Innovating the Experience Economy: How Novel Technologies Transform Customer Experiences

Based on the concept of the experience economy, in this paper we develop a framework for novel technologies (i.e., artificial intelligence, augmented reality, and virtual reality) that companies can use to shape customer experiences. This conceptual work addresses key concerns about ethics, privacy, cognitive overload, alienation, and sustainability, responding to calls for a critical discussion of these issues. We illustrate how these technologies can be integrated into the experience economy framework and applied in retail settings to enhance customer experiences across the four experiential realms of entertainment, education, escapism, and esthetics. Specifically, we outline how these technologies fit into the experience economy and can create positive experiences across all four realms. Chatbots are used as a case example to illustrate the application of our modified framework. We propose a framework that could serve as the theoretical foundation for future academic studies exploring the impact of novel technologies on consumers’ retail experiences. Integrating AI, AR, and VR into the experience economy framework offers significant theoretical and practical insights into enhancing consumer retail experiences. These technologies provide new opportunities for creating personalized, immersive, and engaging experiences. By applying our enhanced experience-economy framework, companies can systematically explore the impact of using these technologies to improve consumers’ experiences.