Vision Critical and Crowd Companies researched the participation of 90,112 people across the US, Canada and the UK, in the collaborative economy. They share their insights and recommendations for businesses in the report ‘Sharing is the New Buying’ (authors: Jeremiah Owyang, Alexandra Samuel and Andrew Grenville).
It’s worth a read, but I’ll summarize the insights I found most interesting.
Consumers in the Collaborative Economy
Contrary to the image of sharers as tech-savvy urban hipsters, sharers are very much like the population as a whole. Sharing of goods and services is already mainstream – its not a niche market.
Also, sharing is not just a stage of life – ie couch surfing because you can’t (yet) afford a hotelroom. The relationship between sharing and income shows that shares are most likely to be affluent and less likely to be low-income.
Sharing is nothing new. But it has gone from a private or local behavior into a transformational movement.
One of the drivers of this shift, is the technology that enables peer-to-peer sharing of goods, services, transportation, space and money at a speed and scale that were unimaginable a decade ago. Technologies like mobile devices, social networks, sensors (enabling the ‘internet of things’) and payment systems all facilitate new types of sharing services that rely on real-time identification of idle resources and peer-to-peer transactions.
A second driver is economic. Pressures, and thus opportunities for the growth of the collaborative economy are the rising costs of production, the desire to maximase resource utilitsation and consumer interest in developing new sources of income through freelancing and making.
The third driver is societal – there’s a desire for an independent lifestyle, public concern about environmental and community sustainability and a disillusionment with a consumer culture of acquisitiveness, which drive greater consumer interest in sharing rather than owning. People want new business models of access over traditional models of ownership, ie rental, on-demand, subscriptions, try-and-buy models.
Consumer stories matter to big brands because instead of buying a product off them, ‘consumers’ – who are now also a funders, producers, sellers and distributors – can get what they need from each other. The crows is becoming a company unto itself.
The collaborative economy demands nothing short of business model transformation. Make collaborative innovation a fundamental strategy. For instance, customer conversation is no longer an input into the R&D or marketing process. It is now part of how companies should innovate and communicate. Use your customer communicties to incubate sharing initiatives.
Encourage your product teams to build products that are durable and shareable. Direct your legal department to raise their awareness of issues relative to on-demand and sharing business models, as well as workforces assembled on demand and/or working is shared spaces.
Experiment with internal engagement and co-creation activities to assess opportunities for maximizing internal participation in value creation.
Many of the startups behind the sharing services available today, lack resources such as money, distribution and a trusted brand. They need these resrouces to scale – which is exactly what the established companies can offer. For more on this topic, have a read how Coca Cola has started their Accelerator program.
The high levels of technology use among sharers mean that companies who know how to leverage social media marketing and other digital marketing channels will have an enormous advantage marketing their sharing goods and services.
Offer ‘lifestyle as a service’ to younger and more affluent markets. Neo-sharers want access to a life of luxury and ease without being saddled with ownerwhip. To reach the affluent neo-sharers (those sharers also using the latest generation of sharing sites and apps, such as Uber), think about how you can offer experiences or access to elite products.
Rather than leading with taglines about sustainability or community, companies need to emphasize convenience, value and quality because that’s what actually drives sharing transactions. When marketing to the affluent sharers, access to luxury, ease and convenience and pricing should be emphasised over sustainability or altruistic messaging.
The opportunity also lies in the network effect that succesfull sharing generates. Use sharer’s propensity for social networking to ignite the virtuous circle between high customer satisfaction and recommendations. Customers who have a positive sharing experience (which most buyers and recipients overwhelmingly are) will recommend your brand to their friends, driving not only further sharing but also brand awareness and loyalty.