consumer value – Social Blog

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Since visiting museums became popular during the Renaissance (Findlen, 1989), the industry grown to 12.1 billion dollars (IBISWorld, 2019). Only in the last year, 10.2 million people visited Le Louvre in Paris, making it the most visited museum in the world (Louvre, 2019; Orme, 2019). Maybe due to tourism marketing, maybe due to real passion for the arts, or maybe due to the power of Beyonce’s clip with The Mona Lisa, museums remain a top cultural activity, as shown by a steady 2.3% yearly growth of the industry (IBISWorld, 2019). But in an age when Google Images can give you a better close up to a piece of art, how can museums make visitors have a unique experience while in their corridors?

The answer is to make increasingly sophisticated and personalized services, reinventing the entire museum experience. And this is something that can only be achieved through the use of technology.

In fact, there are several museums that have already started implementing technologies. For example, through a visitor system based on a Nintendo, Le Louvre is now able to track what areas of the museum are most visited, and what “art routes” are preferred by their visitors. Thanks to this, the museum can have an insight on the preferences of consumers (De Geus, 2018). Another example are the technology applications developed by the Spanish company Minsait for the Vatican Museums in Rome. Through the implementation of connected systems (IoT), Minsait has developed an app that not only tracks consumer visits, but gives real time recommendations on routes and collects data on real time reactions to the works of art (El Confidencial, 2019; Minsait, n.d.). Not only does this allow for improved security measures, but it allows for personal collection of reactions on each Frescoes of Michelangelo.

It is clear that big players in the Museum industry are already looking at ways in which to change the customer experience through the use of IoT and other technologies. But will these develop into a new business model? Some experts agree that increasingly personalized data gained through these technologies might lead Museums to new models. For example, de Geus (2019) proposes a “pay-per-view” model, in which museums would charge a pre-specified amount per art-piece viewed based on insights of the most popular pieces in the museum. His article argues that this model could be similar to the one proposed by Youtube and Spotify, in which artists gain royalty based on the visits. This sounds like a revolutionary business model, attractive to those visitors interested only in those highly popular pieces of art. But a small questions pops up; who will receive the royalties for Da Vinci, Velazquez or Picasso?

All in all, we can see that museums are jumping in the train of technology to maintain and grow value creation for their visitors. Benefits are not only growth in consumer insights, but improvements in security and art recommendations. Nevertheless, we cannot forget the core underlying values of museums; a place where to collect finest pieces of art, history, and culture, from which visitors can learn and and appreciate the art of others. If museums start building their expositions and art routes based on “historical” data (the art pieces currently known and popular), how will the public get to know the future Botticellis, Van Goghs, and Warhols?

Sources

de Geus, D. (2018). Here’s What a Smart Museum Could Look Like. [online] IoT For All. Available at: https://www.iotforall.com/smart-museums/ [Accessed 24 Sep. 2019].

El Confidencial. (2019). Bienvenido al museo del futuro. [online] Available at: https://www.elconfidencial.com/tecnologia/2019-09-16/inteligencia-artificial-iot-museos-vaticanos-bra_2151975/ [Accessed 24 Sep. 2019].

Findlen, P. (1989). THE MUSEUM: ITS CLASSICAL ETYMOLOGY AND RENAISSANCE GENEALOGY. Journal of the History of Collections, 1(1), pp.59-78.

IBISWorld. (2019). Museums in the US Market Size 2003–2025. [online] Available at: https://www.ibisworld.com/industry-statistics/market-size/museums-united-states [Accessed 24 Sep. 2019].

Louvre. (2019). 10.2 million visitors to the Louvre in 2018 | Louvre. [online] Available at: https://presse.louvre.fr/10-2-million-visitors-to-the-louvre-in-2018/ [Accessed 24 Sep. 2019].

Minsait. (n.d.). [online] Available at: https://www.minsait.com/es [Accessed 24 Sep. 2019].

Orme, S. (2019). The 15 Most Visited Museums In The World. [online] Culture Trip. Available at: https://theculturetrip.com/north-america/usa/articles/the-15-most-visited-museums-in-the-world/ [Accessed 24 Sep. 2019].

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Remember that book you loved reading? How you felt when you opened it and started a new chapter? Or that one professor that used to talk so interestingly you could not not pay attention to him?
When you imagined these things, you probably thought of a physical book and a professor in a physical lecture room, not about an e-book or an online course, right?

Products like books – aside from required lecture books maybe – are usually categorized as hedonic or experiential goods; people purchase them for the pleasure they get from the product (Chen & Granitz, 2010). Also, people tend to attach more emotional value to physical experiential goods than the digitized versions of those products (Waheed, Kaur, Ain & Sanni, 2014). Nowadays digitized versions of a wide variety of products exist, called digital information goods (Goh & Bockstedt, 2013). To give an example: sure, you can purchase a Beatles album straight from iTunes as a birthday present for your Uncle, but wouldn’t he be so much happier if you would give it to him on vinyl – given your cool uncle has a record player, of course.

Now, the question here is: How can digitized goods provide just as much emotional value (if not more) as physical products?

Note that the question is not whether hedonic products should be digitized at all, because, of course, it is way more efficient to carry around 500 songs on your phone, instead of carrying them around on CD’s. So, when we look at efficiency, digitization is a big help. Also, selling information goods like these can be very beneficial for companies. Creating that first product might be expensive and takes some time, but creating the second version is just a matter of making a copy and, consequently, takes very little time and resources. In other words, marginal costs of information goods are very low, meaning companies can enjoy a big profit marge (Brynjolfsson & Bakos, 1998). However, wouldn’t it be nice to be able to be just as happy about digitized products as you are about physical ones? If this can be achieved, this could have major effects on companies still producing physical goods that can be digitized, think of DVD’s – which have already lost a huge chunk of market share because of Netflix, HBO, etc. – postcards and even schools may be at risk somewhere in the unforeseeable future.

Efficiency of digital information goods. Source: https://theecoguide.org/books-vs-ebooks-protect-environment-simple-decision

One thing that can be done is to offer more customer value in the case of digitized products. For example, if you purchase that Beatles album – or any other album – through iTunes you get free extra’s such as little video fragments of behind the scenes footage. In this way, consumers get more value for their money, which might increase their happiness.
Although there is no solution to this problem yet, companies selling digitized hedonic/experiential products should try to get consumer happiness to the same level as consumers get from physical products in one way or another.

So, next time you’re thinking of sending someone an e-card, remember that they’ll probably be happier to see one on their doormat.

Sources

Brynjolfsson, E. & Bakos, Y. (1998). Bundling Information Goods: Pricing, Profits and Efficiency. Management Science, 45(12), 1613 – 1630.

Chen, S. & Granitz, N. (2010). Adoption, rejection, or convergence: Consumer attitudes toward book digitization. Journal of Business Research, 65(8), 1219 – 1225.

Goh, K. H. & Bockstedt, J. C. (2013). The Framing Effects of Multipart Pricing on Consumer Purchasing Behavior of Customized Information Good Bundles. Information Systems Research, 24(2), 334 – 351.

Waheed, M., Kaur, K., Ain, M. & Sanni, S. A. (2014). Emotional attachment and multidimensional self-efficacy: extension of diffusion theory in the context of eBook reader. Behaviour & Information Technology, 34(12), 1147 – 1159.

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