Market Leader
Issue 29, Summer 2005
How Important is Ownership?
Chris Middleton
Sociovision Ltd
Recent research suggests the place that possessions occupy in our lives is changing, slowly but surely. Look back to the 1960s, for example. The mass market was built on the assumption that you worked hard, earned progressively higher salaries and bought more and more products that reflected your new money status. Today, selfactualising is about experiences, emotions, ethics and engagements – leaving less space for products.As in any change, there is opportunity for those businesses that read the new reality and react in ways which align to the world as it is. The danger for so many retail and fmcg businesses is that they ignore the signs – or read the signs but enter a denial phase. My contention is that, like so many social shifts before, the change in attitudes to ownership is going largely unnoticed; it is creeping up by stealth and the proverbial frog is dying in the slowly heating waters.
If you look in the right places, you can see the results of these demandside changes all around. Retailers had a bad Christmas and continue to publish poor results. Articles appear regularly signalling the urgent need to rebrand brands, turn them into 'lovemarks' or revitalise them into 'powerbrands'. Marketing becomes more desperate in its tactics to seduce people – to the point where its activities are regularly criticised by MPs, watchdogs and journalists. Sales become an accepted way to make year-end figures rather than simply the method to clear stock for the next season – with the evident impacts on margins.
And here's the rub. While marketing has undeniably become harder, most analysis ignores changes to people's values as a significant driver of the retail marketplace. Typical complaints are that 'the competition just got stronger' or 'housing values are no longer growing' or 'demand is now limited to replenishment due to high household penetration levels'. And, of course, if everything else fails, we blame the weather. On the other hand, we rarely hear, for example, 'Some people are now coming to the conclusion that enough is enough and that increasing the amount of material possessions they own is no longer a central value in their lives.'
THE CONSUMERIST PARADIGM
To state our conviction in even stronger language, we are convinced that the very assumptions of the existing consumerist paradigm are increasingly out of sync with everyday reality. Moreover, we observe that most of contemporary market analysis and market research is so rooted in these traditional assumptions that it is blind to changes at the edges.
We hear about 'identity morphing', 'hyper wants', 'tribal belonging' and 'buying bulimia', and these are presented as the trends driving today's consumer. But what if the truth is increasingly elsewhere? What if companies are continuing to measure the past rather than anticipating the future focus?
Sociovision's research indicates the consumerist value set is becoming passé and new life is burgeoning beyond the old world of purchase, prestige and property rights. We have been able to identify seven archetypes, each with a specific new take on ownership. Let's look at just two of these archetypes, which sit outside of the mainstream consumerist logic, and illustrate their impacts on businesses today.
LIGHT LIFERS
Light Lifers do enjoy material possessions. It's just that they see no need at all to pay for them. In an era when so many have so much, their strategy of beg, steal or borrow is perfectly practical. What counts for them is to be able to use things for more or less short periods of time; individual access is the door and networking the key.
The ramifications are considerable for consumer goods companies. Renting and leasing are frequent means to access, although borrowing, filching and sharing are even better. The idea of spending money to acquire something, frequently does not even enter Light Lifers' heads. Their philosophy of travelling light means being weighed down by longterm commitments and 'for ever possessions' is the last thing they desire.
What challenges do Light Lifers lay down for marketers? Car companies, in particular, are scratching their heads about the move towards rental. Equally, they are worried that an increase in leasing contracts is blurring the perceived cash value of cars. In the future, many will only know that their Ford Fiesta costs £199 a month, the total cost being hidden from view.
The travel industry is also feeling the effects of Light Life attitudes. Why buy a package holiday when you can design a DIY adventure around visiting distant family and friends? Finally, ever wondered why people use internet cafés? Well, if you have recently bought a home media system you will soon understand. Light Lifers may or may not have the money to buy a new HP tower, but subcontracting the configuration and maintenance to the internet café owners meets their footloose objectives. Renting a screen for half an hour of emailing is so much lighter than plug-and-pain.
RESPECTABLE REBELS
The Respectable Rebels have grown up in an era where bytes replaced atoms and where the web is the new marketplace. Respectable Rebels barter rather than buy; in the peer-to-peer world, what is virtual is virtually free. Do not speak to these downloaders about legality since this archetype believes in rebels' law, where possessions are shared and where the payment for a transaction is the investment needed to set up the software.
The music industry has taken the best part of five years to cotton on to Respectable Rebels. The industry first threatened Napster: then it bought and closed Napster; then it attacked pirates through the courts and only latterly has set up legal download sites. The film industry is likewise threatened and has yet to respond with official sites. Meanwhile, millions use emule, e-donkey and so on to build their film archives. Less obviously, Respectable Rebels were some of the first to pile on board low-cost airlines. The price was seductive, of course, but, at the back of their minds, it was so sweet to put one over on the national airlines that had milked the market for so long. This time they
did nothing illegal but rebellious thoughts were part of the appeal.
The other archetypes we discovered were as follows.
Financially Challenged: necessity drives these people to access not possess. Hand-outs and rental are frequent means of accessing consumer society.
Freeloaders: a group of individuals whose high-powered network is the source of their wealth. They are parasitic consumers rather than purchasers; it is more important 'to know than to buy' and 'to seem' rather than 'to have'.
Old Style Socialists: supporters of sentiments like 'all private ownership is theft'; people with this leaning want collective ownership and public service to distribute wealth equitably.
Pre-Materialists: these are people who have never been fond of possessions, emphasising a simpler, sometimes spiritual, approach to life.
Post-Materialists: experiencing and being are the leitmotivs of this cluster, who have gone beyond possessions and now 'invest in lives'. They do consume, of course, but always for higher motives and ethics.
ANALYSIS
Taken together, Sociovision estimates that these seven archetypes represent around 55% of the population. Put another way, only 45% of British society today believes in full-on consumerism as a way to live, a route to happiness and a reason for being. Furthermore, our time series research indicates that, over time, this percentage of white-hot consumers is slowly declining. Meanwhile, the most rapidly growing groups are the Respectable Rebels (which we estimate at 4% of the population) and the Post-Materialists (at 9%). Interestingly, while the Rebels, in common with Light Lifers, are younger in demographic terms, Post- Materialists tend to be older. The fact that some older people have turned their backs on serial consumption would seem to scotch any hope that this is a passing phase linked to carefree youth trends. Moreover, we are convinced that these value changes, which now replace consumption at the centre of many people's lives, are more permanent than many in our industry hope.
In conclusion, we believe current marketing faces a significant risk of being blindsided by social evolutions despite some clear signs of the consequences of change. So much seems to be riding on the uninterrupted and unmolested continuation of the consumer marketplace – and yet archetypes surround us that threaten this continuity. Each archetype, remember, has a radically different notion of what ownership is all about. Retailers and consumer goods companies would do well to understand better the emerging social shifts, and plan how to reconfigure as a consequence.
