Collaborative Consumption Around 5 years back a woman named Rachel Botsman delivered a really passionate Ted Talk on topic of collaborative consumption. She used an analogy of drill, to place a hole in your wall to hang a painting in order to explain how most of the individuals/organizations have under-used/under-utilized resources that someone might bring to use and the owner of the asset in this way could generate some passive income out of it. The challenge is the whole notion of trust to have on the individual at fundamental and next level and it is the idea on which collaborative consumption is build up on.
The key is to stop asking people to trust you, they will never. Trust can’t just be talked about; it comes with experience it has to be fundamentally felt in all our dealing it cannot be described on a website. Similarly, always remember that why would somebody register on your website search and buy something for 150 $ which is available in the market very easily at a distance of lets say 1km on a cost of only 30$!? But a person traveling to some new place might search the internet for the best hotel deal or call a taxi/car online rather going, searching and wait in queue to get the cab. Therefore, the value is for our ways we invest the time, effort and resources. A big way of building trust is good word of mouth, good feedback from your consumers. Websites today give you a very transparent view of how the business is doing. Their assets and productivity of their assets is much more visible now.
In 1970s when 2 thought leaders published a paper on community structure and proposed the idea of collaborative consumption as a ted talk. Air BMB start as air bed and breakfast launched in 2008 as couple of college students couldn’t deiced on 0how to pay off their apartment rent and they rented out a bed out of their apartment, and gradually it developed into a complete economic idea. However, in certain countries it has became subjected to legal action and litigation because of the economic impact it has on certain markets. Like in USA, UBER is not allowed as they cannot charge them the tax they do to other taxis and limos.
According to the old definition of productivity that was build around the idea of input à output. Economic sharing does not increase productivity. But what it does is to leverage the underutilized assets. In USA particularly, once the asset malfunctions it is just thrown away rather being fixed and reused. 4-5 cars sitting in the garage of a house in which 2 people are living is the underutilization of those assets which can generate a huge amount of value.
Economic sharing can occur in any category. A fantastic library of books at your home is just lying there un-used it can go to someone who has not read that book. The idea of economic sharing has turned these libraries into sharing libraries where people can borrow the book and return it back once they have read it. Similar thing is happening on websites, where peer to peer landing has become pretty common and generating a lot of value.
How Sharing Economy Model Work? How is it different
Sharing economy work force is dramatically younger.
They are dramatically much educated.
They are also earning more
They are making passive money, no need to be actively there
Delivery and high hourly earnings
Economic Sharing Models
Labor is provided by the customers: Examples of successful economic sharing models is Facebook in which the user/customer creates all the content, IKEA makes the buyer do all assembling of the furniture therefore no labor needed.
Service provider and users provide the labor: Example is the MasterCard Company.
Platforms that get others to supply infrastructure for free: WhatsApp and UBER
Product Platform that enable third party services: Apple Inc is not producing most of the applications themselves rather there are developers who develop the application Apple is just providing them the platform and making money out of it.
Manage the Present and Invent the Future You have to find new ways in which your business could look fundamentally very different in next 30-36 months from what it looks today. To succeed in this evolution you have to first think about new strategies, business goals, and the drivers and tactics to make your business look different. You need to understand your target audience, who has to be served and who is being under served. Then you must understand their needs and values to identify what they actually need. Then you need to align this to strategies, tactics, innovation, capital and architecture to achieve sharing economic market leadership.
Sharing economic also needs evolution on how you build on your relationship especially digital relationship. You can choose to do nothing, be reactive and ultimately you will cross the threshold and start being productive and proactive. And some of you can become as visionaries.
The Workable Model
Brands that are successful are now a days redefining the customer experience
Most to all of the customers are digital customers one way or the other. As explained in the picture below:
Conclusion: Retail is not the only industry which is going to be dramatically affected by these economic sharing models and millennial expectations. If you think about all that the customers are looking for in their interaction with you lots of their expectations are coming from economic sharing technology they use on daily basis.