The best business results are customer-driven!
You’ll have to forgive me for butchering the metaphor, but it seemed the perfect way to describe the current trend wreaking havoc among traditional retailers: non-ownership.
In a very interesting article by Ibrahim Ibrahim published in The Economist’s Management Thinking Digest and entitled Sharing is the new ownership, a quote he included from Lynn Jurich of Sunrun Home Solar sums up this trend quite nicely:
“The new status symbol is not what you own, it’s what you are smart enough not to own.”
After an era of absolutely rampant consumerism that had us collecting as much stuff as we possibly could and by whatever means of credit that was available, the sheer weight of all of that stuff is simply dragging us all down. And as the trend pendulum swings away from individualistic materialism toward sharing and caring, a whole lot of consumers are looking for ways to enjoy the benefits of those material items but without the burden of having to actually own them. This trend might be spurred on by the bleaker reality of the new economy or it may be the result of a real shift toward an idealism of making the world a better and more sustainable place (and I suppose it’s more a combination of both). But either way, the result is undeniable. If you are in the business of simply selling stuff, you might need to rethink your business model or risk going out of business in the foreseeable future.
Take the popularity of downloading music rather than buying CDs for example. There is still a whole generation out there with literally piles of CDs, shelves of them literally lining the walls of their houses. A music lover would have hundreds, sometimes thousands of them. Often to the frustration of other members of the household – where on earth do you put them all? But these days a person’s entire music collection fits on a microchip or floats on a cloud. The fact that the CD would become practically obsolete because people were more than happy to stop looking like hoarders and free up some breathing space in their homes, added to the possibility of carrying that entire music collection around with them in their pockets, was something that unfortunately took the retail music industry far too long to accept.
This same idea has already had time to take hold across a lot more industries than just music retail. Everything from power tools to cars, and from toys to clothes, are being shared and traded these days.
The traditional retailer can look at this as a threat and just hope ignoring it makes it go away. But we all know what burying your head in the sand gets you. Why not see it more as an opportunity to do new things for your customers and find some interesting and creative ways to get on board?
The smart business is the one who can adapt to – and adopt – the change.