The rise of collaborative consumption
11 Jan 2012|Lee Shupp
I’ve been very interested in the emerging trend of collaborative consumption, where people share goods and services collectively rather than buying them individually. This has huge implications for standard business models, which assume that you can sell more stuff because everyone wants one (or even multiple versions) of their own. What if our economic preferences are shifting from ownership to access? How does that change that way that we think about business models, innovation, and customers?
I live in San Francisco, which is one of the hubs of collaborative consumption. It’s quite easy to share a car with Zipcar (a Zipcar) or RelayRides (yours or a neighbors). It’s easy, and many would argue, more authentic to travel and stay inexpensively in someone’s home with airbnb, or even just a couch if you have simpler needs. It’s easy to rent stuff that you only need once at rentcycle.com (a startup founded by ex-Cheskinero Tim Hyer). Here is a longer list of collaborative consumption start-ups.
What is driving the trend towards collaborative consumption?
- Netflix and spotify have trained us to consider access over ownership with movies and music
- High unemployment, which looks like it will stay high for a while, inspiring frugality both among the unemployed and those worried about their jobs
- Less disposable income among those still working, with wages stagnant or even declining in some cases
- The desire to reduce environmental impact from owning lots of stuff
- The quest for simplicity over clutter (are you scared of your garage and/or attic?)
- The ability of the Internet to increase transparency and reduce friction around sharing
- NetGen, a net savvy generation coming out of college into a challenging job market, with the desire to do lots but without the money to buy much.NetGen is likely to adopt collaborative consumption by necessity as youths, and keep doing it from habit as they become older and more affluent
What does it mean for Fortune 500 companies?
- Think about scenarios where your product or service may be shared, rather than individually owned. How does that change design? How does that change business model?
- Think about how you could use sharing scenarios as a product trial, moving from sharing to individual purchase by proving worth consistently over time rather than delivering occasional, minimal value.
- Think about product placement with sharing sites as a great way to increase awareness, trial, and brand affinity.
- Think about how you can build communities around collaborative consumption of products and services.
I expect collaborative consumption to grow and thrive over the next few years, and to remain as a strong trend even as the recession turns into happier economic times. This is a trend to take seriously.prev next