In part two of our series sharing some of the Ellen MacArthur Foundation's most popular articles, we dig deep into the psychology behind why we like to own things. We’ll also explore the alternatives that the circular economy offers.
In part two of our series sharing some of the Ellen MacArthur Foundation's most popular articles, we dig deep into the psychology behind why we like to own things. We’ll also explore the alternatives that the circular economy offers.
Pippa Shawley 00:03
What does ownership mean to you? Maybe like me, you've got enough books at home to open a small lending library, but you're happy not owning a car. Or maybe your car embodies a sense of freedom status, or simply some extra storage space. However you feel the topic of ownership is a personal one. I'm Pippa, and in today's episode, I'm sharing an article written by my colleague Claire Murphy, senior editor here at the Ellen MacArthur Foundation. As a former psychotherapist, Claire was interested to learn more about the relationship between people and things. As we work to create a circular economy, we often talk about the need for circular business models, which can include things like product or service or sharing models. But these can sometimes be difficult for individuals who derive a feeling of safety and identity from ownership. There are many layers to the idea of ownership. And since Claire published the article in early 2023, the topic continues to be debated. It's impossible to cover all the angles on this topic in a short space of time. But today we'll hear how insight into the concept of ownership can help businesses adapt their relationship with users. Meet David, he's 56 divorced and has a dilemma. His long reliable but now ageing Volvo is constantly failing to start, and he needs a way to visit his mother on the other side of town and meet his friends every Friday night. But since he started working from home more at the start of the first COVID lockdown, which he's keen to continue, David's car sits on the driveway far more than it's driven. David's friend Carlos has been enthusing about the benefits of his decision to join the local car club, where users pay to use cars only when they need them. But there's a problem. Although David supports the rationale of car sharing, he's keen not to have to pay for a new car, and we'd like to make his contribution to reductions in carbon emissions. Something is stopping him signing up. He has an attachment to seeing his Volvo on the driveway every day that he can't entirely explain. David's experience is far from unusual. Research conducted by globe scan across populations in 31. countries over the past three years, found that just 20% of people on average were willing to consider renting or leasing products rather than owning them. Clearly, this average figure marks differences between product sectors and geographies. There has been a lift over recent years for example, in the renting of clothing, and services like Spotify and Netflix have popularised the ability to pay to subscribe to access music and films rather than own the physical objects. If Apple's rumoured plans to launch a subscription service for its phones comes to life, it will switch ownership and thus responsibility for their remanufacturing and recycling for the phones from individuals to the brand. But according to the Globescan research, the overall proportion of willing renters and leases is far surpassed by the percentages of people happy to get involved in other activities that still involve product ownership. Over a third of shoppers are open to buying secondhand 57% are interested in bringing reusable containers shopping with them, while 58% are ready to buy products made from recycled materials. All these activities are also an important part of a circular economy jigsaw, but the apparent resistance to giving up ownership is a stumbling block that needs attention. The move away from product ownership is part of a circular economy that will unhook economic activity from the extraction of finite resources, helping to generate resilient future sources of revenue at lower cost to the environment. For example, just in the fashion market. Consultant BCG has calculated that in a scenario where a rental model achieves 100 uses of a non seasonal dress, the same number of uses as people owning five dresses, co2 emissions can be reduced by around 40%. Reducing the primacy of product ownership is one way that we can achieve a greater level of circulation of products, literally getting more use out of things that already exist, as well as incentivizing producers to design for durability. This latter point is key. It is only by creating an economic model that financially rewards the owner and or producer for maintaining resources. That means that products will be constructed in a way that facilitates reuse or re manufacture rather than thoughtless disposal. In his book The Circular Economy A User's Guide, Walter starhill, founder of the product life Institute, and generally regarded as the father of circular economy refers to this as stewardship replacing ownership. The idea of taking care of resources rather than using and then abandoning them as a linear economy encourages To make this a reality requires a recalibration of the relationship users have with certain types of products. In some cases switching away from a simple one off purchase to some form of access model. Researchers have defined the latter as transactions that might be market mediated, but where no transfer of ownership takes place, the user acquires a limited amount of time with the object, and the benefit is focused around the experience the product can give them, not just the ownership for its own sake. This in a nutshell is the performance economy. A study by Finnish Innovation Fund feature ascribes access models into four categories, product or service or P W s, material as a service performance as a service and function guarantees. Added to this a sharing platforms where a business provides the technology that enables peer to peer sharing of products and services. Although it is the sharing platforms that have primarily caught the global public imagination, product as a service models are on the rise bundles offers subscriptions to washing machines, while mud leases its genes. IKEA is testing furniture rentals, while running shoe maker on has been offering its recyclable Cyclon shoe on subscription since 2020. With this greater level of responsibility remaining with the producer, designers are more motivated to invest in product durability. But they also stand to gain from potentially longer lasting relationships with customers involving more touch points than the one off sale. All this performance economy activity relies on the behaviour of the car losses of this world, giving up ownership rights to certain products. But