By Lacie Blankenship
The concept of “ownership” has, for centuries, been a fundamental tenet of marketing. Research in the field of consumer behavior has uncovered numerous benefits associated with ownership – a sense of control, risk reduction, and personal identification among them – but newer studies indicate that ownership’s impact may be waning. Explorations into the prevalence of the digital economy, resale platforms, and clothing and accessory rental services suggest that, in at least some cases, owning things may have lost its allure.
For Kelly Goldsmith, Professor of Marketing, Consumer Behavior researchers are in a unique position to explore whether society has reached the “End of Ownership,” a term used in a 2017 paper on personal property in the digital era. In her study “Ownership: Perennial Prize or Fading Goal? A Curation, Framework, and Agenda for Future Research,” published recently in the Journal of Consumer Research, Goldsmith and her co-author Cait Lamberton build a framework for ownership in the modern market, apply it to recent studies, and offer an agenda for future research.
Goldsmith and her co-author look at ownership from the perspective of liquid versus solid, both in terms of products purchased (e-books versus hardcover books) and means of purchases (mobile payment versus cash). Through this “liquid-solid continuum,” the authors unpack findings in 5 recent articles to “inspire the development of a cumulative knowledge base driven by these rich, important papers,” they write.
Sole versus Co-Ownership
The authors reference research from Sharing-Dominant Logic? Quantifying the Association Between Consumer Intelligence and Choice of Social Access Modes that examined preferences for “solid,” or sole, ownership (i.e., buying a house or car) versus co-ownership. The study found that individuals who opted for co-ownership have “higher trust in people, more robust trust in institutions, higher financial standing, and stronger propensity to save.” In other words, it seems that individuals drawn to co-ownership models like renting and leasing tend to be more comfortable in social exchanges that involve systems and guidelines that facilitate these arrangements and mitigate risk (i.e.: leasing contracts).
The “Pain” of Paying in Cash
The authors also point to the study “Paper or Plastic?”: How We Pay Influences Post-Transaction Connection, which examines the effect of using hard currency for purchases and its impact on the perception of ownership. The study found that cash payments result in more emotional connections for the buyer to purchases and the sellers themselves. The “pain of payment” associated with handing over cash, as opposed to the swipe of a card, may lower the potential for purchase and potentially have a negative impact on a buyer’s relationship with a selling organization.
On the other end of the continuum, “liquid” payments like credit cards may shorten the lifespan of purchase gratification. “The more we rely on liquid payment, the more ephemeral our relationships with our goods and favored brands may become,” the authors write. With this in mind, solid payments may be better suited for long-lasting exchanges.
Ownership Affects Relationships with Others
Buyer-seller relationships aren’t the only interpersonal bonds impacted by ownership. Another study referenced by the authors, Property Lines in the Mind: Consumers’ Psychological Ownership and Their Territorial Responses, found that “the more desirable a good, the higher likelihood that its ownership may lead to interpersonal damage.” Examples of such damage include territorial and defensive behavior, such as tipping poorly at restaurants, branding personal items to mark territory, or holding belongings close to the body instead of physically sharing. The authors note that “ the erosion of consumers’ preference for traditional ownership may bode well for consumers’ relationships and communities.”
How Should Marketers Respond?
The authors stress that marketing professionals need to pay special attention to the waning relevance of ownership.
For instance, messaging strategies will need to cater to the “access” (i.e., temporary/rental) mindset. Citing The Impact of Acquisition Mode on Expected Speed of Product Mastery and Subsequent Consumer Behavior, the authors present an example with online gaming and write that individuals owning an online game for a month showed less commitment to learning and mastering the game than those that were renting the same online game for a month. For marketers, pushing ownership may “weaken commitment to engage with the product,” whereas pushing a more liquid form of consumption, like renting, seems to leave consumers more curious to further engage and explore the product.
“Understanding the evolving psychology of ownership allows marketers to better predict and cater to consumers’ needs,” says Goldsmith.