Welcome to the age of sharing. Thanks to easy-to-use online markets like Airbnb and Uber, consumers are increasingly choosing to share goods and services with each other than buy from big brands. According to Fast Company, the so-called collaborative economy represents a $110 billion market. Now, for the first time, comes a report that helps marketers understand just who is doing the making and sharing of goods and services, and why they’re collaborating instead of buying. Sharing Is the New Buying, co-produced by Crowd Companies and VisionCritical, discusses the results of a survey of 90,112 people in Canada, the United Kingdom, and the United States. The report shatters a stereotype that participants in the collaborative economy consist of starving hipsters in Brooklyn or technology nerds in Silicon Valley. In fact, sharing has become mainstream. And brands that want to succeed in the sharing economy must tell stories around value and trust.
“Contrary to the image of sharers as tech-savvy urban hipsters, sharers are very much like the population as a whole: in other words, a lot like your customers,” write authors Jeremiah Owyang, Alexandra Samuel, and Andrew Grenville. “Sharers are part of the mainstream set of customers that businesses cannot ignore.”
Sharing Is the New Buying is an important read for any marketer who wishes to tap into the zeitgeist of the collaborative economy. After all, publications ranging from Forbes to The Guardian cite the sharing economy as an important trend affecting how business is conducted in 2014. So it’s no surprise that big brands such as Patagonia and BMW have been learning how to tap into sharing behaviors by offering ways to share goods instead of buying them outright. Sharing Is the New Buying offers a snapshot into who exactly is doing the sharing. Some key findings:
- Sharers are mainstream, making up 40 percent of the general population, meaning 80 million Americans, 23 million Britons, and 10 million Canadians. People who rent and share from each other cut across a broad spectrum of demographics, with women comprising 55 percent of the sharing population.
- Sharers are affluent: more than 27 percent of “neo-sharers” (users of emergent sharing services like Uber) have incomes between $50K-$100K, just like the overall population.
- Sharers are young: about half of active participants in the sharing economy are between 18 and 34 years old.
- Sharers are practical: most people share because of convenience and cost savings, as well as the desire for quality goods and services.
Savvy start-ups have already tapped into the wants and needs of sharing consumers, as have established brands. Airbnb has quickly challenged the hegemony of the larger hotel chains by making it possible for everyday people to rent private property to each other. Peer-to-peer lending sites like LendingClub make it possible for consumers to bypass traditional banks and lend money to each other for more favorable rates. Patagonia and eBay recently launched a site for consumers to sell used Patagonia clothing.
How to Win in the Sharing Economy
So how can a brand connect with participants in the sharing economy? Based on the findings of Sharing Is the New Buying, I believe brands will need to tell stories around the attributes of value and trust. And they’ll need to speak to a consumer who is simultaneously a seller, too.
Value means appealing to good old fashioned needs such as price, convenience, and quality, which are the three most powerful drivers for people to share, according to Sharing Is the New Buying. But value does not mean cheap — remember, we’re talking about an affluent audience that puts a premium on unique, quality goods and services, according to the report. For instance, BMW is anything but cheap. The iconic car brand sells a message of convenience and price through its DriveNow car-sharing program:
- “You just register online and pay a one-time $39 membership fee. That’s for life. No annual fees.”
- “Use the DriveNow app or website to locate the nearest DriveNow station and available car.”
Similarly, the W Hotel and DesksNear Me do an effective job of appealing to convenience and price by offering collaborative workspaces — packaged along with W’s obvious appeal to chic-minded consumers. As W and BMW demonstrate, value can be sexy.
Sharing Is the New Buying did not delve into this topic, but brands also need to be mindful that they need to convince people to share goods and services with perfect strangers in order to participate in the sharing economy. That’s why Airbnb has taken great pains to develop a reliable user verification system — if you’re going to open your home to a stranger, you need some assurance that you’re dealing with a reputable person. eBay has built a reputation for trustworthiness with a guarantee that you’ll get your money back if you don’t get the product you purchased, for instance. But as Gigaom points out, players in the collaborative economy still have work to do in order to develop scalable ratings systems that are uniformly trustworthy.Trust is a category where the more established brands have a built-in advantage. Brands such as Ford, Daimler, and Home Depot, all of which participate in the collaborative economy, can play off their established brand equity. They are trusted names.
But upstarts can appeal to trust, too. Ride-sharing service Lyft posts its safety standards (which include first-of-its-kind liability insurance) on its website, and its blog discusses its commitment to safety. (A recent post openly compares Lyft’s safety standards in Seattle with those of limousines, taxis, Craigslist).
Lyft also does something else that’s crucial to succeeding in the sharing economy: appealing to both buyers and sellers. Its website offers a clear choice for those who want to rent a car or become a driver. Similarly, Airbnb makes it easy for first-time visitors to understand how to rent a space or find one. The Airbnb website blog shares engaging stories about what it’s like to buy and rent, an example being a family that rents its home in the Garden District of New Orleans.
Airbnb understands that on any given day, a consumer is a seller, too. As Sharing Is the New Buying asserts, “In this world, the people formerly called ‘consumers; are also funders, producers, sellers and distributors. Their stories matter to big brands because this movement means that people can get what they need from each other—rather than buying from you.”
Sharing Is the New Buying is not one of those overly complicated reports challenging companies to completely change their business models lest they be left behind. Rather, the report is really a call for brands to do something they should have been doing for decades: understand changing customer behavior, and adapt. And adapting to the sharing economy means embracing trust and value.
Note: on April 8, the report’s authors will provide more insight via a webinar, “The New Customer Playbook: How to Engage and Innovate with Your Customers in the Collaborative Economy.” To participate, register here.