Search vs. Experience Goods, and the Internet’s role

You may have heard about goods being classified as either a search or an experience good. The concept is not new, and was actually developed by American economist Philip Nelson. These classifications provide a working distinction between different types of products and services.

If you like/need examples of Nelson’s classifications, here are some.

Paper (notebook, copier, etc.) is a search good. Paper products can be easily be compared and evaluated prior to purchase.

Commodities are search goods.

A restaurant is, usually, an experience good.

A theme park is an experience good.

An experience good requires a user to actually experience the product/service to be able to evaluate it. This can include eating at a restaurant, sitting on a chair, or walking through a haunted house.

The Internet and search and experience goods.

The Internet presents a great opportunity for businesses with experience goods (restaurants, bars, dance clubs, theme parks, etc.) to take, and showcase, their experience online.

Not only will it reduce uncertainty amongst first-time users, but it can tap into people’s emotions, thereby creating a stronger bond.

Here is a restaurant Web site that, in my opinion, leverages the power of the Internet to create an experience while having a rather basic Web site.

Here is a great pizza place that does a terrible job of leveraging the internet to create an experience.

Disclaimer: I have been to, and would recommend, both of the restaurants above. I went to the first restaurant primarily because of its Web site. The second, not so much.

 

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