Subscribe | Advertise | Contact Us | About Us |    

Bookmark and Share

Happy New Year. Are You Ready for the Sharing Economy?

The future of commerce in products and services lies in sharing. Is that a good thing?

Happy New Year. Are You Ready for the Sharing Economy?

Each week seems to bring a new announcement of a service based on the sharing economy. Typically, it involves the use of "crowd"-sourced workers, which might be another term for contracted labor that lacks the perks of full-time employment. Or a private individual will offer some excess item or service directly to potential users for sale or rent. 

Examples abound: the pioneering ride-sharing services Uber and Lyft, lodging provider Airbnb, household items lender Simplist (formerly Snapgoods), odd jobs performer TaskRabbit

Now comes Crowd Companies, a self-described pioneer of the "Collaborative Economy." It runs a council consisting of senior executives, marketers and strategists from some of the nation’s leading brands, including The Coca-Cola Co., Whole Foods Market, Wells Fargo, Wal-Mart Stores, Inc., Hyatt Hotels Corp. and FedEx Corp.: 42 members in all.

Council founder Jeremiah Owyang further describes the initiative as part of the “Maker Movement,” intended to “displace the traditional role of manufacturers.” It’s all about the creation of goods that are shared directly between people and corporations, he said last fall at the 2014 Global Summit of Supply Chain Insights. Instead of the word “consumer,” he prefers “partner” or “ally.” He seems to be envisioning a world where the line between buyer and seller is erased.

Crowd Companies does not itself sell anything. It focuses on presentations, workshops and other educational services, all geared toward enlightening the public about the benefits of the sharing economy. It’s intended for “progressive brands that demonstrate a willingness to collaborate with customers for new shared value,” according to the council’s website.

Some more recent “disruptive” examples of the sharing economy:

-- ToySwap, a site for the buying, selling and exchanging of used toys;

-- TechShop, providing access to professional tools, software, workshops and studios for people who want to make their own goods;

-- Feastly, whereby kitchens in private homes are turned into restaurants;

-- Instacart, offering a personal shopping and delivery service at major retail stores;

-- oDesk, linking businesses with professional freelancers who perform writing, website design, mobile app creation, search engine optimization, and other administrative tasks.

-- Yerdle, a product-swapping service. When it comes to the acquisition of consumer goods, “Why should you buy anything?” asked Owyang. “Everything you need is in your neighbor’s garage or closet.”

On the transportation side, of course, there’s Uber, the controversial ride-sharing service which, despite recent public relations setbacks, is already valued at more than $41bn. For better or worse, it’s the poster child of the new collaborative economy.

Considering the trend’s long-term implications, you have to wonder why so many established brands would agree to participate in a venture like Crowd Companies. Owyang cited a study by the University of California at Berkeley, which found that a properly shared car, which otherwise would sit idle 95 percent of the time, translates into $270,000 of lost auto sales revenue. One shared vehicle, he said, is equivalent to nine cars costing an average of $30,000 apiece.

Instead of fighting the trend, some of the biggest traditional companies are looking to exploit it. The Home Depot already offers a tool and truck rental service, Owyang said. Walmart has launched a video game-exchange program which essentially allows consumers to sell the product back to the retailer, and receive store credit for new games.

Patagonia urges consumers to buy used jackets from the Common Threads collective, instead of new apparel from the upscale retailer. The strategy demonstrates the durability of Patagonia clothing, said Owyang, and creates “an opportunity for the brand.”

In a world of “sharing,” full-time jobs with one employer could soon become a thing of the past. Gap Inc. is partnering with the bike-sharing venture Divvy, allowing its employees to work for the latter during the summer, and for The Gap in winter.

And hotels? You’d think they would be especially threatened by emerging leaders like Airbnb. On the contrary: “The smartest, most innovative hotel will partner with the crowd,” Owyang said. It will seek out leading Airbnb hosts and propose a partnership that gives them access to hotel services.

One of the oddest exemplars of the sharing economy is Wonolo, which has teamed up with Coca-Cola. It offers an app whereby retail customers can stock shelves for Coke displays, and get paid doing it. Are they shoppers or store associates? One begins to understand Owyang’s insisting on scrapping the term “consumer,” in favor of something more nebulous.

There’s even a sharing movement on the financial services side. Barclays is offering a credit card with a crowd-sourced design. Community members propose ideas and vote on the final product, Owyang said.

So where’s it all going? Is the sharing economy the real future of commerce? Will workers become independent contractors who cobble together full-time salaries through offerings of their homes, their kitchens, their toys and their ski equipment? Or will this all fizzle out with the bursting of the next dotcom bubble? It’s entertaining to hear visionaries like Owyang talk about disruption, collaboration and the end of the traditional consumer. But you have to wonder whether we’re close to adopting this radical a model of economic activity anytime soon.

Comment on This Article

SCB TRANSLATOR (Over 60 languages)
Sponsored by: