“Nothing ever becomes real till it is experienced” – John Keats.

Experiential marketing is based on the experiences of the customers with a brand, store or a website. Such experiences are derived through various stages of purchase such as the mere thought of purchase, the actual purchase and post-purchase stages. It helps brands to differentiate from each other in terms of the experiences that customers go through while shopping from them. It creates moments that can be remembered in a certain way. It can create lasting impressions by meeting customers’ needs and aspirations in such a way that it engages them with the product or the brand for a very long period. The traditional marketing offered only the features and benefits of the products but when the customers enjoy the experience of engaging with the product in all three stages of pre-purchase, actual purchase and post-purchase and remember the facts, it is called experiential marketing.

What is Customer Experience (CX)?

The word “Experience Economy” was coined by Joseph Pine II and G.H. Gilmore, co-founders of Strategic Horizons LLP, a consulting firm in Ohio, in the 1990s. It is based on the idea of a changing economy driven by customer experiences, i.e., how a customer thinks and feels in certain situations. These experiences could be real or virtual, but they simulate emotions that are remembered as memories. According to them, the world economy has been driven by four specific economic offerings at various points of time in the history. It all started with the commodities economy which was based on grown economies or raw materials derived from the soil. The most important aspect of this economy was price sensitiveness of the customers. Then in the subsequent period, goods were manufactured by converting commodities into physical goods through industrial production processes also known as the industrial economy. Price still played the biggest motivation for customers. The traditional marketing based on features and benefits of a product was developed during this period. Later half of the 20th century saw the emergence of service economy, and services other than products became the predominant economic offering that facilitated the customers with any of their issues with the product giving a sense of ‘time well saved’. Customers started looking for more than just products. Therefore, several services like telephones, travel and tourism, healthcare, after-sales service, and in-store services became an important aspect of the retail industry. As services and products became more like commodities and were evaluated on the basis of prices, there was a need to change the offerings that could grab customer attention more than the price. This led to the development of the experience economy which then became the predominant economic offering. To know the customers better and serve them better, it became more important and relevant to provide better experiences to the customer that was invaluable. Experiences are the events that engage each person in a way that creates moments that are so nice that that creates personal memories of time well spent. For e.g., in case of coffee, the four specific economy offerings can be understood as: coffee beans (commodities), which then shifted to packaged powdered coffee (goods), and then to instant coffee services, and finally to a distinctive Starbucks coffee experience.

Experiences are built on services. Better service can provide better experiences. Services assist goods to provide customer satisfaction or help the customer to resolve an issue. Services are reactive processes and experiences are proactive processes. Goods are built on commodities that are made with raw materials that came out of earth. For e.g., Apple has transformed itself from selling just products and services to selling amazing and seamless experiences (Pnie & Gilmore, 1997).

Over a period, goods and services became commodities when evaluated in terms of prices. People did not care who made them, or their brands or features. What mattered most is only price. Internet provided a seamless experience to customers with price comparisons across websites becoming easy. Thus, the internet became the greatest force of commoditisation. Today, services like healthcare, insurance, education, beauty, communication, travel and tourism are all driven by price comparisons over the internet. Hence, services are also being treated like commodities. Therefore, goods and services no longer behave the same way as they used to, and so there is a requirement to move to the next stage of experience. Today, tourism, movies, video games, restaurants, hotels, airplanes, food, festivals, parties, shows—are all based on customer experiences. These experiences are staged in a way that they become a series of memories occurring at different moments that people carry for longer periods and spread them through word-of-mouth. Thus, experiences itself become marketing.

Why does CX matter?

According to PwC, 73 per cent customers rank CX as the third most important factor in their purchase decision, after price and product quality. The other variables that affect CX are speed, convenience, user-friendliness and good services that can create lasting impacts on the customers. The report also suggests that at least 20 per cent of customers stop purchasing from their favourite brand after an incident or a bad experience (PwC, 2018).

CX is neither only about customer service nor about the product itself. but it also includes the before and after interaction with the product. For example, when a person decides to purchase a high value item from a luxury fashion brand, his decision making goes through several stages of CX such as the excitement, thoughts and information seeking behaviour at the planning stage, the aspirations and realisations at the execution stage and the expectations in the post-purchase stage. These feelings create the entire range of experiences that the customer goes through and if these experiences are pleasant then it will not only satisfy the customer but also help in the product and brand promotion through word-of-mouth and recommendations by the customer himself. The customer will do this for free without any advertising or marketing cost involved for the brand. This is the concept of realisation of utility.


Utility is kind of a measure of psychological well-being. It is a measure of experiences, satisfaction, reward and pleasure. So, more utility is considered better.

In psychology, there are three major sources of utility:

a) Anticipated Utility – this refers to the amount of utility that is expected to be gained from an experience. For e.g., while buying a car, it is not just about the car but the thought of buying it, thinking about which car to buy, getting excited about the car, etc.

b) Experienced Utility – this refers to the amount of utility that is gained from an experience or actual use of the product. For e.g., driving the car, its comfort levels, social status, features and looks.

c) Retrospective Utility – this refers to the amount of utility that one remembers from having an experience. It is the moments lived with the products that creates memories and these memories shall decide the levels of satisfaction and confidence on the product and the spread of a good word-of-mouth.

Therefore, all the three utilities need to be managed well to create a truly winning customer experience. As they say, experiences are not flat but there is a rise and fall in the way people feel and experience at different moments of delight, despair, boredom and indifference. If these moments are captured well then better customer experiences can be curated by the brand. The brand is as strong as the experience it can create for its customers as it will help to build meaningful and lasting connections.

How better CX can be achieved?

In today’s world, CX can be achieved through various customer-facing technologies like streamlining tools such as websites, social media, augmented reality, chatbots, metaverse and virtual realities which are interfaces and platforms that provide customers what they want. Some of these technologies are explained below:

a) Immersive experiences and metaverse – Brands like JP Morgan, Gucci, Clarks and Spotify have invested in emerging metaverse platforms like Sandbox, Decentraland and Meta Horizons. The use of metaverse helps in making virtual tours, virtual presence, virtual purchases of virtual goods and service to achieve immersive experiences. Video games like Roblox and Fortnite expanded their technologies during the pandemic and used metaverse to augment their user experiences where the user could purchase virtual products from several international brands. In 2021, the metaverse made around $12 billion business through these virtual purchases.

b) Personalisation and customisation – Here, the retail experience is customised according to the customer’s need like personalised sneakers offered by Adidas and Nike. 3D printing is used to create physical goods and products that are exclusive to the customer. Personalised fashion clothing is also offered according to virtual body measurements obtained through smart phones.

c) Conscious customer experience – This can be given by providing details like who made the product, and product details such as its raw materials quality, cost, value chain, packaging, transportation, carbon emission etc.

d) Social shopping experience – This is given through the use of social media.

e) Non-fungible tokens (NFT) in fashion – The use of NFT emerged during the pandemic where the use of digital fashion grew with a growing interest in virtual reality. This gave rise to use of metaverse, 3D printing, and augmented reality in fashion. There was a demand for fun, personalised and immersive digital experiences through video games, virtual dressing rooms and virtual trials that opened up numerous opportunities to the customers to shop unhesitant with a virtual experience of the product through virtual trials. Virtual stores, digital twins, exclusive content, video game collectibles and digitalisation and personalisation—all formed a part of the NFT in fashion.

Since experiences are not self-generated but induced, a company needs to provide the right environment and setting for the desired customer experiences to emerge. Therefore, if a company can stage personal customer experiences for its individual customers, then it can become economically viable and progressive.