Sharing is the New Buying: The first substantive report on the burgeoning collaborative economy2014-03-03
When Jeremiah Owyang first alerted me to an Altimeter Group report on the sharing economy, I was skeptical. Not about the reality of the growing trend toward sharing and collaboration, mind you. The growth of companies like AirBnB, TaskRabbit and Lyft is undeniable. But in a world economy driven by factors like interest rates, trade balances, government debt, gross national product and exchange rates, how big an impact could a societal trend like this really have?
I have committed a fair amount of time to delving more deeply into the topic over the last several months as Shel Israel and I explored the potential for co-authoring a book on the subject. I have come around. The impact on the economy—in the U.S. and worldwide—is potentially disruptive. Shel and I are so convinced that we’re inching closer and closer to a formal announcement of a collaboration.
Today, Owyang—who is so enthusiastic about the notion that he left Altimeter to found Crowd Companies, which focuses exclusively on the trend—released the first noteworthy research into the state of the collaborative economy. If I hadn’t been convinced of the significance of this trend, “Sharing is the New Buying” would have pushed me over the edge. (Late last year, Neville Hobson and I interviewed Jeremiah about his new venture for our podcast. You can hear the interview here.)
By the way, “collaborative economy” is Owyang’s term, by the way. Others refer to it as the “sharing economy.” I’m not happy with either of those, since I see more dimensions to the trend than are covered in this report. I’d tell you what those dimensions are, but that would spoil the surprise for when Shel and I make our formal announcement.
The study—subtitled “How to Win in the Collaborative Economy”—is the result of analysis of more than 90,000 consumers in the US, Canada and the UK. Working with Vision Critical’s cloud-based insight community technology, Owyang set out to develop a better understanding of how people collaborate with businesses and with each other.
The 30-page report is loaded with information that lends clarity to a nascent collection of companies and marketplaces that seem, at first glance, unfocused and scattered. The report establishes a schema for how to think of much of the sharing/collaboration space—at least for now—while delving into demographic breakouts that should help marketers and others target their efforts more efficiently.
Much of the information in the study is summarized in one simple graphic that offers an overview of the state of the collaborative economy:
But it was a conclusion I reached that the report did not articulate that struck me as most important: The use of these sharing and collaboration resources is becoming an ingrained habit in a significant swath of the population.
The rationale for using these services was one of the reasons I was initially skeptical. For several years, the world has been climbing out of a serious recession. The recovery has been slow and hiring has not kept pace with corporate profitability. Put another way, money’s tight. It’s easy to imagine people taking advantage of sharing marketplaces when it can save them a few bucks. But what about a few years from now, when (and if) the economy is surging and discretionary income is plentiful? Won’t people just want to start acquiring stuff again?
For some things, yes. But a new complement of people dubbed “neo-sharers” in the report are embracing sharing and collaboration as a lifestyle; they don’t see it as a necessary compromise. Neo-sharers are those who have already used at least one of the new generation of sharing sites and apps, and are inclined to use them—and sites and apps like them—again. And they make up about a quarter of the populations of the US, Canada and the UK. Neo-sharers are different from re-sharers, who have been around as long as classified advertising has existed. Re-sharers buy and sell used stuff on eBay and Craigslist, among other sites. Buying a used cabinet on Craigslist is one thing; finding and paying someone to digitize the photos in your 25 scapbooks on TaskRabbit is something else altogether.
Re-sharing, though, is familiar. People who don’t share at all are more likely to take a stab at re-sharing than neo-sharing, according to the study, which means re-sharing is the gateway to newer-fangled forms of sharing and collaborating.
The report boils down the drivers of the collaborative economy to three:
- Societal—This covers everything from the way people want to live to their concerns about sustainability.
- Economic—The desire to save money fits in this category, as well as optimism that new sources of income await those who participate.
- Technological—A variety of technologies enable these services, including social and digital media, which is what made this whole concept intriguing to me in the first place.
Another concern I brought to my early conversations with Owyang is based on past corporate behavior. Businesses threatened by change don’t usually embrace the change; they seek, instead, to crush it in order to maintain the status quo. The music industry could have acquired Napster and figured out how to make mountains of money from it. Instead, they shut it down. That’s just one example.
The problem with the threat posed by the collaborative economy is that there’s really no single entity to go after. There is no equivalent of Napster. The hotel industry might wish AirBnB would go away, but there are no grounds for bringing legal action in hopes of shutting it down. This time around, business is going to have to adapt.
The report makes it clear that many businesses already are adapting. For example, sharing cars means fewer will be sold. But BMW offers cars on demand through its DriveNow program. “Rather than sell a thousand cars,” the report argues, “BMW can now sell one car a thousand times and offer parking apps and more.” Pharmacy chain Walgreen’s has partnered with TaskRabbit to find drivers to deliver prescriptions to customers’ homes.
There are considerable opportunities for existing businesses to thrive in this economy, as long as they are willing to adapt to it.
The report doesn’t project too far out about where all this is headed, something Shel and I plan to do in some detail. Nor does the report focus much on obstacles, of which there are many: liability, regulation, taxation, and customer service issues are just a few. But as a snapshot of the state of the collaborative economy right now, Owyang’s report is indispensable.
There has been some thoughtful coverage of the report, including these:
- FastCompany: The Collaborative Economy Is Exploding, and Brands That Ignore It Are Out Of Luck
- Neville Hobson: New research shows what drives consumers in the collaborative economy
- Inkling Media: The Emerging Collaborative Economy, An Opportunity for Small Business
- Jeremiah Owyang’s personal take on the report
The full report is available below: