The Experience Frill

The other day I walked past a Baskin Robin cake shop and was attracted by the cute and colourful display of its cakes in the fridge. On a closer look I was aghast that a 6 inch cakes costs $69. I wondered to myself who their customers are as I can never bring myself to buy one. At home a magazine article entitled "The Experience Economy Boom" caught my eyes.

I did a bit of research and learn that economic value follows a progression from commodity to goods to services to experience. For example if a cake is baked at home, the ingredients are the commodities. A cake sold at a supermarket has progressed from commodity to goods. A fanciful cake (a child's birthday cake for example ) baked according to customer specification has incorporated a large service element. Finally a fanciful birthday cake delivered to a party by a man dressed as a joker followed by some clownish acts has created a memorable experience. The price people are prepared to pay increases along this progression path.

It dawns on me that my unwillingness to pay for a fanciful cake means I am stuck at the goods level. I think many of the baby boomers are like me, which explain why they still have their cuppa at coffee shops while Starbuck and other gourmet coffee cafes are patronised by younger people who don't mind paying for the ambiance.

I think we baby boomers love to save and are reluctant to pay more for the frills of a product. For us the financial security in having a large reserve is top priority including leaving heirs with the means to live comfortably. Many of our parents struggled for a living and we hunger for that peace of mind that comes with financial freedom.

Nevertheless I feel baby boomers have also learned to embrace experiences, for example prioritizing travel above owning goods like expensive watches.  The younger people's spending habits has also rubbed off on us. The Millennials have been dubbed the "wellness generation" by Sanford Health ( a non profit health care delivery system ), spending more on health, wellness and experiences.

Still it takes quite some deliberation before we go for a "splash". For instance having visited London several times, my husband and I have viewed the London Eye and River cruise as traps for tourist dollar. Only upon the last visit we decided to "splash" . Oh my, how could we even miss this experience during the previous trips! Sometimes I look at my frugality with self pity and view my husband's value-for-money mindset as pathetic.

The magazine article on "The Experience Economy Boom"  described products packaged with memorable experiences and featured a dinner-theatre outfit providing an immersive dining experience.

Well I guess I need to buy the $69 cake for a start to get used to paying more for the Experience frill.