The next evolution in brand experiences

This article first appeared in WARC written by, Nick Blenkarne, Head of Strategy, UK.

Leading brands continue to recognise and invest in the value of experiences as a key avenue for marketing growth and connection with their target audiences.

• Economic downturns typically lead to consumers spending their time and money on fewer, but more premium, experiences.

• Many brands will see 2023 as a transitional year, responding to the economic pressures by repositioning.

• With shifting audience behaviours, there will undoubtedly be new experiences, products and services to provide. But as the hype settles, brands and their agencies need to think about their use case – how they want their audiences to interact with them, and how they can add value.

Why it matters

Leading brands continue to recognise and invest in the value of experiences as a key avenue for marketing growth and connection with their target audiences.

Takeaways

• Economic downturns typically lead to consumers spending their time and money on fewer, but more premium, experiences. As the wealth divide becomes further exacerbated, the demand for high-end, luxury experiences will continue to rise.

• In 2023, people will be more critical and sensitive to superficial brand activations designed purely to generate headlines.

• Web3 enlightenment is a long journey, and one that won’t be cracked in 2023, but consumers will respond well to brands that are doing things that feel part of a cohesive long-term strategy.

We head into the new year with a somewhat ominous backdrop – from increasing energy prices, to disrupted supply chains and ultimately to a rising cost of living and uncertainty of where it will all end.

But for brands looking to connect with customers in this challenging landscape, experience can play a more important role than ever. Here are six opportunities that marketers can tap into in 2023.

Brand experience as a driver of customer retention

In this world, we know that consumers and clients alike are looking ever more carefully at where they spend their money, and how they get the most value from it. We know that investing in brand and brand experiences is a proven way to increase salience and value for customers, holding onto customers without eroding value through discounting.

The Q3 IPA Bellwether data confirms this, showing that leading brands continue to recognise and invest in the value of experiences as a key avenue for marketing growth and connection with their target audiences.

The impact of this on the nature of brand experiences will be guided by consumers’ price elasticity. Recent reports show that consumers are accepting higher prices, and as a result companies are seeing record profits, proving in certain categories, that consumers might not be as price sensitive as some thought.

Experience plays an essential role in building brand equity to justify pricing. One in three customers leave a brand they love after just one bad experience, so throughout the year ahead, brands must invest in their experience touch points to prove their value.

It’s the small things, and the big things, that matter

Economic downturns typically lead to consumers spending their time and money on fewer, but more premium, experiences. As the wealth divide becomes further exacerbated, the demand for high-end, luxury experiences will continue to rise.

During the 2008 recession, luxury lingerie sales soared. During the Great Depression and the 2001 recession, people were buying lipsticks in droves. You might expect consumers to cut down on these ‘luxuries’ during a downturn, but it’s these small products and experiences people value in times of hardship. So, in general, we're likely to see a decrease in mid-market brand experiences, but a buoyant demand for more frequent, low-cost experiences, as well as the few, big-ticket indulgences.

The hopeful journey towards a better-verse

In 2022 you couldn’t move for brands launching NFT projects, Fortnite skins and Roblox experiences. There’s no doubt that some brands have experimented successfully, using new technologies and platforms that are clumsily bundled under the banner ‘metaverse,’ to reach and engage younger audiences in ways they haven’t been able to previously.

But the time for rushing head-first into PR-grabbing gaming activations is over. In 2023, people will be more critical and sensitive to superficial brand activations designed purely to generate headlines.

Where we spend our online time IS changing, and so is the future of the internet. With shifting audience behaviours, there will undoubtedly be new experiences, products and services to provide. But as the hype settles, brands and their agencies need to think about their use case – how they want their audiences to interact with them, and how they can add value.

The slope of Web3 enlightenment is a long journey, and one that won’t be cracked in 2023, but consumers will respond well to brands that are doing things that feel part of a cohesive long-term strategy. Nike is a great example of this, using several different new mediums to continue strengthening its brand philosophy and flexing its influence over youth culture. From Nikeland to RTFKT, there’s a clear roadmap of experimentation that feels totally on-brand, and relevant to its customers.

Brands are in a state of repositioning, and experience is key

Many brands will see 2023 as a transitional year, responding to the economic pressures by repositioning. This might mean new product or service offerings, or a new way of engaging with customers, but looking ahead, consumers need to see authentic, demonstrable proof of new claims before they can believe them.

This is where brand experience will play a key role next year. As the most tangible touchpoint brands have with consumers, brand experiences can enable brands to walk the talk, creating an emotive demonstration of a promise, and in turn, changing the way people think and feel about them.

This year, we helped Major League Baseball launch a new version of the sport, Home Run Derby X, an electrifying new baseball format that took MLB on a global tour, aimed at a younger, culture-focused fanbase. This new experience proposition freed the brand from the constraints of the main league and allowed it to redesign itself around the passion points of a new audience.

Smarter experiences with proven ROI

With a cost-of-living crisis, consumers will be scrutinising their purchasing decisions. And if brands want to remain front of mind, they need to demonstrate that they deserve to be so. Finding creative uses for new and existing technologies to capture customer data, to enhance and personalise brand experiences will open more opportunities for brands to create value for customers out of their experiences.

Land Rover Defender found this recently, with its ‘Just Add Water. And Mud. And Ruts. And Rocks…’ campaign, which turned sharing data into a theatrical moment for audiences. Land Rover used water-reactive hydro chromic ink to reveal a QR code inviting people to book a Land Rover experience day, allowing the car brand to capture the customer data – making the information and method relevant and within the brand’s world while leaving audiences with a positive impression. This generated 985 hot prospects, 89% of attendants followed up post experience leading to an extraordinary ROI of 29:1.

Sustainability: Ambition vs. reality

While many people would describe themselves as likely to choose a brand with a positive approach to environmental sustainability, a recent Kantar survey showed 45% of people agreed it’s recently become more challenging to act sustainably because of the social or financial constraints they were facing.

While climate change might be slipping down the list of consumer priorities in the year ahead, it’s still an important consideration factor for millions of consumers, who are becoming increasingly sensitive to PR stunts and greenwashing. Brand experience can be a crucial tool for businesses to genuinely demonstrate their commitments.

Subscription-based CPG brands, like Who Gives a Crap and Smol place experience at the heart of their business, combining convenience, values and value, packaging it all in an Instagram-friendly style.

This year, people’s desire to connect through meaningful moments is stronger than ever – but they will be more selective about which experiences they attend. While 2023 will likely be challenging, there are huge opportunities for brands that can differentiate their products and services and build loyalty with audiences through powerful experiences.