As our marketplaces shift to the access economy, retail could go along for the ride, and make billions.
Human beings have been bartering since the dawn of their existence. Before currency was created, around 600BC, cattle, sheep, vegetables, and grains were popular items for trading. Fast-forward to today, it seems we are experiencing a reconnection with our bartering roots. Americans especially, have spent the past few decades priding themselves on ownership, often displaying their consumerism habits in the form of their larger-than-life vehicles, their homes, and any other material item that could accelerate their status in this sort of consumerist competition.
Millennials, who lived in the big houses, and went to soccer practice in the big cars, aren’t buying it; any of it. Ownership is fading out, as our societies are shifting towards this idea of not being tied down, something called the access economy. But that doesn’t mean we aren’t still consumers… we are just learning to be more responsible about how we consume. With this shift, retail will also have to shift, as we can begin to see exactly how people will “buy” in the future and what they will expect from their sellers.
It Isn’t Just About Houses and Cars
The truth is that we all have (at least once) bought something we would consider a high-ticket item, that we used a handful of times and then put in a closet. According to Philip and Melissa Niu of Parachut, Americans spend $1.2 trillion annually on nonessential goods – in other words, items they do not need. Here’s a few other statistics the Parachut team wants you to know:
- There are 300,000 items in the average American home. 80% of those items actually go unused.
- In America, there are four times as many self-storage facilities than Starbucks, McDonalds, and Subway combined.
These statistics point us in the direction of why this access economy is growing in popularity. The idea of having access to the items we need, when we need them, for the amount of time we want to use them, really hits the top two consumer concerns on the head; convenience, and price. Parachut, starting with photography, audio and video equipment first, has the potential to be the Amazon platform of this growing access economy.
Major Pain Points Could Be Eliminated
I had to record audio for a convention I spoke at, and borrowed a device from a family member to get the job done. I had planned to buy this device when I got back in the states, but my experience with the device ended up swaying my decision in the opposite direction. Once I used the recording device, I realized it really wasn’t what I wanted (or needed) at all, and therein lies a huge lesson when it comes to retail.
Retail Doesn’t Allow Us to (Easily) Try Before We Buy
This is especially true when it comes to electronics and high-ticket items, which often makes these types of purchases stressful given the major long-term commitment buyers are forced to access approach will allow retailers to peel back one of the biggest pain points of shopping. This could be a better and more profitable solution than waiting until consumers force stores into showrooms.
Renting… Only Better
For some reason, no matter how many times Blockbuster dies, I just cannot not think of their model of renting when I hear the word. Renting, in it’s olden, black-and white days (as my children would say) came with stiff timelines and financial consequences. Renting in the new access economy is shaping up to be much more free with boundaries that are capable of flexing. This new idea of renting without time limits, is great. But there’s another element to freedom I want to point out also.
If retail can get this approach to access right, we can avoid the smaller “community options” that often leave us meeting in a dark parking lot to exchange (or buy discounted) goods from a seller in a blue Toyota at the back of the lot. Retail has the opportunity to cash in on a billions-rich growth plan, and to participate in something more mature, private, and clean, than the parking lot meetups.
Recurring Revenue for Retailers
Could this new economy approach be the win-win we are all seeking? The burden of ownership doesn’t stop with the individual, and if retailers can shed some of that ownership burden too, we will begin to see the creative opportunities grow. This will be the reward for our consumerism responsibility, better options to borrow, more access, more convenience,and all at prices we are happy to pay. Welcome to the potential future of retail.
Read the original INC article published on September 12, 2018.