Besides a squeeze on living space, other factors contributing to the trend for de-cluttering include the mood of austerity, the desire for sustainability, the demand for ‘just in time’ products and our ever more nomadic lifestyles. Increasingly, we will want to live our lives free from the heavy burden of ownership.
There will be a shift from ownership to access, from buying to hiring, from permanent possession to sharing, where people will expect to be able to buy goods on a temporarily basis. As Mark Zuckerburg said “Everything that can be shared will be shared”.
A good retail example of this is a typical household drill, which is apparently used for an average of 6 minutes in its lifetime. It has taken immense resources to produce that drill and many other similar products, so sharing makes more sense than outright ownership - from an environmental, economical and lifestyle point of view. Accordingly, community initiatives are beginning to appear which give neighbours access to goods that there is no need to buy and permanently own.
One such initiative is the ‘TechShop’ in Durham, North Carolina. This is a ‘tool library’ giving neighbours access to a huge selection of tools for any possible home improvement or construction project without needing to purchase those tools. Here is a significant opportunity for retailers to develop a model that would meet customer demand and also increase revenue through multiple ‘selling’ opportunities.
Brands and retailers will need to respond to the shift in customer attitude and behaviour. They will have to develop strategies and business models that meet this growing demand and recognise the shift from an asset-heavy to an asset-light existence - neatly summed up by Lynn Jurich's observation, "The new status symbol is not what you own, it’s what you are smart enough not to own."
Whether this development is called the sharing economy, temporary ownership or collaborative consumption, strategies are being developed across many categories - not just drills, and not just the well-known trendsetters like music streaming service Spotify and the car sharing club Zipcar (in the process of being acquired by Avis).
Fashion label Mud Jeans offers jeans for lease. For a monthly subscription of €5 customers get a pair of jeans to wear. When they wish, they simply return them for other members to use (after a thorough clean) or the factory will get them back and recycle the materials into a new pair.
At Drexel University’s library in Philadelphia a vending machine dispenses MacBooks so visitors need not carry one around and it’s easier to get hold of one when required.
‘Rent-The-Runway’ and ‘Bag, Borrow or Steal’ are two premium on-line fashion brands where you can hire high-end dresses and bags, respectively.
The sharing economy also presents opportunities to build communities around a brand or around a shared interest. There is nothing more powerful than a brand fostering a sense of belonging amongst its customers. Building on the idea of collaborative consumption, in the future customers won’t buy brands, they’ll join them!
From cars and computers to tools, cameras, jewellery, bicycles, watches, kitchenware, toys, baby ware and fitness equipment, brands and retailers will be expected to deliver on these new customer expectations. If they don’t there will be plenty of newcomers only too willing to disrupt the market.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
