Have you noticed concert tickets costing an arm and a leg? Or travel prices seemingly on the rise? You’re not alone. Welcome to the age of “Funflation.” This economic trend describes a shift in consumer spending habits, where people prioritize experiences over material possessions.
It’s a significant shift in consumer behavior, especially when inflation is squeezing people’s wallets. Admission prices for sporting events jumped 21.7% in May 2024 from a year earlier, according to the Bureau of Labor Statistics, and over 35% said they would take on debt to travel, dine out and see live entertainment in the months ahead, according to a report by Bankrate. The rise of funflation isn’t exactly new news, but this dynamic illustrates why experiences are so important for brands to embrace. People want them!
We can break it down a little further to understand the reasons behind this trend:
- Millennial Mindset: Millennials, now the largest consumer demographic, value experiences more than ownership. They crave memories and social connection over accumulating possessions.
- Experience Economy: The rise of the “experience economy” caters to this desire. Companies are offering unique and immersive experiences, from glamping adventures, to VIP sports experiences, to server this demand.
- Post-Pandemic Shift: The pandemic put a pause on travel and live events. Now people are eager to make up for it by spending their money on making memories that last.
What Does Funflation Mean for Brands?
Funflation offers brands a fantastic opportunity. Brands should adapt to this changing landscape and use experiences to tell their brand story or message.
- Focus on Creating Experiences Not Promotions: Think beyond just selling products. Can you offer experiences that complement your products?
- Highlight the Experiential Value: Market your products by emphasizing the experiences they enable. Is your new backpack perfect for weekend getaways? Does your coffee maker create a cozy café atmosphere at home?
- It’s Free!: Unlike sporting events or concerts, most brand experiences are free! This can give more strength to the moment created, and reward consumers with added value they may not have been expecting.
The Takeaway
There has been a shift in attitude as consumers prioritize experience over other things. Brands need to take on more of an experience mindset to cater for this trend. With the public ever more eager to live for the moment, now is a prime time for brands to shift experiential marketing into top gear!