experience. In the US, one Los Angeles TV producer, frustrated by the high price of razor blades, launched an online subscription service in 2012. Dollar Shave Club began posting blades for as little as $3 a month and, with the help of a viral ad campaign, earned 12,000 orders in the first two days. Deliveries come with an irreverent magazine. Customers felt part of something, free from the cut-throat corporate economics of brands such as Gillette, which is owned by Procter & Gamble. It soon had more than three million subscribers, and in 2016 Unilever, P&G’s big rival, bought the Dollar Shave Club – and its members – for $1bn. “People have got that we can move from a transactional relationship mediated by big-scale advertising to much more of a one-to-one relationship with the customer,” Strong adds.
That relationship is strong in Manchester, where Wrigley says she has been surprised by the scale of Home’s success. The venue is already being overshadowed by rising office and apartment towers, and a new hotel. It has become the beating heart of a neighbourhood that was a wasteland only four years ago. “That’s the magic of experientialism,” Wallman says. “It’s not anti-consumerist or anti-capitalist. Money is still going into the economy and creating jobs – we’re just spending it on experiences.” Wallman, 43, has been following the trend for more than 10 years, and has seen it transform his own life. At his wife’s prompting, he has just acquired a second pair of trousers, but is holding out with his one pair of shoes and five holey T-shirts. “I’d rather do things,” he says. “I took the kids to the Natural History Museum on Sunday. We went camping recently, I go climbing, play football. And it makes us happier.”