Evidence that concepts of ownership are changing hits you each day on London’s streets. The thousands of Barclays-sponsored bikes available to hire supported more than 26m journeys between 2010 and 2013. This is a rental initiative that tapped directly into a desire for convenience without the hassles of possession.
There’s great freedom in this but also anxiety. Just consider the book, music and film industries, which have been forced to develop new models to cope with the disintegration of the physical, the rise of Netflix and Spotify and the resulting changes in what it means to "own" a product.
It’s a shift that’s caught the imagination of philosophers and novelists. Many, while happy to explore the range of ownership models available to people, display a sense of being uncomfortable with the move towards virtual products.
Here’s Lenny, the protagonist of Gary Shytengart’s Super Sad True Love Story: "Then I celebrated my Wall of Books. I counted the volumes on my twenty-foot-long modernist bookshelf to make sure none had been misplaced or used as kindling by my subtenant. ‘You’re my sacred ones,’ I told the books. ‘No one but me still cares about you. But I’m going to keep you with me forever. And one day I’ll make you important again.’ I thought about that terrible calumny of the new generation: that books smell."
This is exaggeration for tragicomic effect. However, while books might not smell nor become the favoured fuel for fire starters they, thanks in part to Amazon and Apple, no longer need to be "owned" or "possessed" in the traditional sense.
Consumers are driven by a desire for flexibility and freedom when it comes to products and services.
The expectations of ownership have also been stretched over the years with the growth of the "sharing economy". You can now rent a car by the hour, and pick it up on a street near you (Zipcar). You can share your home, renting it to another private individual (AirBnB). And it’s not just the big stuff – you can even share pets (borrowmydoggy.com).
The traditional model of individual ownership is changing. People no longer need the physical when the virtual will suffice. And when it has to be the physical then they are happy to share. Millennials are becoming commitment-phobes and brands need to think differently about their relationships with them. Consumers are driven by a desire for flexibility and freedom when it comes to products and services. Their expectations are high and their loyalty is low. So brands need to live up to these expectations rather than just hoping to tie people in for long term.
Brands getting ahead
Some brands have already taken note of this more liberated approach: Easy Gym offers no contract, low cost, pay as you go gyms and T-Mobile last year launched its no annual service plan "UnCarrier" for customers. Promoted with loud language to appeal to a young audience’s desire for freedom and non-conformity - "Don’t play by the rules. Break them" - the initiative has reportedly attracted 4.4m new subscribers in the US alone. The roll out of Smart Meters in the UK will also level the playing field in the utilities market stopping the penalisation of pay as you go (prepayment) customers and putting people in control of their energy usage and payment.
At the moment, this trend may be confined to high ticket items or services that traditionally demand a contract, but how long until IKEA will rent you furniture for when your family descend at Christmas or Selfridges will hire you a designer party dress? Recent data shows that commitment-phobia may not be a trend confined to Millennials. While 18- to 25-year-old consumers are 90% more likely than over 60s to have rented a product rather than bought one in 2013, renting is a growing factor across all age groups. And 27% of all consumers rented instead of bought last year, while 56% expect to in 2014, according to the Future of Retail report by Walker Sands Communications.
Consumers who increasingly prefer to rent, physical products becoming virtual ones and brands offering greater freedom to their customers. This all demonstrates that notions of ownership are shifting and that brands must loosen up if they’re to avoid becoming the next Kodak or HMV.