By Ethan Hanson, Senior Director, of Brand, Experience, and Digital Strategy at Merkle
Across history, human progress has been marked by significant epochs, from the ancient Stone Age to the transformative Industrial Revolution. Today, we find ourselves deep in the Experience Economy, a time that fuels global growth, emphasizing profound engagement and meaningful experiences.
To thrive in this new era, brands must deliver best-in-class experiences that embody these three core attributes:
- Empathetic
- Immersive
- Memorable
1. Empathetic: Creating Authentic Experiences through Empathy and Understanding
Understanding Consumer Emotions: As dentsu’s Consumer Vision 2035 Report highlights, “the way consumers buy and interact with brands will be more dependent on emotions and ‘in the moment’ states.” Authenticity in these interactions can be achieved by anticipating and addressing these emotional needs.
Predicting Cultural Shifts: The same report notes, “As we look to the future of culture, we will need to shift from simply reacting to change, to predicting which solutions will create new, untapped positive change to survive as a business.” For example, in Merkle’s B2B Superpower’s Index Report, the research found brands have moved beyond servicing the needs of their organizations to place more importance on “softer” decision drivers, looking to contract with a partner who “takes care of its suppliers, partners, and communities,” “is committed to reducing its environmental impact,” “is known as being a good employer,” and “has a culture of diversity and inclusion.”
Enhanced Human-AI Relationships: dentu’s Consumer Vision Report predicts that by 2035, human-to-AI relationships could be as fulfilling as human-to-human relationships, indicating a need for empathy-driven AI interactions. While tech may never fully replace human-to-human interactions, the use of technology can enhance our experiences with brands and between humans.
AI-powered tools like Google Translate or Microsoft Translator create conversations between cultures that may not have been possible before. I recently attended a meeting in Spanish with my Microsoft Translator app on my lap, listening to and translating the speech in real-time. I found myself laughing, nodding in agreement, and socializing with those around me because I was following the conversation.
Brands have used social listening but in the last decade, we’ve seen AI utilized to analyze customer feedback across social media and other platforms to understand consumer needs and sentiments at scale.
2. Immersive: Creating Immersive Experiences through Data, Tech, and Personalization
Technology to Enable Empathy: As we move past the common Hollywood portrayal of AI’s apathy towards emotion, we see AI’s ability to enhance our empathy for one another and the brands we interact with.
Devices like Google’s Pixel Buds are starting to offer real-time translation features, which could dramatically reduce language barriers in the near future. In fact, according to dentsu’s Consumer Vision 2035 report, “77% globally are interested in earphones that would immediately translate what someone speaking to them in a different language is saying.”
Integration of Physical and Digital: According to dentsu’s report, 84% of consumers want technology to seamlessly integrate with their physical environment. This blending can make brand interactions feel more natural and immersive.
Sephora transformed the beauty retail experience with its Virtual Artist feature, which uses augmented reality (AR) technology to allow customers to try on makeup virtually. Lego stores offer interactive experiences that combine physical play with digital technology. The Lego Life app enhances the physical play experience by allowing users to share creations, participate in challenges, and access digital building instructions.
Personalization through Data: Today’s brands must be creative with their personalization to capture the attention of consumers. Using the recipient’s first name in an email doesn’t cut it anymore. Brands need to use data to personalize in ways that are unique, entertaining, and unexpected.
For example, Spotify Wrapped provides users with personalized summaries of their annual music listening habits. It includes shareable infographics, encourages social media engagement, and highlights year-on-year metrics, creating a nostalgic and celebratory experience for music lovers worldwide.
3. Memorable: Creating Memorable Experiences through Optimization and Listening, Leading to Loyalty
Optimizing with AI: The modern business landscape operates at breakneck speed, with organizations constantly seeking avenues to enhance efficiency, delight customers, and outpace competitors. AI optimization emerges as a potent solution, leveraging artificial intelligence to fine-tune processes, optimize operations, and create lasting impressions for customers.
Consider the following use cases:
- 24/7 Customer Service via AI-powered chatbots that assist around the clock, reducing wait times, increased response times, and providing personalized support.
- Dynamic pricing strategies based on market conditions to remain competitive while reducing the dissatisfaction of loyal customers.
Listening and Responding to Consumer Preferences: The 2024 Loyalty Barometer report indicates that participation in loyalty programs is up, with consumers increasingly expecting such programs to reflect their ongoing preferences and behaviors. Consumers are demanding unique loyalty experience beyond the norm of points and redemption.
Consider the following use cases:
- Strategic Partnerships: Developing unique experiences for loyal customers through cross-brand collaborations offering exclusive discounts and joint promotions.
- Card Linking: Links the customer’s payment methods to provide convenient paths to purchase and loyalty in one tap while also collecting rich customer data.
Striking the Balance: Data Privacy and Personalization: The 2024 Loyalty Barometer report also warns, “while financial rewards remain crucial for loyalty programs, there is a growing discomfort among consumers regarding the use of their data. Brands need to find a balance between personalization and privacy to maintain trust.”
In the past, toeing the fine line between being helpful and crossing into “creepy” territory has been a challenge for brands. However, today’s consumers increasingly appreciate the value of their data—whether it benefits the brand directly or poses a risk of data breaches. To maintain trust, brands must transparently communicate the data they collect and how it enhances the customer experience. For instance, providing an email address allows for personalized recommendations tailored to the customer’s preferred frequency. Brands must showcase those benefits and openly communicate the value of the data exchange to maintain trust with their consumers.
Closing
In this dynamic era of the Experience Economy, where empathy, immersion, and memorable interactions reign supreme, businesses have a unique opportunity to create lasting connections with their customers. By leveraging AI-driven empathy, cross-cultural communication tools, and personalized experiences, brands can forge meaningful relationships that transcend transactional boundaries. As we navigate this transformative landscape, prioritizing authentic engagement, deep understanding, and continuous innovation will be key. Brands must embrace these principles to build a future where brands and consumers connect in truly impactful ways.