what about those like David, who are steadfastly hanging on to their possessions, even when ownership no longer makes rational sense. Perhaps an understanding of the attachment to product ownership can help businesses to evolve business models that go beyond it. Many practical factors could have an impact on whether a person will choose to access rather than by including product sector, age, life, stage, location, and socio economic group. Often it is a combination of these factors that can make ownership more attractive than sharing. Car sharing, for example, is especially popular in urban areas where parking is scarce, and among younger people who can't afford to buy a car. Car ownership, on the other hand, is more popular among families who need more instant access to a vehicle that can also double up as storage space. But the psychological motivations that govern these choices have been relatively unexplored in the context of the new user relationships of the circular economy. It's worth unpacking the idea of ownership as we begin to peel away the layers of individuals attachment owning as a concept, ownership is embedded into western collective psyches. As an aspirational aim, it's worth noting that this individual pulls her own isn't as culturally strong in some Asian countries, which have stronger notions of community. China, for example, is well known for its collectivist culture, which prizes the well being of community over individual rooted in its heritage of Confucianism. Western philosophers have devoted vast amounts of time down the ages to picking over the details of the nature of property. Aristotle believed that as long as they were motivated by the desire to own things, citizens would become rational, productive members of society. Many hundreds of years later, 18th century Scots philosopher David Hume expanded on this view, arguing that ownership acts as a stabilising influence on society. The dream of property ownership became a central part of the American dream, as it developed throughout the mid 20th century. The perceived benefits of ownership go even deeper, open a door behind the simple idea of legal ownership, and you encountered the term psychological ownership. This refers to the feeling that is experience. When an individual believes that something is there's this feeling is so powerful that it gives rise to what is known as the endowment effect. This is a cognitive bias, whereby we tend to place a higher value on an object that we own than on the same object if we didn't own it. The roots of this phenomenon can be traced right back to the noted Victorian psychologist William James, whose reflections on the subject illustrated the social constructs of his gender and class in that era.
Finley Phillips 09:45
A man self is the sum total of all that he can call his not only his body and his psychic powers, but his clothes and house, his wife and his children, his ancestors and his friends, his reputation and work his land and your and bank account all these things given the same emotions. If they wax and prosper, he feels triumphant. If they dwindle and die, he feels cast down, not necessarily in the same degree for each thing, but in much the same way for all. His
Pippa Shawley 10:16
idea later expanded on by others, neatly sets out how that feeling of psychological ownership bolsters a sense of identity. His ideas were built on by the king of existentialist, John Paul sort, who in his 1943 work, being a nothingness claims that identity is inextricably linked to the possession of objects.
Seb Read 10:38
To the extent that I appear to myself as creating objects by the soul relation of appropriation, these objects are myself.
Pippa Shawley 10:47
The link between identity and ownership begins from the moment we enter this world and evolves throughout our lives.
Pippa Shawley 11:00
One of the earliest development phases of baby experiences is the realisation that his or her mother is separate from them. paediatrician and psychoanalyst Donald Winnicott, well regarded theory is that the child then fixates on a blanket or toy to serve as a transitional object, helping them to process the sense of separation, and develop physical and emotional independence. Most children go out of their attachment to these transitional objects, and the Teddy your blanket is relegated to a cupboard, but there is evidence that for some people, often those who have suffered a fracture in their early attachment to a parent or carer, the obsession with objects that symbolises the feeling of security remains into adulthood. Another noted psychoanalyst Karen Horney, believed that a craving for possessions power and status as adults derives directly from a heightened need in infancy to cling on to an object that stands in for the interrupted attachment to a parent. There is also research evidence that attachment to possessions evolves throughout life stages, Furby found that 40 to 50 year olds are more likely to cite social power and status as reasons to own personal possessions. post retirement, people are often attached to possessions that echoing the early years to remind them of important relationships. Meanwhile, unruhe notes that as they approach death, people are often motivated by the desire to extend their identities into the future, by arranging for others to inherit their important possessions. Overall, ownership of objects can provide ontological security in the sense of providing a deep seated yearning for continuity and permanence in life. As Cheshire, Walters and Rosenblatt claim. Clearly, not all products will be subject to the same emotional pool. Although this will vary between people. Address car or mobile phone is much more likely to attract a feeling of attachment than a washing machine, light bulb or spade. But what does all this mean for brands aiming to evolve their users into a more fluid, less ownership dependent model of accessing products? How can marketers work with the power have that endowment effect on ownership when it exists? In the words of star Hill, the task is to motivate individuals to dream of happiness beyond ownership. The endowment effect means that rational desires to contribute to a sector economy might be outweighed by those more primitive and powerful drives to possess. As David's experience illustrates. One way this could be tackled might be to look at how the psychological benefits of ownership could be actively transferred into access based models. Canadian Professor Russell Belk coined the term the extended self for the sense of identity that possessions bring in his seminal 1988 paper on the subject possessions and the extended self. He outlines the three ways that people can learn to appropriate an object or regard it as part of themselves. Controlling, mastering the object having the ability to use it and modify it if necessary, creating