Welcome to Inefficiency Week. Over the next five days, we’re going to take a look at what we lose when we get lost in the chase for efficiency. We’ll explore the ways it’s changing the games we love to watch. We’ll remember its failures across the pop culture spectrum. And we’ll report on what it’s doing to our lives — romantic, physical, and otherwise.
I can quickly tell you everything I own:
- A mattress
- A bed frame
- A laptop
- A couch
- Approximately $1,000 worth of additional furniture
- A 23-pound King Charles spaniel mix (really, he owns me)
- Two tents
- A moderate amount of inexpensive clothing
I do not own my home (I rent) or my car (I’m in the process of paying it off). While I am not as subscription-inclined as many of my peers, I know that if I wanted to eschew ownership completely, it wouldn’t be all that difficult. Like digital media services such as Netflix and Spotify, which obviate the need to own DVDs and CDs, there are a handful of services that can help do the same for clothes; Stitch Fix, LeTote, and Trunk Club are just a few among the many.
Then there’s dinner. For that, you can use Blue Apron or HelloFresh. You don’t need to own a car, or even a bike; Uber, Lyft, and Zagster let you order or rent them on demand. I recently dove into the world of on-demand homes.
There is a growing sense that in 2017 anyone can eliminate traditional notions of buying and ownership for a lighter-weight life, one built on things delivered in subscription boxes and via on-demand apps. The things we acquire don’t have to stay; just send them back for more, newer things. (Or forget about them the second you tap your way through the tip option on your screen.) The idea is that this can create a minimalist, frictionless lifestyle, saving physical and mental space to allow for a more efficient life.
This wave has roots in the shut-in economy -- or, as it’s better known, the ever-growing database of on-demand apps that allow you to conjure anything you want from your phone without leaving your home. The ability to order a cooking class, a stylist, or even furniture on a daily, weekly, or monthly basis is a far more efficient model than leaving the house and traveling to stores all over town to accomplish the same tasks. Efficiency is an increasingly attractive asset to our busy lives, because there’s more value in our time and how we spend it than in the things we buy. (There’s even a new cringey buzzword for this: Nownership. ) This trend is a good thing, right? In some ways, yes.
But here’s the rub: What if it’s not all that efficient? What if we’re just swapping one method of spending money and time for another?
Take, for example, the ridesharing model. In a recent study, researchers found that the way many on-demand businesses are set up doesn’t exactly follow the rules of supply and demand.
"The platform (Uber) has to determine the price (charge to customer) and the wage (pay to drivers) to balance the supply and demand," study coauthor Christopher Tang, who is editor-in-chief of the Manufacturing & Service Operations Management journal, tells me via email. He used now-defunct premade-meal delivery service SpoonRocket as an example of his point. "It is complex because of the following reasons: To attract customers, SpoonRocket charge a low price and demand surge. However, to get a decent margin, SpoonRocket paid the delivery persons low wage rate and few drivers join. As few drivers join, customers have to wait for a long time to get their meals. Consequently, demand dropped. As demand dropped, SpoonRocket needs to lower the price to attract demand, and paid the delivery folks even lower wage rate."
This went on and on, Tang says, until the company had to shut down. It’s something all on-demand companies have to worry about. And it’s a mess.
While this study focuses on inefficiencies that affect the on-demand market (think Uber, Postmates, TaskRabbit), through trial and error, I found some for myself in the subscription-box model. After a friend told me about Le Tote, a fashion rental service, I decided to give it a try. I am the type who wears things to death, and this, coupled with my aversion to shopping malls, piqued my interest; finally, an end to my deathless dance with Target. I wasn’t wowed by many of the Le Tote options and I work from home, which means I exist in gym clothes unless I’m corralled into public on a weeknight. I labored over what to put in my box, and before that, I labored over whether to use StitchFix, Le Tote, or Trunk Club. I spent less time on these respective decisions than my usual shopping time, but not much.
When the box arrived, I was ready to be won over by this opportunity to incorporate new styles into my wardrobe without committing to them. This was not the result: I found a pair of cutoff shorts that were too big, a velour zip-up hoodie that looked like cotton on the site, an unflattering black tank, and an agreeable but oversize athleisure-esque long-sleeve shirt. At the end of the week, I packed up the items, slapped the shipping sticker on the bag, and left them on my doorstep. They weren’t picked up. So I drove a few blocks to drop the bag into the mailbox. It didn’t fit.
Months later, the Le Tote bag is still sitting in my car. The closest post office isn’t terribly convenient for me to get to during business hours. I’m racking up charges for the Le Tote clothes I’m not using and haven’t returned. This is not an efficient lifestyle.
Order-only, box-bound, receive-and-return consumerism builds loyalty to the companies making these deliveries rather than the manufacturers and producers behind the content, clothes, or whatever else shows up on your front porch. It feels more and more like we’re committed to the brands and platforms of distribution rather than the manufacturers behind the things we’re buying. If someone asks me about something I own, I’m going to tell them I got it on Amazon. If I recommend a movie, I say it’s on Hulu or Netflix rather than who produced it.
Nathan Stringer, chief account director at consumer-trends research agency Foresight Factory, says our participation in creating these products are a major factor in this shift. The very act of selecting your Le Tote closet, of building your personalized BirchBox order, of curating your Spotify Daily Mix provides a new kind of ownership. "People will be loyal to the service because they are loyal to what they’re creating," he says. "I’m actually the one creating this. There’s a sort of cocreation experience."
"I think subscription boxes give the illusion of choice and experiment, when in reality they are fairly limited," says Eleanor Snare, a marketing consultant. "You might think you’re trying lots of new brands, garments, or products, when really you’re only able to access what the subscription-box brand can get for a good deal." Snare explains there are two types of boxes: surprise and curated. If you want a total surprise, then you can likely handle a disappointing box. And if you choose curated, then you might make more of an effort to like what’s temporarily yours. Snare also says that if you’re a consumer who is interested in variety and trying news things -- and maybe someone who has brand-commitment issues -- you’re better off finding a local retailer and developing a relationship with them. Of course, on the surface that sounds inefficient; but so is paying money every month to convince yourself that you like something you might not.
Part of the lure goes beyond experiencing these boxes alone. "There’s a social shareability to it," says Stringer. "There’s a performative aspect of this." Look no further than the Blue Apron dinners or Stitch Fix unboxing videos you can find on Instagram. These companies are built from the bottom up to make us feel like we’re part of the process, and their branding is designed to fit neatly in a hashtag, perfect slotted in a social media post. What’s lost in the process, oftentimes, is the creator. And what consumers are increasingly interested in is preserving their own time.
"I think the general thing is rising expectations for speed of delivery," says Stringer. Speed on both sides of the equation is important: The faster we can order something (from thought to two clicks on your laptop or phone versus getting in your car and in-person comparison-shopping) is significant, and making a selection online is easier. But what about the other side? Speed of delivery, as Stringer says, can still be a frustrating challenge for businesses; on a larger scale, because of increased online shopping and e-commerce, the shipping and delivery industry is undergoing rapid change. It also means massive growth in the warehouse space, which is essentially just a transfer of our capitalist tendencies. We may have fewer malls, sure, but we’ll have more warehouses and delivery trucks than ever.
The greatest impact of the subscription model, though, is on the environment. A 2016 New York Times story found that e-commerce is a massive driver of increasing cardboard use. The vehicle used to bring all this cardboard to our doorsteps — delivery trucks — are contributing to increased fuel emissions. And if you thought this would cut down on consumers driving ourselves to shop, you’re wrong; we’re still doing that, we’re indulging in online shopping and subscription boxes in addition to IRL shopping. The pressure on e-commerce companies to make speedy deliveries -- as well as for on-demand business like Postmates and Instacart to do so -- means there are trucks all over the place, some using inefficient routes in order to get the box or bag of groceries to the right doorstep in the allotted amount of time.
There’s incentive for the subscription-based businesses doing this: Instead of a one-time payment on items here and there, they’ve built in a monthly payment system. I know a thing or two about persuading people to commit to a monthly payment system: In college, I worked as a caller for the alumni giving program.
There were three payment options, or three "asks" as we called them: First, a one-time contribution of $250. That was often met with a no. Next, a monthly EFT, or electronic funds transfer, of $10 a month for a year. The last was a one-time $25 donation. The EFT, though, was what we wanted; callers were rewarded (with candy; if only I could have paid tuition in banana Laffy Taffy) for them. It was more worthwhile than a one-time donation to build in a small recurring deposit for the school -- one that the alum could easily overlook on a monthly statement. $10? What’s $10? It’s the same logic that Spotify, Netflix, and other subscription businesses use.
At CES earlier this year, I spoke with one hardware company about its transition from gadget company to software subscription business. Gadgets you sell once; subscriptions you can sell forever. There is more value in creating a repeat customer -- and since loyalty is becoming more tied to speed, efficiency, and platforms (versus creators), investing in this model becomes increasingly attractive for business.
I realize I sound like the fun police. There is a joy to on-demand apps and tap-tapping away to order yourself sushi or a ride. It’s fun to get a box you helped curate on your doorstep. The efficiency selling point of these businesses is not totally correct -- yet. There is hope, but it requires us to opt in to new modes of ownership instead of just adding them to our preexisting consumerism. A recent MIT study found that ridesharing apps have the potential to cut down on traffic and benefit the environment, but we’d have to use them instead of cars, buses, and taxis, not in addition to; and it also means we need to use the carpooling option and companies need to rework their algorithms to make sure drivers are taking the most efficient routes. How well the model is working in current conditions remains dubious at best. And having a rotating closet shipping in and out of your home would save time and money (and space). But the devil is in the details of these things, and unless we fully embrace a new life of fractional ownership, we’re likely no more efficient than we’ve been in the past.
Fortunately, we are growing savvier. "The old ‘catch ’em out’ of customers not realizing when their subscription is due for renewal, I think, is waning," Snare says. "Consumers in general are far savvier with money, and particularly when opting-in for an ‘experimental’ service like a subscription service."
Grant Sabatier, a former financial consultant who runs a network called Millennial Money, agrees that tricking buyers into forgetting about monthly subscriptions is on the way out. Overall, he sees the on-demand and fractional ownership models as emblematic of a new, more positive attitude about buying things.
"The simple premise that’s gaining mass traction is that any money you spend, you traded your life energy for," Sabatier says. "You’re constantly calculating the value equation in your mind of ‘Is this worth it?’ I think that narrative is gaining a lot of traction, and I think in this age of always accessible information we as millennials view time differently. With technology, time moves faster, and so we’re starting to view it as more precious. We’re so stimulated and there’s so much to do. … So we’re more cautious about our purchases because whenever we buy stuff, we’re trading our life for money."
And for those of us who want to revel in Lyft rides while continuing to own a car of our own? Well, the joy of ownership is still a powerful idea. "Marie Kondo had a massive cultural impact," Sabatier says. "The whole idea of ‘Anything that I buy, does it give me joy?’" Maybe then, even if we’re not undergoing the economic efficiency revolution as promised, we’ll get a positive attitude adjustment about consumerism along the way.
For now, though, as I dial up a TaskRabbit to return my ill-advised Le Tote bag, I’ll be dreaming of the day we reach maximum productivity.
