The so-called "collaborative economy" is gaining steam, as people increasingly choose to share and crowdsource goods, services, funding, transportation, and more. And if brands don't adapt soon, they'll be left behind.
That's the takeaway from Sharing is the New Buying, the first-ever large scale look at the participants in the collaborative economy. A collaboration between the brand council Crowd Companies, Jeremiah Owyang, and Vision Critical, a cloud-based customer community platform provider, the report surveyed more than 90,000 people in the U.S., U.K., and Canada to find out how and why people participate in the growing movement.
The first step in analyzing the report is to define the term "collaborative economy". Owyang, a long-time tech industry analyst, defines it as the convergence of three ideas: the sharing economy, the maker movement, and the "co-innovation" movement. This is a fairly broad definition, which includes everything from ridesharing to 3-D printing to crowdsourcing designs for new products. "The big trend here is that the crowd is empowered to get the physical world from each other rather than buying it from brands," he says.
According to the study, there are three kinds of people in the collaborative economy: non-sharers, re-sharers, and neo-sharers. Non-sharers haven't yet engaged in the new economy, but think they'll try it out in the next year. This is 60% of the survey population in the U.S. and Canada, and 48% of U.K. residents. Re-sharers use established services like eBay and Craigslist to buy and sell goods. This is 16% of the U.S. and Canada population, and 29% in the U.K. Finally, there are the neo-sharers, who use newer services like Uber, Airbnb, Kickstarter, and Taskrabbit. This is actually a considerable portion of people surveyed: about 25% in all three countries.
Sharers have certain traits in common. Nearly half are between 18 and 34 years old, almost three quarters use social networking sites, and they tend to be affluent. But these somewhat obvious demographics don't tell the whole story. "You think about sharing typically, and it's kind of the Brooklyn hipster image. You picture this person who is a vegan and doesn't own a car and gets their bike from a bike share and doesn't use hotels, and all that. It turns out that the sharers are extremely mainstream," says Alexandra Samuel, Vision Critical's vice president of social media.
Nearly 30% of neo-sharers in the U.S. have incomes between $50,000 and $100,000, which is on par with the general population. While certain services, like ridesharing, are optimized for denser cities, Owyang maintains that there are plenty of opportunities for suburban and rural participants in the collaborative economy. Job marketplaces like e-lance and oDesk and goods marketplaces like eBay can be used anywhere.
Some other big takeaways from the report:
- Most people share because of convenience and price, not an overwhelming desire to live sustainably. Still, they associate qualities like sustainability and community with sharing services more than they do with retail stores.
- Urban centers are more likely to contain people who have borrowed or lent vehicles and money, but this may be partially because cities have more 18 to 34 year olds compared to suburban and rural areas.
- The "neo-sharing" population could double over the next year, since there are nearly equal numbers of both recent and prospective sharers in all neo-sharing categories (transportation, money, etc.).
- Neo-sharers are slightly less likely likely to own a home or be married, but are more likely to have kids. They're also a bit more progressive than the general population (39% of neo-sharers in the U.S. are Democrat, compared to 34% of non-sharers and 29% of re-sharers).
- More than 90% of sharers surveyed said they would recommend the service they most recently used.
There are a few reasons why the collaborative economy has taken off so rapidly in recent years. The rise of smartphones and easy Internet access has certainly helped the collaborative economy take off rapidly. Also, the recent recession pushed people to experiment more with new services that could save them money, like Airbnb and Lending Club. Finally, the movement has been pushed along by a general societal shift towards denser cities and consumer disillusionment.
For big brands that haven't been paying attention, now's the time to start. "For businesses, this is going to change the game of how customers expect to deal with them," says Samuel. "There is a big risk here for companies who don't engage in this space given that it's a mainstream phenomenon."
So what can companies do? Owyang believes there are three approaches they can take. First, there's the marketplace model. Patagonia has used this in a partnership with eBay, where it encourages customers to buy used clothes instead of new ones. "This shows a thriving community a brand and products that last," says Owyang. Second, they can try out service models—specifically, on-demand, rental, or subscription services. BMW has done this with its DriveNow electric carsharing program. Finally, there's the co-innovation model. U-Haul, for example allows people to crowdfund trucks and equipment through its Investors Club, creating customer loyalty. A partnership between GE and Quirky allows people to submit ideas for products, while a team designs and manufactures them for retail.
"In the radical future, we may not be able to tell the difference between an employee and a customer," Owyang speculates. "The most successful companies will let the crowd determine products, design, and share them. The crowd is doing most of the work. The only thing that could be left would be the logo."
Check out the full report here.
[Image: Abstract via Shutterstock]