making something in order to use it knowing having an intimate knowledge of its workings. If businesses can build these aspects into their brands, then can the benefits of ownership potentially be switched to products that users only access rather than own? This was a theory that Martin grew on, and DARPA has researched tested on users of French car sharing brand auto lib in 2015. They evaluated what users thought of the design of the blue car model used by auto lib and analyse the responses according to the three themes above. They found that what users particularly appreciated about the vehicles design did in he'd fit into this framing. A feeling of control was achieved with the high level of the driver's seat, the smooth operation of the automatic gearbox, the seamless function of booking a car, and the ease of accessing electric charging points. The creation aspect was covered by the physical process of picking up a car involving swiping a card on a detector on the car. Knowledge was gained via the standardisation of model, drivers got to know the workings of the car, and were able to easily operate it. This relationship of familiarity extended to the cars inbuilt computer, which saved us his favourite radio stations and destinations. The researchers concluded that strong product and service design features in the blue cars enabled users to feel that they were appropriating the shared cars. Belts triple standard model of appropriation can therefore stand as a useful framework for designing features of a product that can still deliver the significant feelings that ownership generally brings. Autolib ceased operations just a few years after this study was conducted due to logistical issues, so we'll never know the extent to which this model of product access was able to engender customer loyalty in the longer term. But in 2019, the year after auto libs demise, a fashion startup was born in London, that now provides a fascinating illustration of how accessing products can bring a whole new set of psychological benefits. But its operational heart by rotation as a system for the lending and renting of clothing. It's a pragmatic offer, in that it enables users to source an exciting piece of clothing for a special occasion that they might not be able to afford to buy. It also gives those who rent out items the chance to earn back the cost of initial purchase, and more in some cases. But its real selling point is the way it's been constructed to maximise a sense of community between the lenders and renters, known as rotators. Users of the app can follow people matches, taking the language of a dating app, who were the same size as them, and whose sense of style chimes with theirs, and rent the clothes they see them wearing. It's no secret says founder ashita cabra that the app looks and feels like a social network focused around the love of clothes.
Emily Scadgell 17:26
We talk about the Sisterhood of the Travelling dress is the idea that you can share a piece of clothing with others and see how they've worn it in the app. It's very friendly. People have a real sense of belonging as a result of being part of this community.
Pippa Shawley 17:38
It's no surprise that this service facilitates such a strong emotional pool. As cabra observes, members are regularly accessing another user's wardrobe. It's what Belk refers to as sharing in an inclusive act that is likely to make the recipient part of a pseudo family and our aggregate extend itself. It's clear that rotators gained some significant psychological benefits from the service. But do they also lose a sense of personal control and identity by owning less cabra believes not principally because the clothing that is rented is primarily the kind worn for special occasions. And so users are more motivated to be experimental. There is also a resale function on the app. But the clothing purchase tends to be more of the neutrally coloured and styled basics. cabra believes that this is because these basic pieces of clothing are required. With a far more functional mindset. It's the distinctive rented items that are delivering the identity benefits. This insight mirrors the ideas of fashion psychologist Shakeela Forbes Bell, author of the book big dress energy, she thinks that the switch away from ownership models can happen, at least in the fashion sector. When users value the feelings, thoughts and behaviour that the clothes prompt, rather than the fact that they are owned by them. It's about owning the aesthetic, not the product itself. In the words of a happy by rotation user,
Lou Waldegrave 19:09
the definition of clothing is changing from objects to emotional sharing. No matter where you are from or who you are, everyone has the right to share their fashion taste. This
Pippa Shawley 19:22
is particularly interesting, if we think back to the earliest origins of an individual's attachment to things an object that symbolises attachment with a carer and the resulting feeling of security. In the case of buy rotation, it is effectively the membership of the community that is delivering that feeling, not ownership of the item of clothing. This idea complements styles assertion that a performance economy can be successful if built on trust, caring and shared responsibility. The bottom line is that the move towards a sector economy means that marketers need to consider the psychological needs of their uses in a different way to classic buyer research, and then feed this knowledge back into the business model design process. By rotations USP was only achieved by careful design prioritising the community aspect of accessing products via its investment in a proprietary AP. As we consider this evolving, both in terms of the emotional benefits that people derive from new ways of accessing products, and how this can be built into circular business models, we can hold in mind the words of the systems thinker, Donella Meadows. In her classic essay leverage points places to intervene in a system. She highlights that the second most important way of influencing a system is mindset change, changing the cultural values and attitudes that are anchoring the status quo. Challenging the long held assumption that ownership of objects is necessary to give people a sense of safety and identity may be a significant task in the journey towards a circular economy. Yet, it is possible to do so if businesses can offer users a new set or perhaps a repurposed set of psychological benefits. Thanks for listening to this episode of the circular economy show. If you'd like to read Claire's original article, or explore more of the research she mentioned, you can find the link in the show notes. I hope you've enjoyed this episode. If you did, then we'd love it if you could help other people find it by sharing it with your contacts or leaving us a review. See you next time.