Consumers are looking to have unique experiences that are worth their time and money, whether that means heading backstage to meet the Rolling Stones, enjoying a private meal with a celebrity chef or learning to ice skate with an Olympic medalist.
Platforms have been following this trend for several years, and sharing companies like Airbnb have launched experience offerings that allow users to purchase classes, trips and activities. Even more traditional companies like the Hyatt Corp. have stepped into the space, offering members exclusive deals like private sushi lessons or treks through Southern California’s wildlife trails.
But as competition in the ecosystem increases, marketplaces confront the usual challenges facing players in the platform economy. They must protect both buyers and sellers against fraud, make sure payments are prompt and — most of all — ensure they are keeping the experiences unique, John Boris, CEO of experience marketplace IfOnly, told PYMNTS in a recent interview.
“There is no ‘typical’ experience, and that is truly a positive when you look at the experience economy,” he said. “An experience is truly an individualized purchase. What is an amazing experience for one might not be for another.”
IfOnly seeks to compete in the space by offering experiences at all scales, from luxury events to localized classes in a consumers’ own neighborhoods. The marketplace is also taking a closer look at payments and mobile channels as consumers’ engagement preferences shift.
The Experience Economy and the Digital Marketplace
The experience economy is likely to expand as consumers place an increasing amount of importance — and spend more of their money — on experiences over typical retail goods.
“There’s no question that the experience economy is here,” Boris said. “It’s real, [and] there’s no question that people are placing greater emphasis on experiences than material things. And it’s not just millennials. I know that [the space often] gets lumped with millennials, but it’s really cross-generational. People want to create memories derived from experiences.”
IfOnly’s platform is designed to deliver experiences across multiple price ranges. Vendors on the seller or “luminary” side can simply sign up through the company’s vendor portal. Meanwhile, consumers can seek out experiences that range from lessons at a local glassblowing class to dinner with a celebrity. They can either purchase experiences outright, bid for them or enter an experience sweepstakes. Luxury experiences are more likely to be offered though auctions and sweepstakes, while localized offerings typically stay within lower price ranges. Boris believes this multitiered approach gives IfOnly a competitive edge.
“There are some sites that are just offering experiences through sweepstakes and some that are just offering experiences through auctions. The fact that we are local and luxury and have three different modalities … that is the suite of services we offer that sets us apart from the rest,” he said.
IfOnly continues to innovate its platform, though, especially when it comes to payments and social media channels. Boris said much of its user traffic flows through its mobile-optimized website, and that it is currently staying focused on its mobile channel instead of exploring a native app.
“The question I think lots of companies face is native or mobile web, and for us we were concentrating more on creating a seamless mobile web experience than an app experience,” he said.
As for payments, the real challenge remains keeping them seamless while protecting both sides of the platform from fraudsters. The company does not yet support payments through mobile wallets or other alternative methods.
“We don’t really have a lot of mobile wallet [support] right now despite having a lot of mobile users for our customer base, and the reason is that we’re primarily credit card-focused,” Boris said. “Part of that is a lot of these are big-ticket items, particularly on the local or luxury side, and dropping $20,000, $30,000, $40,000 is a little bit more comfortable to people on a credit card than another form of payment.”
Nevertheless, IfOnly is paying close attention to customers’ payment preferences, and plans develop more personalized “shopping” experience as the economy grows.
AI and the Future of the Platform Economy
Many platforms are looking to advanced learning technologies like artificial intelligence (AI) for more personalization as competition in the space grows. AI can quickly and efficiently catalog new data and personal trends to provide better recommendations for consumers. IfOnly does not yet plan to implement AI, but the platform could potentially utilize the technology in the future.
“Every marketplace is looking into making the experience more personal, more directed,” Boris said. “We do leverage several algorithms to help refine the experience to [customers’] needs, but there’s always room to do more.”
There’s no question that consumers are increasingly turning to marketplaces for personal experiences. Marketplaces must keep a careful eye on changing customer needs to remain competitive in the platform economy, whether that means participating in the experience economy or customizing selections.