Today’s consumer landscape is witnessing a pivotal shift away from traditional ownership towards an access-based model. Rather than outright owning goods and services, people prefer to simply have access to them. Access-based consumption means engaging in transactions where ownership does not change hands. Instead of owning physical copies of DVDs or CDs, for example, people subscribe to streaming services. Consumers can access a wide range of products without the burden that comes with traditional ownership.
This approach is closely associated with the sharing economy, which encourages collaborative consumption. This involves sharing, swapping, and renting resources, eliminating the need for personal ownership of these goods. The term “sharing economy” came into use after the 2007 financial crisis as people sought alternative ways to access goods and services, but started gaining more widespread usage in 2010 and 2011. The sharing economy is growing exponentially. It is projected to reach a market volume of $335 billion by 2025. This indicates that the way we consume goods and services has – and continues to – evolve significantly.
At a time filled with economic instability driven by a wealth of factors, including the long-lasting effects of COVID-19 and the war in Ukraine, consumers continue to shift their consumption habits to align with these economic shocks. The access-based and sharing economy has emerged as a powerful response to these global challenges, offering a flexible, cost-effective, and more sustainable alternative to the long-standing paradigm of ownership.
And the rise of access-based consumption does not appear to be a passing phase. Rather, it seems to be an enduring form of consumption that is emerging in various industries, including transportation, fashion, and toys. Navigating the current economic landscape requires a solid grasp of these evolving paradigms. The rise of the access-based and sharing economy is more than a trend towards cost saving; it is about constructing a sturdier, sustainable consumption model.
What is driving the shift?
The growth of access-based consumption is driven by two main things. First, access-based consumption is predicated on the affordability, value, and convenience it offers to consumers. Participation in car-sharing services, such as Zipcar and Turo, are primarily driven by these factors. Secondly, access-based consumption provides environmental and social benefits by encouraging consumers to share and increasing the usage of a particular good. In the fashion industry, for example, rental services – from Rent the Runway to London-headquartered Hurr – allow consumers to enjoy a variety of choices and gain access to luxury goods. These services are also beneficial for those experiencing body changes, like pregnant women, as clothing can be shared to reduce careless disposal.
Access-based consumption means there is a time-related aspect to the transaction, either in the form of duration of access or usage. Even so, this does not stop consumers from developing a sense of perceived ownership over a good or service. For instance, consumers may develop a sense of pride, attachment, and responsibility towards a shared community garden, and may gain social value from participating in this experience.
The same is true for the sharing economy: This social component also extends to peer-to-peer accommodation services, like Airbnb, with one study finding that the primary reasons American travelers used such a service included sustainability and connecting with community. Interestingly, that same study, conducted by Washington State University’s Iis Tussyadiah, also found that while service providers tout intrinsic motivations, such as promoting sustainability and building a community, users are also have extrinsic factors, such as affordability and convenience, on top of their minds.
What does this mean for businesses?
Businesses need to reimagine traditional profit strategies, resource utilization, societal impacts, and community relationships to better adapt to this shift in the economic paradigm. A few critical points worth considering include …
Rethinking profit: In an access-based economy, businesses need to shift their profit strategies from selling products to facilitating access. This calls for innovative approaches to monetizing services – such as tiered subscriptions, dynamic pricing, or pay-per-use approaches – thereby, creating multiple revenue streams while fulfilling diverse consumer needs.
Maximizing technological resources: The role of technology is central in orchestrating transactions, maintaining inventory, and ensuring a seamless user experience. In an access-based environment, businesses must harness tech advancements like AI, data analytics, and the Internet of Things to streamline operations. Investing in digital infrastructure is critical to success in the access-based economy.
Beyond revenue: Profit is not the only relevant metric anymore. The access-based economy focuses on sustainable practices and societal impact. Businesses can position themselves as conscious brands by promoting resource optimization and contributing to societal and communal welfare. This shift towards corporate social responsibility not only elevates a brand’s image, but also resonates with the growing consumer demand for ethical consumption.
The power of trust: Trust is one of the cornerstones of the access-based economy. Consumers need the assurance of safety, quality, and reliability before partaking in sharing transactions. Businesses can foster trust by implementing transparent practices, rigorous quality checks, and responsive customer service.
The future of consumerism
While ownership does offer consumers unique benefits, including enhanced autonomy and a stronger sense of consumer identity, it is clear that we are shifting away from this model. As consumers and businesses navigate and adapt to this new landscape, we are not just witnessing a change in how we consume, but in how we perceive value, community and our roles within it. This dynamic shift towards an access-based model – fueled by both intrinsic and extrinsic motivations – is driven by the idea of a shared future built on access to goods and services, improved efficiency and collective value.
Seung Hwan (Mark) Lee is a Professor and Associate Dean of Engagement & Inclusion at the Ted Rogers School of Management at Toronto Metropolitan University.
Omar H. Fares is a Lecturer at the Ted Rogers School of Retail Management at Toronto Metropolitan University. (This article was initially published by The Conversation.)