Why Any Business Can and Should Participate in the Sharing Economy
Business is changing and it’s changing fast.
Beware, the days of lone wolf CEOs and competitive advantage are numbered.
These days, it’s all about sharing, crowdsourcing and having a ‘collaborative advantage.’
The Sharing Economy is believed to be the biggest business trend of all time and indeed it represents the most significant shift in society since the Industrial Revolution. Forecast by PwC to reach a valuation beyond $335 billion by 2025, the sector is on course to be worth well over 20 times that – defying all expectations. With 28% of the global adult population already participating and businesses in multiple markets worldwide finding their way in – ignore it at your peril.
But what exactly is it?
At it’s core, the Sharing Economy is a broad, umbrella term (often misunderstood) and refers to a whole economic system built around accessing shared physical and human resources. This runs the gamut from car sharing, to renting out spare rooms but also includes crowdsourcing, skills swapping and community sharing. The ‘sharing’ doesn’t mean it’s free, but usually refers to accessing a shared resource, engaging the crowd in your products or services and creating value that is not only economic but social and environmental too. A car sharing business, for example, offers people access to a shared vehicle at a fraction of the cost of ownership and offers an experience, connecting people using the service whilst lowering carbon too. The proverbial win-win for all.
What makes the Sharing Economy distinct, is that it recognises all value -- economic, social and environmental. It empowers people to create, trade, swap, access and share goods and services between themselves. It harnesses the power of the crowd. The reality for businesses today, is that now people can trade peer-to-peer, they’re no longer reliant on large corporations for their products and services.
Corporate behemoths are being ousted by new, innovative, tech enabled platforms, who offer people an efficient, affordable yet unique experience that is social and planet-friendly to boot.
In fact, 90% of consumers say they want brands to share, yet only 10% are doing it well. Companies who adopt these Sharing Economy approaches have been shown to double their revenues within 1 year. Those who ignore it, often don’t survive to tell the tale.
RIP Kodak, HMV, Blockbuster…
Any Businesses Can Participate in the Sharing Economy
Interestingly, the Sharing Economy is not an exclusive club and any business, in any market or sector can participate and benefit, provided that from the outset, you partner or work with those from the sector who understand how it works. A traditional top down approach is destined to fail; this isn’t an exercise about applying new technology to old models – it’s about turning the models themselves on their business heads.
Firstly, businesses need to develop what I call their ‘collaborative advantage.’ Your ‘collaborative advantage’ is what will ensure your survival in this age of sharing. How well can you collaborate and partner with others? What are you doing to enable and engage the crowd, involving customers, users, people in the design, development and delivery of your products and services? How are you providing access to shared resources?
The process involves determining your purpose (why the shared value that you’ll create matters), developing the Sharing Economy strategy that best suits your business and understanding who your target collaborators are.
Generally speaking, there are 5 ways your company can participate in the Sharing Economy – all involve partnership and some form of peer collaboration.
Utilise Idle Assets: Turn your idle assets (a cost) into a revenue stream. Think spaces, equipment, skills and other resources. Marriott Hotels teamed up with LiquidSpace to rent unused spaces to entrepreneurs.
Enable peer-to-peer: Walmart have piloted the concept of crowdshipping, by connecting in-store shoppers so they could deliver goods (for a fee) to online customers.
Involve the crowd: Hallmark partnered with Brit + Co to put on events and create experiences, such as Hallmarket. This resulted in young makers creating innovative products and engaging new customers.
Build a marketplace: Develop your own innovative technology that enables the trading of shared resources. Swisscom worked with Mila Friends to offer customers a platform where they could find tech help from neighbourhood experts.
Invest or acquire: Avis acquired Zipcar, Hyatt Hotels acquired One Fine Stay.
There’s no doubt that Sharing Economy is the future for business.
The question is, will you be part of it?