Secret Marketer: Consumers are now more concerned with services than owning products

While people once pledged allegiance to a brand for its reliable products, customer loyalty is no longer guaranteed.

Regular readers will know that I am a bit of a traditionalist. As such, I am worried that we are heading into a minimalist age. I love owning my own music, for example. I bemoan the passing of LP covers and still like my thousands of CDs arranged alphabetically on the shelves at home.

I have around 8,000 C-90 cassette tapes in boxes, waiting patiently for me to transfer them to a current format. I have no fear that my music will disappear if I fail to make a monthly payment or a streaming company goes out of business or, most likely, that a new technology will emerge, rendering my music collection obsolete.

But I seem to be in the minority. According to the British Phonographic Industry (BPI) Yearbook, in 2003 the UK spent £1.22bn on physical formats of recorded music. However, in the past year, the recorded music market slumped to £730m with physical format sales a mere £365m.

Downloads have gone from zero to £283m and streaming from zero to £76.7m over the same period, with the latter predicted to overtake downloads in the next couple of years. And it is not just music – we appear to be entering an age where people don’t seem to want to own anything. A growing number of Londoners (myself included) do not own a car – relying on Uber, car-sharing schemes or public transport instead.

It is a similar story when it comes to clothes. Apart from the more obvious wedding, funeral or awards party suite hire, an increasing number of people are constantly rearranging their wardrobes; buying new items and taking old ones to charity shops on a weekly basis. Alas my wife is far better at the former than the latter.

The rental housing market is booming, while home ownership remains static. The rise of the Kindle has severely dented the book purchasing market: print sales are down 26% since 2008, while e-books have grown from nothing to £563m.

In the business market, we have the growth of things such as cloud computing. No longer do businesses own huge mainframe computers and massive servers. Instead they rent computing capacity and storage, often from an unnamed international entity.

What does this mean for marketers? Instead of promoting goods, the focus is now on services. While people once pledged allegiance to a brand for its reliable products, customer loyalty is no longer guaranteed. Is this worrying or an opportunity?

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  • khalifahusain 28 Jul 2015 at 8:42 am

    Isn’t it an issue of a storage management rather than an ownership ? Instead of stuffing the capacity of the hard drive they like to go Clouds ? adding the economical factor, main reason of renting is that people cannot afford buying a house at the moment. 🙂

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