Enshittification Comes to ‘Smart’ Products

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When technology journalist Cory Doctorow coined a new term to describe how the consumer experience on platforms such as Amazon, Facebook, and Google has degraded over time, his observations resonated so widely that the American Dialect Society named enshittification its word of the year in 2023.

Doctorow argued that platform operators follow a predictable pattern: At the outset, they create a compelling user experience to build an installed base and establish high switching costs. Next, they exploit those users in order to gain revenue for their business customers, such as by prioritizing ads and paid content rather than what is most relevant to the user. Finally, when users and business customers are locked in, platforms squeeze both sides to maximize their own profits, and everyone’s experience worsens.

While Doctorow focused his ire on platforms, we see similar dynamics at play in traditional industries, where making physical products “smart” by adding digital capabilities has paved the way for manufacturers to similarly lock in and squeeze customers. We contend that building internet connectivity, sensors, firmware, software, and data analytics into physical products has enabled digital business models that unlock new revenue streams — and, too often, lead businesses down a new pathway to enshittification.

Digital capabilities and the new features that they enable are often initially welcomed by customers while being touted by executives as creating new value. But digital features that give manufacturers unprecedented access to and control of products long after customers have taken ownership have become a tempting avenue to extract more revenue by exploiting that control.

Seeking to capture customers with an attractive offering and then exploiting them while their experience degrades is just the latest manifestation of corporate greed. It’s no accident that enshittification emerged as the dust settled from the winner-takes-all platform battles that left Amazon, Facebook, and Google as the dominant players in e-commerce, social media, and search, respectively. 

Taking advantage of the digital enablement of physical products to squeeze more value from customers may be more insidious and irreversible than doing so on platforms, given such products’ dependencies on both the digital and physical worlds. With platforms, once a user experiences degradation, they can switch apps, use ad blockers, or even stop using the app altogether (although business customers often have too much to lose by leaving). In contrast, customers of physical goods have often made significant financial investments in those products, such as appliances, automobiles, and even heavy equipment, so opting out may not be a practical option. While many platform users have grudgingly accepted the cynical bargain that “you are the product,” the reputational risk to companies that overexploit digital control of physical products may be greater because doing so violates customers’ powerful sense of ownership.

Digital connectivity and other features can delight customers with richer functionality and convenience. Companies that remain focused on using technology to improve the customer experience will build customer trust accordingly. Those that instead exploit their digital control and data access, on the other hand, risk their brand reputations and potentially their long-term health.

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