Move over materialism: The 'experiential advantage' wins most valuable social currency
While scoring a new iPhone is fun, showing off that picture of your excursion kayaking on Canyon Lake makes people happier, according to research. Plus, inflation is expected to affect the holiday shopping season. So, it may be a good time to give the gift of yourself or a special experience to your loved ones.
While scoring a new iPhone is fun, showing off that picture of your excursion kayaking on Canyon Lake makes people happier, according to research. Plus, inflation concerns are expected to affect the holiday shopping season. So, it may be a good time to give the gift of yourself or a special experience to your loved ones.
According to the deep dive Assistant Professor of Marketing Evan Weingarten and Associate Professor of Marketing at Ohio State University Joe Goodman took to investigate which made consumers happier — buying possessions or experiences — the latter was victorious. It’s a phenomenon known as the experiential advantage, and it’s likely a sensibility that will continue to gain momentum.
Their work was initially inspired by the various questions other marketing experts were posing, including Weingarten’s former colleague and collaborator at Wharton, Cindy Chan. She investigated how giving people experiences as opposed to material gifts strengthened their connections. Others explored the benefits of experiences over possessions. But they found much of the research findings were fragmented and left them with questions.
The two decided to build a more coherent and comprehensive review of studies spanning more than a decade of literature. In “Re-examining the Experiential Advantage in Consumption: A Meta-Analysis and Review,” the co-authors outline their case after meticulously synthesizing data from 141 studies comparing the effects, or the differences between the two ends of the material-experiential continuum.
Along the way, there were affirmations and surprises, and ultimately, more questions.
The experiential advantage
Pursuing happiness through consumerism is nothing new. Weingarten says the research is “all in” on that evidence that experiences yield greater happiness (self-esteem, relatedness to others) than for similar material possessions. Does that mean material goods are taking a back seat? Not if marketers of products can figure out how to use this advantage to their, well, advantage.
In their piece in The Journal of Consumer Research, Weingarten and Goodman maintain, “Consumers have access to a wide array of options when it comes to spending their income, and they continually face a choice between purchasing material goods — such as new skis or a new sofa — to experiences — such as a ski vacation or learning to skydive. Similarly, marketing managers must choose whether to invest their limited resources in the product itself (e.g., the brand REI developing new ski equipment), or in the experiences, they may offer as well (e.g., the brand REI developing new ski trips for their members).”
While their work revealed a preference for experiences, it doesn’t mean material goods don’t also lend to happiness. But the insight can help shape and influence how marketers craft campaigns, says Weingarten.
“The hiking boots you purchase from REI or Patagonia — those aren’t just things that sit in your closet and are nice, but they’re also integral in identifying who you are: an outdoorsy person,” Weingarten says. “Wearing them creates the experience of going out on long hikes with friends.”
Speaking of which, the research indicates the experiential advantage spikes when shared with others, as opposed to solitary activities. That could point to one of the reasons experiences triumph — social utility. Seasoned marketers identify this as how a product or service satisfies the need for relatedness. That in itself, says Weingarten, might be the strongest flex in the experiential advantage’s muscle — social connections and currency.
The experiential advantage also wields more weight with consumers of higher socioeconomic status, and when the experiences are positive ones. The experiential advantage over possessions, he says, also depends on memory, another factor at play that warrants further investigation. Weingarten recalls his personal story of investing in a plane ticket to visit his father in Florida to celebrate his dad’s birthday instead of presenting him with new golf clubs.
I just hope he has a picture of us during that visit hanging in his living room!
It begs the question: Under what circumstances do material goods trump experiences?
Laurie Sherman of Phoenix might have answered it best after losing most of her family’s possessions to fire in her home. “It’s a tough question as some possessions are memories/links to people no longer with us. I am forever thankful that the quilts my grandma made me and some pictures were the only things saved from the fire.” Certain gifts or purchases may hold such strong attachments to experiences, their value increases.
Giving birth to answers, and more questions
Research always begins with curiosity. Former investigations on this topic examined qualitative data around when and why consumers prefer experiences to possessions. Weingarten’s and Goodman’s approach sought to build on those efforts. They sifted through and coded the broad set of literature, starting with the ground-breaking study in 2003 by Van Boven and Gilovich. It took nearly two years to cross-reference and update the data in search of variables that could inform when the experiential advantage occurs.
It was tedious work, Weingarten says. “One-hundred and forty-one studies are a lot, and we e-mailed every single author of each of the unpublished and published works,” he reports. They were in search of quantifiable data to find patterns and correlations that might lead to a more aggregate insight for the literature. During that time, Weingarten continued to build his career, relocate around the country, and juggle other deadlines and projects. There were tough times, a few regrettable moments, and even periods of levity when they were reminded of what matters most.
Turns out, that was an experience, too.
“The fun part is that along the way, we reached out to a lot of people. We requested data from Cindy Chan, who was very pregnant at the time. We were going back and forth one day over email. Suddenly we got a message from her that said, ‘Hey, can I get back to you later? My water broke, and I’m heading to the hospital.’ And we said, ‘Of course! Please, take your time getting back to us!’” It was just one reminder, he says, during that busy time about what matters most.
As so often happens while excavating the data mine, answers give birth to more questions. Weingarten was surprised to find out, for example, there wasn’t a more recent, expansive, overarching theory to prove exactly when the experiential advantage does or does not take place over material goods. He also believes there is room to rethink the illustration of the material-experiential continuum.
There may be times when material goods are more valuable than experiences, and we want to carve out a deeper understanding to make more nuanced recommendations to marketers.
Perhaps he says, there is a way to strike a balance between the cutting-edge new grill and the experience of backyard cookouts that marketers can leverage.
Experiential (or engagement) marketing is having its time in the sun. It’s a strategy brands use to harness the power of experiences to help customers align with their shared values. Braden Becker at HubSpot says 65% of brands that use experiential marketing claim a positive correlation with sales.
Take Red Bull’s “Stratos” jump. The company partnered with Austrian skydiver Felix Baumgartner to set the world record for the highest skydive. Not only did his cataclysmic feat break the record, another one was smashed before he even touched back down safely. The entire event was streamed online and pulled in the highest viewing traffic of any other live stream ever broadcast on YouTube at the time (2012) with more than 8 million viewers.
What’s the next frontier to discover along the material-experiential continuum? Weingarten and Goodman recommend investigating whether other psychological needs can be met along the material-experiential continuum, such as competence. Further, the rise of social media extends the shelf life of an experience since the images continue to resonate online. Does that contribute to or deter from the merit of experiences as related to happiness? Their continued exploration is certain to be an all-consuming experience.
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