Las Vegas and the Experience Economy

In my previous blog post, we discussed the concept of the Experience Economy as posited by Pine and Gilmore in 1998. They identified several hubs around the globe that one could use to exemplify how the experience-based economy functions, including Tampa/Orlando, Los Angeles/Southern California, New York City, and Amsterdam. However, they specifically name Las Vegas as the epicenter of the Experience Economy.

While all these locations have grown out of a unique set of characteristics that provided the catalyst for the creation of the hub, one could argue that Las Vegas is the laboratory for how the Experience Economy all fits together. Unlike other examples, Las Vegas is not a collection of parts, but a holistic and systematic approach to the Experience Economy; and it starts with the story of Las Vegas.

How History Shaped Vegas

Las Vegas’ isolated desert location and unique offering of casino gambling in the early twentieth century positioned it as the place in the United States where it is acceptable to exist on the edge of what is considered socially acceptable. People visited Las Vegas to do “taboo” things (gamble, a weekend of debauchery, a quick wedding, or a quick divorce) and then return to their more “normal” existence elsewhere.

The mobster-wiseguy-meets-Hollywood-celebrity past also lent color and glamor which enhanced the taboo image of the city. The extravagance of the building boom of the 90’s and 2000’s morphed Las Vegas’ image with the addition of the greed of Wall Street replacing the machismo of the mob. Hollywood further added to the aura by making movies based on and in Las Vegas (Casino, Rainman and the Hangover series).

Finally, the bust of the Great Recession; a brilliant brand positioning campaign by the Las Vegas Convention and Visitors Authority (What Happens in Vegas Stays in Vegas); emergent social technologies; and acceptance of “taboo” as “normal” in American society have further morphed the global leisure psyche toward the ever-changing brand experience of Las Vegas. The result is that Vegas itself–the collection of individuals, companies, promotional and governmental entities–is an idea; and a culture of new and innovative experiences that demand repeat visitation. Without this change, Las Vegas would not exist.

Las Vegas as an Analog to the Internet

As noted in my previous article, the fundamental advantage that Las Vegas has is that it doesn’t sell a product at all. It sells a dynamic collection of products and services, which together create experiences. These experiences are delivered on-demand, to a diverse group of visitors in an ever-changing environment, just like the Internet. In short, Las Vegas is the closest bricks-and-mortar version of the Internet that we have.

Why is this important? The key is that Las Vegas is naturally mercurial and it embraced the model many years ago. Like the Internet, the only constant in Las Vegas is change. Services, or more accurately, experiences, are available 24/7 in Las Vegas, just like on the Internet. Providers often serve up their offerings in highly customizable packages, which provide alternates and add-ons, just like the Internet. These experiences are often marketed in a ubiquitous and seemingly ad-hoc system (signs, lobbies, service desks, street-side hawkers) that can easily adjust to the consumer’s demands, just like the Internet.

Las Vegas as an Analog to Branching-Storyline Games

Whether you’re looking at the tourist-focused Las Vegas Strip and downtown areas, or the myriad of local neighborhood venues outside the tourist zones, “it” is about crafting a readily available, individualized experience that most people already encounter in their online environments; and more specifically, in their online gaming environments. Branching storyline-driven games are a prime example. These popular games feature elements of choice and consequence, branching narrative, dialog trees, mission parameters and multiple endings. Today’s client desires that same opportunity and choice in their leisure experience. In other words, the real world must meet the virtual world in such a way that customers are able to create their own branded experience. In turn, the host business can then build loyalty and charge a premium for this experience. Pine and Gilmore explain in their Field Guide for the Experience Economy that “Experiences comprise elements across four experiential realms: Entertainment, Educational, Esthetic, and Escapist.” They further assert that the most engaging experiences richly draw from all four realms to hit the “sweet spot” in the middle.

The Future of Bricks and Mortar

Having identified the consumer’s experience as paramount in our current “on-demand” society, the focus then turns to designing spaces that will effectively incorporate and enhance this experience, enabling customers to achieve the “sweet spot” in their leisure pursuits. At the 2014 Global Gaming Expo, Steve Wynn addressed the fact that most Americans already live in a state where they have access to casino gaming, and he emphasized that a resort’s gaming opportunities cannot be the sole attraction for customers. Wynn said, “You got to give people something they’re willing to get on an airplane and submit to a body search for. That ain’t a slot machine, friends, and it sure as hell ain’t a baccarat table.”

As we look toward the future of gambling and gaming and therefore casino design, we need to have a clear understanding that the non-casino story has always been the story. In addition we must also recognize that the ‘games’ themselves are changing. Given the rapid rise and popularity of online gambling, E-Gaming and E-Sports, the focus must be on creating dynamic spaces that provide this increasingly dominant subset of customers with the ability to curate an experience similar to–or preferably better than–they can have right in their own living rooms. We believe that in order to fully engage today and tomorrow’s customer on an emotional level, we need to move away from the model of one large gaming/casino floor and create smaller, more intimate spaces that offer greater variety in the environment with a balance of aspiration with accessibility. By moving from one large energy experience to multiple, smaller energy spaces, more variety and choice for your customer is afforded and ultimately their experience is heightened and changed according to their demands.

Clearly, the Experience Economy is here to stay. However, it is important to recognize and understand that the terms like ‘experience,’ as well as ‘luxury’ and ‘gaming’ mean different things to different subsets of the general population. In an effort to more clearly understand our customers and their proclivity toward gambling in all arenas, YWS commissioned the marketing research firm, GfK Consumer Life, to conduct a market research study on gaming across the generations. In short, there is ample research to suggest that each generation active in today’s society has different reactions to and expectations of gambling, gaming, E-Gaming and E-Sports as well as the Experience Economy.

In my next post, I will share in detail what we’ve learned from the study, and how we can incorporate this knowledge into our client conversations and designs.