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Selling Experience not Ownership

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Author: Samantha Mansfield

October 12, 2021

Despite what some in tech punditry would have you believe, the ‘sharing economy’ is much older than the early 2000s. The first recognised library, to share knowledge and wisdom, has been dated to the 7th century B.C. That said, the rise of companies like Uber, Airbnb and Zipcar at the start of the millennium certainly proved the retail worth of the model.  

At a very basic level, the sharing economy is about selling the use of a product, not the ownership. Take Rent The Runway as an example. Jennifer Hyman and Jennifer Fleiss have built a successful business by selling the use of high-fashion clothing without the expense and maintenance of actually owning the items. 

Advantages of a sharing economy 

Let’s take a look at the key advantages of the concept that make it the right time for retailers to consider the approach: 

  • Subscriptions on the rise – In the last decade, the subscription economy has grown nearly 6x (more than 435%). Customers are getting more and more familiar and comfortable with the appeal of receiving goods and/or services on a reoccurring schedule without the hassle of research, consideration and making a new purchase each time something is needed. 
  • Sustainability to the fore – Customers are increasingly concerned with the impact that consumerism is having on the planet. In particular, 79% of Gen Zs across 18 countries surveyed by Global Web Index (GWI) stated that companies behaving more sustainably is more important now following the pandemic. Companies like Bundlee are using a ‘sharing’ model to reduce the environmental impact of constantly buying new baby clothing as your child grows. Their strong message on the sustainable benefits of using, but not owning baby clothing is resonating with customers – their subscriber numbers are up 350% since the start of 2020.  
  • Experience as onboarding – Getting to try out a product is a great way to determine its value in your life. Particularly for more expensive items and/or brands that aspire to ‘lifestyle’ status, offering a ‘no strings’ experience in advance of ownership can convince customers that they really do want to make an investment in your product. Think about skiing – most people start out by renting the expensive equipment first, to try the experience – before they decide if they value it enough to purchase their own gear. 
  • Spaces are available – Due to the string of forced store closures as a result of pandemic restrictions, many high streets have retail spaces available. There has been an increase in experiential retail opportunities that focus on the community and use of products and services rather than a more traditional transactional approach. These shared spaces are also typically local in flavour which resonates with a covid affected consumer base. In a recent study by Barclaycard, more than 9 in 10 people who have shopped locally as a result of travel restrictions will continue to do so. Having a local presence to sell the experience of your product is a great way to build ongoing loyalty and reoccurring revenue.  
  • Data in the wild – selling product use or experience in advance of ownership allows retailers to better understand the place and role of their product or service in customers’ daily lives. Knowing when, how and for how long a customer engages with your product can provide valuable product improvement ideas and personalisation opportunities. Both automated data-collection and person-to-person collection via clientelling apps for in-store experiences – think cooking classes for high-end cookware – can unlock insights into how to better tailor your product to your audience. Netflix is the leading example of how to ‘hyper’ personalise for success.  

Given the many benefits of the model, retailers should consider how they can sell the experience of their product or service, either through subscription models or in-store experiences, as a way to build customer loyalty, gain product insight, and put customers on a path to lifetime advocacy. 

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