What: With the cost of life increase and inflation, many customers have seen that the cost of experiences (dining, concerts, travels) has increased, and are expecting a proportionate raise in terms of outcome.

Why it is important: As department stores are increasingly entering the experience economy, they need to be aware of the “extra mile” expected by customers if they want to charge premium prices for said experiences.

As the cost of entertainment and experiences rises, people's expectations for fun also increase. This can lead to quicker disappointment if the experience doesn't seem worth

the high price tag.

People are willing to spend more on experiences than physical goods, but expensive experiences don't always equate to greater satisfaction. Satisfaction depends more on meeting expectations. When money is tight, dissatisfaction with expensive purchases is more likely as people think of other ways they could have used the funds. Strategies like finding cheaper pleasures, focusing on the overall experience rather than just the cost, and mentally reframing disappointments can help counteract dissatisfaction with expensive experiences. But some letdowns can't be spun positively no matter what. People may still regret and feel disappointed by expensive experiences that fall short of expectations.

As both goods and experiences rise in cost during inflationary times, shifting spending toward experiences may increase overall satisfaction. But expectations need to be managed.

In summary, the higher the cost of an experience, the higher the expectations tend to be. This puts more pressure on experiences to deliver proportional fun and satisfaction relative to the price tag.

Experiences pricing: beware of the customer mindset change