[Jeon Youngsoo's Population Prism] Consumption Trends of the Youth Generation 'Experience Consumption'... Propose Intangible Value

The complexity of Korean society deepened further in 2020. To the constant variable of population change, the novel coronavirus infection (COVID-19) was added as a new factor. Uncertainty increased. Decision-making became more difficult. The government, companies, and households all faced a thick fog of confusion. Nevertheless, growth beyond mere survival remains an unchanging truth. An innovative strategy that turns crisis into opportunity through contrarian thinking is urgently needed. Therefore, understanding the times is crucial. Just as a small flap of wings can become a great typhoon, the key lies in capturing the mechanisms of future change through analyzing the small, everyday needs. Above all, reading people is critical and urgent. This is because the 'new humanity = new customers.' Among them, the youth population is a symbolic group that will reshape the future consumption landscape.

Youth have changed. Applying old standards does not capture them well. Moreover, they are a generation familiar with new, unpredictable life and consumption perspectives. They are close to a peculiar population that is difficult to grasp or understand. Yet, they cannot be neglected. No matter how small their numbers, they are the main consumers of future markets, so embracing them is natural. As they age, their unfamiliar consumption desires will expand into powerful universal needs in the future. Companies that need to discover consumer desires face deep concerns. Only disruptive innovation and pioneering experiments are the golden keys to blue oceans. Persistent analysis and agile response are the points.

In this regard, one prominent consumption trend among the youth generation is 'experience consumption.' They tend to value usage over ownership and prioritize experiences over possessions. This has already been well established as a consumption culture in Japan.

The value of experience has grown. The shift in value from 'ownership to usage' has already begun. The consumption shift from 'things to experiences' is similar. The background lies in the cyclical flow of 'reduction economy → change in perception → rejection of things → minimal lifestyle → experience consumption.' As a mature society, the phenomenon of valuing qualitative over quantitative aspects is clear. This is especially true for those born from 2000 onward, amid the frenzy of housing price waves, deepening unemployment, and low growth. It is a fundamental abandonment of the desire for ownership. Therefore, purchasing and flaunting possessions are not favored. They do not sacrifice the present by mortgaging the future to have more. The alternative card leads to experience consumption. They prefer service experiences over product ownership. This is a new consumption intention different from previous generations. They are accustomed to purchasing the act itself while enjoying various experiences and services. Products must also offer new and unique impressions and satisfaction to be accepted. This is closely related to the recent popularity of organizational skills and minimalism.

Next Generation Prioritizes Experience Over Possessions
Value Shift from Ownership to 'Usage'
Trend Combining Population Change and Consumption Maturity
All Generations Are Potential Customers of Experience Consumption

Experience consumption is a trend combining population change (demand adjustment) and consumption maturity (advanced society). Beyond the simple functional effects of products, emotional value derived from experiences is emphasized. In other words, the focus is on special time, experience, and memories. Searching Google for 'from thing consumption to experience consumption (モノ消費からコト消費へ)' yields 3.82 million results (as of July 18, 2020). It covers travel, hobbies, food, parties, and even education (qualification acquisition), as well as spending time in comfortable spaces or costs for social participation. For example, travel is dominated by specialized products offering regional experiences or 'hokok' and 'hokans' (staycations). The background includes four factors: ▲progress of consumption maturation ▲experience value harder to choose than essentials ▲mental fulfillment of happiness and life satisfaction ▲diversification of values and experience sharing due to IT. Recently, it has even spread to time consumption. It is a specialized and segmented consumption intention of the youth generation to purchase the time itself to enjoy.

Successful cases are diverse. Although social distancing due to COVID-19 is an obstacle, the desire for experience consumption remains strong in cultural events such as concerts and plays, outdoor sports viewing, and travel. Survey results also show that 52% do not want to increase possessions, and 72% think spending money on learning and qualification acquisition is beneficial (JR East Planning, 2016). In short, material abundance is decreasing while mental abundance is increasing (Aizawa Securities, 2017). The word-of-mouth that experience consumption in virtual spaces such as social networking services (SNS) is newer, more fun, and more satisfying has also contributed. A representative example is Tsutaya Bookstore, which became a hotspot by providing various experience spaces beyond just selling books. The popular pub YO-HO BREWING, which competes with workshops, live music, and cooking events rather than just selling beer, is another example. Experience-type services proposing new ways to enjoy beyond wine sales (Kikkoman) and confectionery companies (Meiji) that created VR-based experience facilities to fully savor chocolate flavors have also emerged.

Professor Jeon Young-su, Graduate School of International Studies, Hanyang University

It is not only the youth population. Depending on the targeting strategy, all generations are potential customers of experience consumption. High-priced services aimed at middle-aged and older populations with disposable income are examples. The strengthening of experience services is supported by cases where cruise products sell out completely. After COVID-19, virtual experiences have also expanded. Adding VR technology to games and live events opens experience consumption beyond the limits of reality. VR travel and AI-based virtual dating have also begun. Successful cases providing experience value can be summarized as follows: ▲Love bus matchmaking connecting bus travel and on-site experience (Dokan Transportation) ▲Experience events linked to movie releases (Tokyo Disneyland) ▲Food making and shopping street experiences through walking routes (Namba Ebisubashi-suji) ▲Ring-making services helping customers create their own rings (Keiuno) ▲Large shopping malls combining shopping and experience by attaching link halls (Aeon).

The battleground for experience consumption is the retail distribution industry, where face-to-face sales are fundamental. So, what are their success strategies for experience consumption? There are four main types: ▲Experience and participation type (collaborating with nearby businesses and communities to provide experience opportunities utilizing location characteristics for customer attraction) ▲Tour and theater type (offering factory tours followed by meals in attached restaurants, emphasizing sightseeing by providing both product sales and experience consumption) ▲Instagram-conscious type (creating a friendly environment considering posting on SNS, including staff response and cleanliness) ▲Time system type (providing long-duration shopping with comfortable chairs, sofas, and spacious spaces).

Experience consumption is directly linked to the sharing economy. Preference for experiences aligned with trends through sharing and renting rather than high-cost mass ownership can spread. Just as the three sacred treasures of the high-growth era?refrigerators, washing machines, and black-and-white TVs?quickly transitioned to the household essentials of 3C (color TV, air conditioner, car), experience consumption can expand through changes in perception and experience sharing. It is difficult to stimulate consumption desire with only the functional value of things. The era of abundance with everything is replaced by a new consumption style oriented toward values. Unique and differentiated experiences and memories are inevitably valued more than possessions everyone has. Korea is just beginning. The emergence of new customers armed with changed values and consumption intentions has started. Population changes intertwined with changes in the times create new consumption landscapes anytime. Preemptive and microscopic consumption proposals for future business, read from subtle current changes, are required.