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WHY YOU SHOULD RETHINK PRODUCT OWNERSHIP

Mon Jan 1 2020 Michael McQueen

‘Access is the new ownership.’[1]

With the recent dramatic growth of companies like Airbnb, Uber and Spotify, it is hard to overlook the common denominator linking multiple major industries. The concept of ownership seems to be aging into a thing of the past, as renting and borrowing become more legitimate solutions to everyday needs.

My colleague and fellow trend forecaster Steve Sammartino reflects on the significance of this new way of operating. ‘We are quickly moving to a world of access instead of ownership. Renting is cheaper than owning and so people are choosing to access things instead of owning them.’[2]

The earliest stages of this movement were seen in the shift from music ownership to streaming in the late 2000s. When Spotify and Pandora first came onto the scene, they challenged the idea of ownership by offering access to a library of music for a small monthly fee.[3]

PricewaterhouseCoopers has forecast that the sharing economy will be one of the most significant influences on our future economy – and the travel and tourism sector will be most affected. 

An example that epitomises this idea is the rise of Airbnb as a lucrative competitor in the travel industry. In August 2007, Brian Chesky and his friend Joe were both unemployed in San Francisco and trying to figure out a way to pay the rent. All the hotel rooms in the city were booked out for a big conference and people were desperate for somewhere to stay. The entrepreneurial pair figured they had three unused air mattresses and could whip up a pretty good breakfast, so they decided to create their own low-end bed and breakfast.[4]

Fast forward to today and Airbnb is worth twice as much as hotel giant Hyatt and has over 4 million listings[5] in 34,000 cities around world.[6]

If we examine the automotive industry, the move from ownership to accessibility becomes even more dramatic. One business analyst recently predicted that owning a car in 30 years’ time will be like owning a horse today – something you do if it is a personal interest or hobby but not as your primary means of transportation.

Tony Seba and James Arbib of the think tank RethinkX predict that by 2027, Uber-style vehicles will make up 60% of vehicles on the road. As Seba put it, ‘People simply won’t own cars. The Ubers and GMs of the world will own the cars, and they’ll be in use constantly, which will drive down the cost of each ride to a point where it will be economically irresistible to consumers.’[7]

When you consider that, according to recent research, cars today are driven just 4 per cent of the year, yet cost on average $9000p.a,[8] that economic irresistibility becomes even more realistic.

The early stages of this move to mobility-as-a-service is being seen in a trial initiative called ‘BOOK by Cadillac’. Likened to a Netflix-style solution for car ownership, this auto subscription service gives members access to a fleet of cars for $1500 per month – a fee that covers all the costs of car ownership but without the liability of actually owning the asset. There are no mileage restrictions on users and no lock-in contracts for members. While the program has faced some teething issues in its implementation, GM’s goal is to scale it significantly in the years ahead.[9] Other carmakers such as Volvo have quickly followed suit with their own subscription services.

In the world of fashion similar changes are afoot. Toronto’s Boro Clothing offers users instant access to a wide variety of member-owned quality garments that they can wear once and then return. The company handles all repairs and dry cleaning while giving owners peace of mind that they will be compensated if garments are destroyed or irreparably damaged. With prices starting at around $30 for a four-day dress rental, it’s easy to see the attraction of a service such as this. Other services such as Rent the Runway offer similar subscription plans for clothing.

In the less glamorous world of hardware and lighting, electrical giant Philips have adopted a lighting-as-a-service model where customers can pay by the hour for the lighting they use rather than invest in the hardware up-front. 

Steve Sammartino further explores a significant and surprising impact this trend will have in its effect on the labour market. Beyond mere goods and services, people are beginning to be  seen as rentable assets too. In what’s becoming known as the ‘freelance’ or ‘gig’ economy, ‘Companies now access employees as contractors and ‘projecteers’ working on a number of projects for ourselves and for other companies, renting out core competency to the market when it is needed.’[10]

Using just a few case studies, we have covered the industries of employment, travel, tourism, housing, driving, music, clothing and hardware. Including some of the bigges essential purchases that individuals make in their lives as well as the most commonplace everyday purchases, there are few areas left unaffected by this trend.

While some celebrate access over ownership as the best expression of neoliberalism – encouraging free flow of goods and services in market without government regulation[11] – we must acknowledge the fact that asset ownership underpins the viability of countless industries and professions.

The fact is, if businesses do not change the way they think and sell, they are sure to be quickly left behind by a society that would rather access a product than own it.

So, how accessible are your products? If your business is still operating within the model of traditional purchases, it may be time to rethink the way you are promoting and selling your products, to ensure your business lasts the distance in an age of access over ownership.

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Michael McQueen is a trends forecaster, business strategist and award-winning conference speaker.

He features regularly as a commentator on TV and radio and is a bestselling author of 8 books. To order Michael's latest book "The Case for Character", click here.

To see Michael speaking live, click here and for more information on Michael's speaking topics, www.michaelmcqueen.net/programs.

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[1] Claburn, T. 2015, ‘The Sharing Economy: Access Is The New Ownership’, Information Week, 15 April.

[2] Sammartino, S. 2017, The Lessons School Forgot, Wiley, Milton, pp. 50, 51.

[3] Brynjolfsson, E. & McAfee, A. 2014, The Second Machine Age, Norton, New York, p. 111.

[4] Ross, A. 2016, Industries of the Future, Simon & Schuster, New York, p. 91.

[5] Hartmans, A. 2017, ‘Airbnb Now Has More Listings Worldwide Than The Top Five Hotel Brands

Combined’, Business Insider, 11 August.

[6] Ross, A. 2016, Industries of the Future, Simon & Schuster, New York, p. 91.

[7] Della Cava, M. 2017, ‘Self-Driving Electric Vehicles to Make Car Ownership Vanish’, The Australia Financial Review, 9 May.

[8] Colias, M. 2017, ‘GM Tries A Subscription Plan For Cadillacs’, The Wall Street Journal, 19 March.

[9] Colias, M. 2017, ‘GM Tries A Subscription Plan For Cadillacs’, The Wall Street Journal, 19 March.

[10] Sammartino, S. 2017, The Lessons School Forgot, Wiley, Milton, pp. 50, 51.

[11] Ross, A. 2016, Industries of the Future, Simon & Schuster, New York, p. 92.

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