What's the first word you think when someone brings up the business Blockbuster Video?
Out-of-business? Obsolete? Old school? Wasn't that in the Captain Marvel movie?
What if we were to tell you Blockbuster Video was ahead of its time? Really, it's too bad they couldn't have innovated to keep up with the technological shifts because, in terms of the trajectory of consumer behavior, Blockbuster Video was a trailblazer.
You see, Blockbuster Video figured out something that many businesses are just now realizing: consumers are willing to pay for access to a product instead of ownership of it.
Rent-A-Swag Is The THING Now
We now have clothing rentals like Rent the Runway. Consumers subscribe to Spotify and Netflix rather than buying music and movies. All while knowing once they stop subscribing they'll no longer have access to any of the products no matter how much money they spent on the subscription.
Along with entertainment and clothing industries, there's a rise in demand for rental properties and an increase in the use of car-sharing services and leasing.
Even businesses are investing in memberships to coworking office suites rather than long-term leases, let alone purchasing their spaces.
Is it What the Consumer Really Wants?
The increase in the use of subscription and rental business models isn't happening because businesses came together in some sort of conspiracy.
People still walk into Target and buy clothes. You can buy CDs and DVDs. Heck, you can even buy both online and short of an internet apocalypse own those products forever. The option for ownership is there, consumers are just opting for a rental set up at increasingly high rates.
Well. There's a lot at play when it comes to a complete consumer mindset shift. The fastest way to answer this question is to reverse back to you.
Look at what subscription services and rentals you're paying into and ask yourself why.
Generally speaking, there are a few major players in the rental mindset for consumers.
- Greater Sense of Altruism
- Technological Shift Making Traditional Ownership Obsolete.
Renting products over purchasing has a tendency to be cheaper. Perhaps not in the long run but the upfront costs of renting access to a product are going to be significantly lower.
This means customers can use more products of a higher value faster and more frequently than if they were to purchase each item individually. Access, then, is convenient.
Greater Sense of Altruism
With each coming consumer generation, we've seen an uptick in political and cultural awareness and with it the desire to contribute rather than consume.
This is why cause marketing is so successful. Consumers want their purchases to mean more than just buying a new pair of shoes.
Along with this altruism comes a desire to accumulate fewer things and a rental model allows for that minimalist approach while also giving access to necessary and even luxury products.
Technological Shift Making Traditional Ownership Obsolete
Finally, there's been a huge shift away from traditional ownership with an increase in digital content and products. Often, digital products need updating and access outside of any initial purchase. Thus, the consumer never fully owns that product because they need someone else to maintain and give access to said product.
This can be frustrating to some as they want more control over what they can and can't do with items they've purchased. But at the same time, the convenience of access overtakes that frustration.
A good example is the set up of Kindle. On a Kindle, you can purchase and store a nearly endless amount of books. You buy the book, you own the book.
But unlike a traditional hard copy, you can't lend it to a friend or when you're done with it sell it to a used book store. It's not completely yours. You've just paid to have access to it on your device.
Businesses need to be exploring new business models to tap into this consumer shift. You need to be looking at what your business offers its customers and ask where and how you might implement renting into your strategy.
This isn't about taking advantage. It's about understanding the consumer mindset and today's consumer is looking for access rather than ownership.