Three things you need to know about the sharing economy

Three things you need to know about the sharing economy

It won't be long before we don't call it the collaborative economy, we just call it the economy. So how should brands and entrepreneurs respond?

At this year’s Sustainable Brands conference in San Diego there was great mention of the growing collaborative economy. Last year we witnessed Avis purchase the car sharing service Zip-car, legitimising this phenomenon, which was once seen as a fad.

The collaborative economy embraces peer-to-peer sharing of products and services, crowdfunding, lending and sourcing, as well as the nascent maker movement. It was seen as a threat to brands and their offerings, but increasingly it is viewed as a beneficial disrupter to their business models that lead to better, more utilised products and services.

Now brands large and small in all parts of the world are looking to see how they can best gain value from their involvement in the collaborative economy.

From buying to sharing

It was said at the conference that BMW sees a future where one car is sold 1000 times, rather than selling 1000 cars once.

With millennials shying away from buying cars they look to involve themselves much more in the design, creation and on-going use of all products and services.

The collaborative economy is a highly engaging way for brands to work and evolve with people’s changing desires and for people to shape products and services in ways that haven’t been seen before.

In San Francisco, the traditional taxi companies are now under threat as ride-share services such as Uber (now operating in Auckland), Lyft and Sidecar attract increasing patronage. In the week I spent there, everyone I talked to have made the switch from using taxis to ride sharing services.

They claimed it was cheaper and a more friendly experience. A service in the UK, Blablacar, even allows users to state their desired level of engagement with the driver, whether it is ‘bla’ (no talking), bla-bla’, or ‘bla-bla-bla’ (sharing your life stories). Former taxi drivers are also making the shift, preferring the flexibility and cost structure of driving for ride share services to the taxi companies.

Just as traditional newspapers came under threat by the rise of user-generated journalism and digital media, the taxi industry needs to look at new ways of delivering value for the customer, or risk becoming the next ‘video store’.

From sharing to collaborating

GE works with the maker community Quirky to identify new products that are then reviewed by Quirky’s panel and an audience of experts before being developed for production and sale. It means incredible speed to market and the assurance that it has already been customer tested.

For people, especially the home tinkerers, it means that they have been involved in the story of bringing their product from a napkin scribble to the shelves of stores around the world.

The disruptive nature of the collaborative economy will continue to offer exciting new models for business and engagement between brands and their audience.

One of the fundamental features is the utilisation of existing resources - be they cars, bedrooms, kitchens, garden tools, offices and even unused big-box retail space - we will achieve a smaller ecological footprint as a result.

How will New Zealand brands and entrepreneurs adjust their ways of doing business to take advantage of these changes?

To the way of things to come

As Jeremiah Owyang, (a prominent thought-leader in this space) stated during the Sustainable Brands conference, “there will be a time when we no longer refer to it as the collaborative economy, and we just call it the economy”. We need to make do with less, utilising what we have and being part of the story to reinvent what we need for the future, we can then achieve outcomes that create value for brands, people and the planet we all share.

Tom Warden is a senior strategy consultant at Interbrand.