How Business Will Thrive in the Sharing Economy
Michelle Tuttle 270007BS9K firstname.lastname@example.org | | Tags:  people-centric emerging-technology smarter-commerce engagement m&s peer-to-peer sharing collaboration ownership sharing-economy plan airbnb
0 Comments | 9,419 Visits
Whether or not you have heard of the "sharing economy," you have probably participated in it at some point. Perhaps you have carpooled, purchased something from a garage sale, vacationed in a time share, or extended your mobile service to include family and friends. This concept of sharing or collaborative consumption isn't new, but it’s gaining a lot of momentum, driving new sources of revenue and introducing new business models for companies savvy enough to focus on the full customer experience.
At the heart of the sharing economy is people-centric engagement driven by social business, mobile, data analytics, and rich media. These emerging technologies, supported by cloud computing, make it seamless for people to share, trade, rent, bid on and swap goods and services. Individuals now have the ability to easily and instantly match a surplus or availability in one area to a need or deficit in another. It's been called the perfect match-making service and it redefines the buyer-seller relationship.
As the concept of sharing as an alternative to ownership has gained ground, peer-to-peer exchanges such as eBay have taken notice, opening new markets for C2C, B2C and B2B sharing. All of this is driving major disruption across the global marketplace. In 2011, Time Magazine placed collaborative consumption on its list of 10 Ideas That Will Change the World. The peer-to-peer rental consumer market is already valued at about $26 billion, according to Rachel Botsman, author of "What's Mine Is Yours: The Rise of Collaborative Consumption," and it is growing rapidly, with 9,000+ startups in this space and $350 billion in potential revenue. (See the Sharing Economy Infographic below.)
One of the most prominent players in the collaborative consumption market is Airbnb, the largest platform for sharing accommodations. The company has thrived by creating a vision for its business that extends beyond renting space to forming relationships and creating better experiences for customers, partners and communities. As Airbnb CEO Brian Chesky said, "Our business isn't [renting] the house. Our business is the entire trip."
This is a great lesson. Standout organizations will offer more than just a great product or service. They will provide exceptional digital experiences that solve a bigger problem, provide a better way of doing things and give back – to customers, employees, the community and the planet. Just as the Internet enabled the world to share information, today’s people-centric engagement empowers individuals to consume in new ways – smarter ways that are more cost effective, reduce waste, save energy, support reuse and do good for mankind.
Marks & Spencer Group (M&S) is a leader in this type of innovative approach to engagement in the sharing economy. The international retailer is completely transforming how it does business through its major sustainability initiative, Plan A. It has integrated Plan A into every aspect of its operations, including the products it develops and sells, the stores it operates, how it builds new locations, and the way it engages customers, employees and suppliers.
For example, the company’s Shwop Drop site gives customers the opportunity to support Oxfam by donating clothes. Visitors interact with graphic displays of the types of clothing needed most, and are informed about the value of specific donations they might consider. IBM is a proud partner of M&S, providing Smarter Commerce solutions across all sales channels to help the retailer capitalize on the growth of mobile, social and multi-channel purchasing by consumers.
Airbnb and Marks & Spencer have led the way in the collaborative consumption space, but companies of all sizes and from any location or background can prosper in the sharing economy – provided they focus on experience. The same mobile and social technologies that are empowering customers also give companies the ability to listen to customers, establish trust, and expand their relationships and value. The sharing economy is built upon that engagement, and it is populated by those empowered consumers. It creates a space where companies and consumers can solve problems together for their mutual benefit, and even for the benefit of others.
For more insight on this topic, I recommend the following reading: