Evolution of consumption: A psychological ownership framework

Date:
October 30, 2020
Source:
American Marketing Association
Summary:
Technological innovations are rapidly changing how we consume goods
and services. In many domains, we are trading ownership of private
material goods for access to use shared and experiential goods
and services. This article outlines how the downstream effects of
these consumption changes are channeled through their influence
on psychological ownership -- the feeling that a thing is MINE.



FULL STORY ========================================================================== Researchers from Boston University, Rutgers University, University of Washington, Cornell University, and University of Pennsylvania published
a new paper in the Journal of Marketing that proposes that preserving psychological ownership in the technology-driven evolution of consumption underway should be a priority for marketers and firm strategy.


==========================================================================
Why does -- and what happens when -- nothing feels like it is MINE? Technological innovations are rapidly changing the consumption of goods
and services. Consumption is evolving in modern capitalist societies from
a model in which people legally own private material goods to access-based models in which people purchase temporary rights to experiential goods
owned by and shared with others. For example, many urban consumers have replaced car ownership with car and ride sharing services. Physical
pictures occupying frames, wallets, and albums have been replaced with
digital photographs that can be viewed at any time and songs, books,
movies, or magazines can be pulled down from the cloud. Half the world population now buys, sells, generates, and consumes goods and information online through connected devices, generating vast quantities of personal
data about their consumption patterns and private lives.

The researchers say that technological innovations such as digitization, platform markets, and the exponential expansion of the generation and collection of personal data are driving an evolution in consumption
along two major dimensions. The first dimension is from a model of legal ownership, where consumers purchase and consume their own private goods,
to a model of legal access, in which consumers purchase temporary
access rights to goods and services owned and used by others. The
second dimension is from consuming solid material goods to liquid
experiential goods. The benefits of these consumption changes, from
convenience to lower economic cost to greater sustainability to better preference matching, makes legal ownership of many physical private
goods undesirable and unnecessary. But their commensurate reduction
in psychological ownership -- the feeling that a thing is "MINE" --
may have profoundly negative consequences for consumers and firms.

Morewedge explains that "Psychological ownership is not legal ownership,
but is, in many ways, a valuable asset for consumers and firms. It
satisfies important consumer motives and is value-enhancing. The feeling
that a good is MINE enhances how much we like the good, strengthens our attachment to it, and increases how much we think it is worth." Downstream consequences to firms include increased consumer demand for goods and
services offered by the firm, willingness to pay for goods, word of mouth,
and loyalty.

The researchers propose that the consumption changes underway can have
three effects on psychological ownership -- threaten it, cause it to
transfer to other targets, and create new opportunities to preserve
it. Fractional ownership models and the impermanence and intangibility of access-based experiential goods stunt the development of psychological ownership for streamed, rented, and cloud-based goods. In many cases,
this results in a loss of psychological ownership, but sometimes it
will transfer to the brands (e.g., Disney, Uber, MyChart) and devices
through which goods and services are accessed (e.g., smartphones) or
transfer to the community of consumers who use them (e.g., Facebook
groups, followers, and forums). The greater choice and new channels
for self-expression provided by this evolution of consumption, however,
also offer new opportunities for consumers to feel as much psychological ownership for these access-based experiential goods and services they
consume as they would for privately owned material goods.

These consumption changes and their effects on psychological ownership
appear in a framework that is examined across three macro marketing
trends: (1) the growth of the sharing economy; (2) the digitization of
goods and service; and (3) the expansion of personal data. Exemplary
cases explored include ride sharing, the digitization of music, and the expansion of health and wellness data. Each case illustrates why each
of these trends is eroding psychological ownership, how it is being transformed, and new opportunities being created for firms to recapture
and preserve it -- whether in goods and services, intermediary devices
like a phone, or at the brand level.

This psychological ownership framework generates future research
opportunities and actionable marketing strategies for firms seeking to
preserve the value- enhancing consequences of psychological ownership
and navigate cases where it is a liability. It highlights many ways in
which psychological ownership will continue to be a valuable lens through
which to view, understand, forecast, and manage the consumer experience.


========================================================================== Story Source: Materials provided
by American_Marketing_Association. Original written by Matt
Weingarden. Note: Content may be edited for style and length.


========================================================================== Journal Reference:
1. Carey K. Morewedge, Ashwani Monga, Robert W. Palmatier, Suzanne
B. Shu,
Deborah A. Small. Evolution of Consumption: A Psychological
Ownership Framework. Journal of Marketing, 2020; 002224292095700
DOI: 10.1177/ 0022242920957007 ==========================================================================

Link to news story: https://www.sciencedaily.com/releases/2020/10/201030081542.htm

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