The New World Of Ownership
In this time of rapid change and reassessment when many of society’s institutions have been turned upside down, it is only appropriate that the age-old concept of consumerism is also shifting. Consumer behaviors are demonstrating that there is less of a desire to actually own material goods and a greater desire to experience possession without the limiting nature of ownership and the burdens that come with it. Meanwhile, businesses are responding by providing consumers with solutions to satisfy temporary needs for everything from cars to digital music.
While this era of anti-ownership was initially driven by small businesses and start-ups, global brands are starting to take notice and providing consumers with alternative options to ownership.
In a prime demonstration of how society’s approach to ownership has been shifting, car-sharing has become popular over the last several years, given traffic in the world’s busiest cities and the rising costs of owning an automobile. This is especially true among the influential Millennial generation, which has shown a lack of desire to own cars -- they make up only 27 percent of all new vehicle sales, a decrease of over 10 percent versus 1985.
It wasn’t until this year, however, that larger, established global brands joined the car-sharing market. Volkswagen's Quicar project put 200 cars on the streets of Hanover, available for hourly rentals, while this past September BMW announced that its DriveNow electric vehicle car-sharing program would continue its international expansion with the introduction of 70 ActiveE cars to the streets of San Francisco for those looking to access a bit of luxury.
Quickly becoming as ubiquitous as car-sharing, bike-sharing is another viable alternative for consumers who can rent bikes to cover shorter distances on a daily basis. The model helps to address traffic congestion and the need for more eco-friendly methods of transportation. Joining other similar metropolitan programs, Australia’s Melbourne BikeShare is just beginning to institute the model in the Land Down Under. While its average of 519 daily rentals are a far reach from Paris’ Vélib's 68,477 daily ridership, the program is steadily gaining traction. Meanwhile, in New York, Citibank-sponsored Citi Bike will soon introduce 7,000 bikes at 420 stations across Manhattan, Brooklyn, and Queens in March of 2013.
Beyond alternatives to car ownership, some music services have made owning music less of a necessity. Competition has taken off in the streaming music industry, with Spotify and Pandora vying for a portion of Apple's iTunes success by offering access to extensive music libraries without the need for users to personally own music. Unlike the iTunes model, Pandora's 125 million users can listen to custom radio stations generated through their own preferences without needing to pay a single cent. Eliminating the ownership requirement means listeners are now able to access a larger variety of music that keeps up with their current preferences without fearing that their money will go to waste on records they quickly grow bored with.
According to The Wall Street Journal, following its update of the iTunes service this past September, Apple will soon be incorporating its own Pandora-like custom-radio feature in order to provide a more complete music platform. Beyond these examples, ownership models now exist for everything from tool-sharing to luxury handbag rentals. What may ultimately be the driving factor behind anti-ownership is economics. It simply makes sense for consumers to access exactly what they need for the exact time period they desire and do so without a weighty financial commitment.
From a functional standpoint, it is an attractive proposition for consumers who are given more options and only need to pay for what they need at the time. From an emotional standpoint, they are freed from burdens of ownership -- needing to pay for ongoing maintenance on their cars or guilt from items becoming obsolete, for example.
What does this era of anti-ownership mean for marketers? There's an opportunity for brands to provide solutions that better fit consumers' on-demand, per-usage needs. As Volkswagen and BMW have shown, the introduction of an anti-ownership model in your industry doesn't mean you automatically stand to lose. Consider how your business model can be reinvented to address this shift in mindset and behavior. Or, if the shift has not yet occurred in your industry, anticipate it and decide how you will profit from it.
Lastly, understand that consumers will be selective in what they choose to own and not own. If your business model still involves ownership, what will you do to make your product worth owning?