Experiential: Bringing it all back home
Increasingly, products are succeeding when they can recreate an out of home service – one which is inherently experiential – in the comfort of a consumer’s kitchen or living room. This presents a huge opportunity for take-home brands to narrow the price gap between what customers pay when they are out and about and what they are prepared to spend on having the same product at home. By aligning themselves closely with out of home experiences, manufacturers and brands can more easily justify a higher cost for their products.
In fact, this is the strategy behind one of the most successful grocery categories in recent years – coffee pods. This market has actually outpaced the phenomenal growth of out-of-home coffee, increasing in value by almost 20% to £211 million in just one year as shoppers clamoured to recreate the satisfaction of a baristabrewed drink in their own homes.
Less but better
The phenomenon isn’t limited to coffee. The current generation of 18 to 44 year olds is buying fewer alcoholic drinks for consumption at home than in previous years, but what they do buy is higher quality and at a higher price point. This is reflected in the growing trend for homemade cocktails, rather than heading out to a bar for the professional version.
Meanwhile in the entertainment sector, learning from out of home has been an effective response to intense competition from streaming services, which have effectively commandeered the cinema experience. With consumers more interested in access than ownership, streaming platforms like Amazon Prime and Netflix are making huge inroads into the traditional markets: the percentage of consumers buying physical lms has dropped by 15 percentage points since 2014, down to just 31%. Physical entertainment providers have been forced to draw on the benefits of premium technology to keep up.
In-home big screen experiences
For example, advancements such as Blu-Ray and 4K resolution have brought a price premium to video as the quality gives consumers a cinematic experience in their own homes, with the added benefits of choice, pausing and unlimited numbers of viewers on the sofa. 49% of consumers think it’s worth spending money on entertainment technology to make their home more enjoyable. It’s important for brands and manufacturers to understand that their product itself doesn’t have to equal the experience – it can simply facilitate it. This is because the success of an experience doesn’t necessarily depend on the quality of just one item: a night in with a movie, popcorn and drinks can still be enjoyable, even if the film turns out to be a turkey.
More than half of people think it’s worth spending money on food and entertainment for a night in. Brands and manufacturers need to recognise this – understanding what’s important to people and what they value most. What it is about the going out experience that is special to consumers, how can your product help replicate this at home, and how can you communicate this to the consumer when they’re at the decision making stage?
This is an excerpt from our report "How does that make you feel?" about the power of consumer experiences. Get your copy of the report today, and watch the video in which Simon Quirk explains how the booming out of home market can provide a guide to the experiences consumers are looking for.