Humans are wired to share. By nature, people generally want to help out, make connections and build a community with each other. This desire for connecting with others has sparked collaborative consumption, an economic trend that embraces shared access to services or goods.
Collaborative consumption has evolved into a movement where people make economic deals with each other and share everything from transportation to clothes. Because of this, today’s consumer cares less about ownership and more about increasing access to experiences and goods.
The share economy evolved from principles of sustainability and reuse, with roots in thrift stores and rental companies, and it has exploded in large part due to expanded internet and mobile access. Collaborative consumption means people are now renting goods peer-to-peer, redistributing their used goods to others and sharing everything from their cars to their homes.
Collaborative Consumption in Today’s Marketplace
Today’s consumers are prioritizing access and experience over ownership, a shift that can catch established businesses by surprise. This growing share of consumers find it easier to buy and sell with each other, thanks to advancing technology, an increasing population and the savings provided.
In light of this shift, some businesses may view their own customers as competition, reusing what they already have and sharing with each other instead of making a new purchase. In spite of this belief, customers are still concerned about a product’s quality and required maintenance costs. Since goods are likely to be reused more often through subsequent trading in a share economy, a longer product life is becoming more attractive to potential buyers. This creates an incentive for producers to make more durable goods, which builds brand esteem—and sales.
Though collaborative consumption disrupts the concept of “ownership” and may sound like the death knell of conventional trade, this is an opportunity for both old and new businesses to participate in the growing consumption economy. Businesses can incorporate collaborative-based ideas into their overall strategies to grow with the current economy and changing customer attitudes. In fact, aspects of collaborate consumption are already used often in the modern marketplace, and it’s easy to notice the many benefits gained in a business’ participation. Collaborative consumption encourages:
- Sustainability and a lower impact on the environment.
- Higher-quality products that are meant to survive and be passed on.
- Promotion of community.
- Flexible access to goods and services.
- The utilization of social networks and the global online community.
- Saved time and money by borrowing and recycling.
- Positive social interactions, which can increase company morale.
- Leveraging customers who use these methods, and finding new ways to help them connect with each other (for example, by building a paid network to connect customers).
- Building your reputation by promoting trust, sustainable practices and community involvement.
How to Get Involved in the Share Economy
Whether you’re considering forming a new business or augmenting an existing business’ model, you can begin incorporating these strategies by understanding the different types of collaborative methods. The three common types of collaborative consumption are:
- Product service systems,where goods are rented peer-to-peer.
- Redistribution markets, where goods are sold or exchanged.
- Collaborative lifestyles, where users share access to more intangible things like their time or information.
Once you understand these collaborative models, you will have three options for becoming involved:
1. Rethinking your current business model. Is there some way to incorporate these methods in your current model? Perhaps you can provide a platform for rentals of your current product line or share your office space with others to co-work and collaborate.
2. Developing a complementary business that embraces the culture of sharing and meets a current demand. Think of what your business has that others may need, or what your customers have that they might be able to share with one other. Consider how this collaborative service can exist as a second branch or sister company to your current business.
3. Start from scratch. If you have never started a business before, the share economy represents a rapidly growing market for you to enter. If you plan to start a manufacturing business, focus on durability and reusability, and leverage your emphasis on quality as a unique value proposition. For online services and apps, check out this guide to building a scalable business in the share economy space.
Many projects and companies have come into being to support this movement. To brainstorm ideas for embracing this business model, research other companies that have been successful in the collaborative consumption arena, such as:
- Airbnb: A growing network of peer-to-peer accommodation sharing.
- Craigslist: A community-based site that enables people to sell their own used goods, crafts and time.
- eBay: The popular site where users can sell their goods to others for money.
- Fiverr: A site for freelancers to offer a myriad of services starting at $5.
- Lyft: A service allowing people to operate their own taxi-like service with the aid of a mobile app.
- ParkatmyHouse: A service allowing people to rent out parking spaces.
- Poshmark: A site for people to resell clothing.
- TaskRabbit: A site that lets users help others with tasks and errands in exchange for money.
- Zilok: A site where users can rent their belongings, including tools, wedding decorations and kitchen equipment.
- Zipcar: A car-sharing community that allows users to rent cars in large cities across the United States for any length of time.