The future of ownership
How brands can capitalize on the emerging ownership scenarios
Welcome to the Sociology of Business. The Sociology of Business offers a paid membership program. Paid options are for the members of this community who want to be the first to access everything from Web3 brand-building to the new business models and emerging creative formats. Since its inception, the Sociology of Business has been the source code for many other analyses, strategies and brand-building approaches. Members will now have the front-row seat. If you are not yet subscribed, join the community by subscribing below and joining the Sociology of Business Discord. You can find my book, The Business of Aspiration on Amazon and you can find me on Instagram and Twitter. For those new here, in my last analysis, Web3 strategies for brands, I explored how brands can make digital products, hybrid products and distributed ownership part of their market expansion strategy.
When I was in London this Spring, I stopped by Selfridges’ vintage store. They had an entire racing car-themed rack, where I found a delightful men’s motorcycle jacket. The jacket was a little big, so I didn’t buy it straight away. When I returned later, it was gone. My first thought was, “well, at least I took a photo of it.”
We are in the new age of ownership.
Web3, rental services, group buying and secondary marketplaces are all creating alternatives to the individual ownership. These new ownership models impact how brands market their products and services, how they retain and reward their customers, and how they can launch and manage the new business models and revenue streams.
Most of companies today focus on individual ownership. They market and sell their products and services to individual customers, who then individually consider, evaluate and make their purchasing decisions.
In the past decade, this model has been deemed less and less environmentally, socially and economically attractive. As the new types of ownership emerge, we have the opportunity to evaluate the ideology of individual ownership and to explore the viability of its alternatives.
The 5 types of ownership are: individual ownership, temporary ownership, shared ownership, fractional ownership, and token ownership. Each has its own operating logic, ideology, value system, organizational structure, and currency.
Temporary ownership. Temporary ownership (rentals) has been a rapidly growing market, in categories from real estate to apparel, cars, handbags and accessories, tools, and kids wear. Temporary ownership in certain categories, like fashion apparel and accessories, and with certain demographics and locations, is replacing or greatly complementing individual ownership. For example, the online clothing rental market currently has YoY growth of nearly 26% and is expected to reach $3bn.
Shared ownership. In shared ownership, a group of people co-own the same item, and the item is utilized in rotation among the group members. This scenario is particularly viable for small and intimate groups of friends, who share taste and know each other well enough to share jewelry, watches, handbags and clothes as well (if they are the same size). Access to the item is mandated by ownership share: members of the group that paid more get proportionally more access to items (they can have them for longer) and/or have preferential access (get to use them first). Shared ownership of private planes and helicopters or second homes and luxury accommodation is allocated based on this membership dynamic. For companies, group ownership opens up new revenue streams, customer relationship management tactics, and loyalty programs. With group ownership, customer acquisition is cheaper (because consumers recruit their friends) and merchandising is demand-driven. Group ownership has a potential to increase the average order value, because customers can afford to buy higher-priced items due to joining their resources together.
Fractional ownership. Fractional ownership features “consumers-as-investors.” In this ownership scenario, purchases are regarded as investments and items are managed as assets. Items can vary from rare wines and sneakers to NFTs and artworks, and ownership fractions are traded as stocks on the stock market. Platforms like Otis, GOAT, SNKRS, Rally Rd provide fractionalized ownership. Once an item is resold, its owners share the earnings proportionally to their investment.
The rest of this analysis, including the 2x2 matrix outlining the benefits for brands and specific examples, is for paid subscribers. Choose a paid subscription option to read.