Priceless: More Than Just Advertising—A New Consumer State of Mind
In today's fast-evolving market, consumers are increasingly prioritising experiences over material goods. Research from the Mastercard Economics Institute highlights this significant shift in consumer behaviour, revealing a rise in spending on experiences like music events and travel. Beatrice Cornacchia, EVP of Marketing and Communications for Europe at Mastercard, emphasises the need for marketers to adapt their strategies in response to this emerging 'memory-making' trend.
The Rise of Experience-Based Spending
Mastercard's bold move 25 years ago, encapsulated in the slogan "There are some things that money can't buy, for everything else there is Mastercard," has proven to be visionary. Research indicates that in 2023, spending on experiences like travel and dining out will account for 22% of total spending across Europe, up from 19% in 2019. Meanwhile, spending on physical products has remained stable, underscoring a clear shift towards valuing experiences.
Drivers of the Experience Economy
Several factors contribute to this shift towards experience-based spending. Generational changes play a significant role, with younger consumers prioritising experiences that evoke emotions and create lasting memories. Additionally, an increased emphasis on well-being and growing environmental awareness are influencing spending habits. The COVID-19 pandemic and geopolitical uncertainties have further highlighted the value of creating memorable experiences that offer lasting joy, as Cornacchia suggests.
Implications for Marketers
The shift towards an experience economy necessitates a rethinking of traditional marketing strategies. Mastercard stresses the importance of creating special touchpoints by understanding what is important to consumers. This approach involves integrating additional services, perks, and personalised elements that enhance the overall customer journey. For example, offering lounge access or personalised travel recommendations can significantly improve the consumer experience.
Cornacchia explains Mastercard's approach: "I don't need to sell anything to my consumers. I just need to make their journey easier, seamless, and, ideally, priceless." She highlights the importance of understanding consumer touchpoints and enhancing the customer journey from the discovery phase. Mastercard aligns its marketing budget with experience-based situations, partnering with renowned entertainment and sports institutions such as the UEFA Champions League Final, Roland-Garros, and the Festival de Cannes.
Internal Communication and Impact
This strategy extends beyond external marketing to internal communication about the impact of consumer spending on the bottom line. Cornacchia provides a compelling example: "Two days before a Taylor Swift concert in the US and one day after, there was a 68% increase in food and beverage revenues in cities close to the concert and a 40% increase in accommodation revenues." These figures demonstrate the tangible return on investment and profitability generated by experience-driven consumer spending.
In summary
The trend towards valuing experiences over material goods represents a significant shift in consumer behaviour. For marketers, this shift presents an opportunity to rethink traditional strategies and focus on creating seamless, personalised experiences that resonate with consumers. Mastercard's approach to enhancing the customer journey and aligning its marketing efforts with experience-based situations offers valuable insights for brands looking to thrive in this evolving landscape. As consumers continue to prioritise memorable experiences, the concept of 'priceless' transcends advertising, becoming a true state of mind.