Retailing in the Week Ahead, Week 31
I saw an ad for a car rental scheme in London last week. It was not your typical car rental. The ad said something like, ‘your neighbors are going to let you borrow their car – any car, even the car of your dreams. Join the club’.
What was my first reaction? It was not, how does this change shopping for the person borrowing their neighbors Ferrari for the day. It was, how does this change shopping for the guys who own a Ferrari that they no longer have unlimited/unhindered access to anytime/anywhere. I then promptly binge watched the Fast and the Furious franchise.
This has triggered some new thinking. I hypothesize that the effects of the sharing economy are less dramatic on those who are renting than they are for those who are owning. Do you agree? I would love your thoughts. Let’s break it down.
Three Investments – Home, Work, and Entertainment
My esteemed colleagues in Kantar’s shopper practices have developed a useful framework over the years that has stood the test of time entitled, “Time, Money, and Angst.” The premise is that shoppers invest elements of all three in every shopping experience.
- Time = the amount of time it takes to find the product, buy the product, and get the product where it needs to go.
- Money = the amount of money invested in the shopping process (not just the actual price of the product but all other fees associated such as transport costs/fuel and so on).
- Angst = the level of emotional energy spent while shopping which is difficult to measure but easy to feel when you are waiting 10 minutes in a line/queue to pay for that one apple you want at lunchtime while everyone else has multiple items in their baskets.
I personally love this framework and think that a similar framework can be used to explain how disruptive business models change shopping for the ‘owners’ of assets in the sharing economy. Once again, I refer to my hypothesis that the biggest impact on shopping is not on those who do not own anything, it is on those who own something but are now sharing it rather than holding on to it. Therefore, I propose an additional shopper framework that supplements and fuels the Time, Money, Angst framework. I call it, “Home, Work, and Entertainment.” If you have a better name I’m open to suggestions.
- Home = The binary days of home ownership are over. We can no longer break households down into those that own their property versus those that rent. The sharing economy has opened a wide range of possibilities. Platforms such as Airbnb make it possible for people that own their properties to get some money back while they are on vacation/holiday. The result has been a breakdown in the number of households that ‘stock up’ their kitchen cupboards and fridges for one simple reason: Those guests that are coming in to spend the weekend might dip in to the cupboard! Therefore, we need some new thinking around not just home ownership but also homes that do or do not do home sharing.
- Work = Likewise, the gig economy has opened a range of possibilities for how to make money using a set of skills that are needed not by one company or client but many. There are many websites that aim to connect clients with pros but the biggest obvious change is the proliferation of work sharing spaces such as rent-by-the-day offices and other locations for small business owners and entrepreneurs. Traditional employers have responded by creating flexible working platforms of their own. The result has been a breakdown in the number of households that ‘work’ in one physical location day-on-day, week-on-week. Therefore, we need some new thinking around not just employment status but employment location and impact on shopping.
- Entertainment = Finally, the sharing economy has enabled households to entertain themselves on-the-go using platforms like Netflix to watch, Kindle to read, and Spotify to listen. The idea that you will catch shoppers’ attention while they sit on the couch watching television has evaporated. Nobody has come up with a way to share a concert or sports ticket yet where I get to watch the first half of the game and then at half-time I give my seat to you but innovation is on its way. The new Tottenham (yet-to-be-sponsored) stadium is equipped with a glass viewing area where fans can pay to watch players as they go down the tunnel from the locker rooms to the playing pitch. Therefore, we need some new thinking around not just disposable income versus non-disposable income but around entertainment-at-home versus away-from-home and its impact on moments of truth when it comes to discovering products and services.
Nearly everyone I talk to accepts that societal pressures are changing the chemistry of the Time-Money-Angst framework with more and more consumers valuing Time-Angst in their decision frameworks related to where to shop and how to shop. As an addition to this acceptance, I hope you will begin to think more carefully about the ‘Home-Work-Entertainment’ framework in that these innovations probably allow consumers to have their cake and eat it too. The decision to eat away from home versus at home used to be primarily a ‘Money’ decision in years past. If you wanted to save money you stayed home. Will this always be the case in the future? What happens to this equation when you return home to find your Airbnb guests left you a fridge full of goodies? What about a food sharing service where a restaurant gives un-used food to the aggregator service and then members get to share the bounty?
Please review articles/insights you may have missed from Week 30 using the links below.
Key Retail IQ Publications from Week 30
Good luck in the week ahead,
Ray Gaul – firstname.lastname@example.org | @RayGaul on Twitter or @KantarConsulting | Linkedin