Innovation Inspiration : Collaborative consumption
To receive Jonathan Hall’s monthly newsletter on Innovation, directly in your inbox subscribe here. Collaborative consumption is a class of economic arrangements in which participants share access to products or services, rather than having individual ownership. Often this model is enabled by technology and peer communities.” - Wikipedia
From Airbnb to RelayRides and TaskRabbitto to Lendingclub, the advent of collaborative consumption is redefining the traditional models of purchasing and ownership. Why invest in a car, book a hotel room or buy new toys for your kids when you can easily borrow, rent or share? In this month’s newsletter, we explore why collaborative consumption is here to stay and what brands need to be thinking about.
The future is here
As the Economist reports, collaborative consumption is still relatively new and bound to hit some road bumps. But, Jaime Contreras a MIT Sloan Expert, reckons it’s a potential $110 billion market, and fundamental drivers mean it’s only going to grow in importance: increasing concern for the environment, the recession and mobile & social technology.,
Join it, or risk disruption
Collaborative consumption is redefining the buyer-seller relationship. Jeremiah Owyang recently released this report on its broad business impact. Take automotive as an example: every car-sharing vehicle reduces car ownership by 9-13 vehicles; a revenue loss of at least $270,000 to an average car manufacturer, not to mention the impact on the associated ecosystem…
Valuing the customer experience
One of the key differentiators in what sharing economy companies offer is an augmented experience beyond the pure product or service . “The experience of staying in an Airbnb apartment–with all its quirks, blemishes and unique qualities–is the differentiator from the equivalent traditional hotel” . But what might people be prepared to pay for enhanced experiences?
Auto industry the one to watch
It’s the car industry where collaborative start-ups are emerging and the big players are taking note. Avis purchased Zipcar, GM is partnering in RelayRides and BMW has invested in Parkatmyhouse. And take a look at FlightCar: the story of how three teenagers turned their backs on Harvard, Princeton and MIT because they thought they had a better business model than Hertz or Avis
Ever heard a company say, “don’t buy our stuff unless you really need it?” That’s exactly what Patagonia is saying in its new partnership with eBay in an effort to make shopping more sustainable, including a marketplace for second-hand Patagonia clothing.
Leveraging collaboration to improve efficiency
Collaborative consumption is not only disrupting industries, it’s also helping them to be more efficient. Consider same-day delivery. So far offering this service has been challenging for most retailers, but new services like Deliv are hoping to crowdsource same day delivery.
Ideas from developing markets
In Pablo Barros’ upcoming book, Behaviour change, consumption and sustainability: how companies can influence individuals in a world in transition, he claims the sharing economy will trigger a re-invention of business models, and relates how developing markets will become an engine for collaborative consumption.
Branded collaborative mobility
Following in the footsteps of European cities, NYC has become the latest place to launch a shareable bike program which not only allows consumers easy access to bikes, but enhances Citibank’s brand awareness.
Food for thought:
Top 15+ disruptive business models based on collaborative consumption.
What’s Mine is Yours, the premier book on collaborative consumption.
Written by Jonathan Hall, Managing Director, Added Value Cheskin.
Image source : “What’s Mine is Yours“ book cover design by Nicholas Blechman.