Why digital experiences will drive digital identities

There’s no longer a singular definition of what an experience is

Over the last decade we’ve seen a paradigm shift play out driven by the increasing value consumers place on “experiences”. When many speak about experiences in this context they mostly discuss physical experiences — travel, in-person concerts, physical pop-ups, etc. Digital experiences are often ignored.

A growing subset of consumers (largely gen-z) has come to spend the majority of their resources on digital-first experiences. Right now that’s mostly limited to spending time — on Twitch, Minecraft, Fortnite, etc. One might assume that this subset will move on to physical experiences as they gain more purchasing power. It’s possible, however, that this subset inherently values digital-first experiences more than others do. If that’s the case, it’s logical to assume that new consumer spend would be directed towards more digital experiences, and with that, we’ll see digital-first experiences grow in quantity and quality.

We’re seeing some of this play out, with organized events happening on Minecraft servers (like this music festival, or this one) and some gamers describing Fortnite as a place to “hang out”. Of course, online events have happened for decades, but recently it seems these events are growing in frequency, complexity and participation levels. Consumers are also coming away enthusiastic about more than just the novelty of having them.

How experiences drive identity

I see this trend as a driver for companies at the identity layer (i.e. avatar companies, AR capture tools, digital goods platforms) as well as the infrastructure layer (i.e. VR / AR headset companies). I think digital experiences need to improve before digital identities become a part of mainstream life.

Currently, your digital-self mostly communicates with others. As such, investing in one’s digital identity is mainly a form of expression. That’s not entirely how physical identities work though. Sometimes we purchase things for expression, other times we purchase things for function. For example, one might buy athletic shoes just to make a statement (expression). One might also buy athletic shoes simply for a function (i.e. to go running). Most people look to accomplish a little bit of both (expression and function) with their purchases. Products that do this for your physical-self are easy to find, products that do this for the digital-self are more rare.

I see a similar dynamic evolving around digital identities as experiences grow. Absent experiences, identities will largely follow the 90 –1 rule of creation and consumption. As digital experiences grow, investing in your digital self will come more naturally.