No. 285: The End of Ownership

Ownership
Scene: the perfect vacation experience, fueled by rented products.

Go on vacation and you’ll undoubtedly encounter at least one couple who snaps photos of their perfectly manicured brunch experience. They took an Uber to get to the general area, asking the driver to play their favorite Spotify playlist for the 17 minute drive. Rather than walk the final .7 miles, they both grabbed Bird’s to the brunch spot. Hey, it was more scenic and memorable that way. The husband followed along so that he could snap the perfect candid shot of his wife’s Rent the Runway dress billowing in the wind. And when they finally arrived to their seats, he snapped another photo of her with their DSLR from Parachut. It was the picture perfect experience.

Let’s breakdown access vs. ownership: 

  1. Rather than drive their vehicle, they accessed an Uber.
  2. Rather than listen to their music, they accessed a Spotify playlist.
  3. Rather than walk .7 miles, they accessed a Bird scooter.
  4. Rather than own the dress, she rented it from the runway.
  5. Rather than buying the iPhone, the husband has access to one through AT&T.
  6. Rather than configuring his own DSLR, the wife sourced one through Parachut.

But the memory of this was very much their own. They owned that memory and it’s well documented in the place where America stores their moments: Instagram. A place that keeps what we really care about owning. Above all else, we care about owning great moments. The couple accessed rented goods to own an experience.


Issue No. 265: Can A DNVB Achieve Modern Luxury

Buying experiences over buying consumer goods is a trend being adopted by the luxury-set. The interpretation of the word luxury means something altogether different for the types of customers who have the means and awareness to shop with DNVB brands. Skift’s latest research shows a clear shift in demand for more transformative travel experiences among upscale travelers (Skift / May 2, 2017). Whereas expensive products used to be the consumer desire: products, community, and service now play the role of enabling experience economy.


What’s the access economy? An economy driven by a business model where physical goods and services are traded on the basis of access rather than ownership: it refers to renting things temporarily rather than selling them permanently.

If you ask Joe Fernandez, CEO of Joymode, he’d tell you that a consumer revolution is coming. This belief is an increasingly popular sentiment held by founders and executives of the companies fueling the access economy. And there’s validity to it. Consider sector startups like: Rent the RunwayArmarium, Parachut, and For Days. These startups provide hard goods in exchange for a monthly subscription fee. For consumers, this shift isn’t just about personal economics or reducing the cost of ownership. It is a redefinition of what it means to “own” and whether or not permanent possession of a product is more valuable than access. Some would argue that access is ownership.

BMW is testing it’s new program called “Access” of all things. Here’s an excerpt by Andrew Hawkins of The Verge:

For $2,000 a month, users can choose between models like the X5 SUV, 4 Series, and 5 Series sedans, including all plug-in hybrid versions. For the higher-tier $3,700-a-month fee, they can get M4, M5, or M6 convertibles, as well as X5M and X6M SUVs, but it doesn’t include access to BMW’s highest-end 7 series. The fee includes insurance, maintenance, and roadside assistance, BMW says.

Consumerism is a part of America’s DNA, it’s what drives us. It powers our national economy, it fuels international trade, and it incentivizes entrepreneurial innovation. But even a casual observer can understand how the accumulation of goods, accelerated by eCommerce, can have detrimental effects. Consider this passage from a recent article in The Atlantic, “We Accumulate a Mountain of Things.” 

Thanks to a perfect storm of factors, Americans are amassing a lot of stuff. Before the advent of the internet, we had to set aside time to go browse the aisles of a physical store, which was only open a certain number of hours a day. Now, we can shop from anywhere, anytime—while we’re at work, or exercising, or even sleeping. We can tell Alexa we need new underwear, and in a few days, it will arrive on our doorstep. And because of the globalization of manufacturing, that underwear is cheaper than ever before—so cheap that we add it to our online shopping carts without a second thought. 

In many ways, Joymode is at the forefront of the movement to alter consumer behavior, with respect to the concept of ownership. At first glance, it’s easy to look at Joymode and reduce them to an events company, a place to go to have fun. But only at first glance. Upon further exploration of their offering, you’ll notice the featured products are everyday items. The platform rents everything from an Oculus Rift set to camping essentials. There is access to products for events and products for everyday life. It makes you wonder. If this is where things are going, how many products do we really need in our closets, cabinets, and basements?

Screen Shot 2018-09-04 at 12.30.52 PM
Essential products. Do we need to own them?

There is a massive backlash coming in the form of a cultural shift in how people consume. I love that we get to be a part of it. This weekend more than 15,000 products left the Joymode warehouse and it will all come back and go to different families next week. There are massive amounts of people fed up with the cycle of debt, clutter and waste.

Joe Fernandez, Cofounder and CEO of Joymode 

Fernandez, the former founder of Klout, is adamant about what he believes to be the future of ownership. He may have a tougher task ahead, when compared to companies like Rent the Runway. The barrier to entry in seeing value in paid access to clothing may be slightly lower than that of common household goods. But our analysis indicates that we will see more brands entering the rental service space. It’s no longer just about cost basis reduction.

There are numerous macroeconomic indicators that bolster Fernandez’s views: accelerating urbanization, increases in the housing rental community, millennial debt loads, the growth of streaming entertainment, and even how we travel. As a consumer, you will own fewer things. But those accessed items will be personalized to your specific needs.  People are beginning to redefine the need to buy because access is, in effect, ownership. It’s the community of like-minded consumers that they’re buying into. They’re paying for more than access to products. They’re paying for access to a collective who believes in an ideal. And that ideal could change retail, for better or worse.

By Web Smith | Edited by Meghan Terwilliger | About 2PM

 

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