Share and share alike: is collaborative consumption the future?
The trend among consumers towards sharing, swapping and buying collectively is generating new business opportunities, as well as threatening some established companies, argue Rachel Botsman and Roo Rogers, co-authors of What’s mine is yours.
What can established businesses learn from the emerging trend toward collaborative consumption?
Roo Rogers: Many elements of collaborative consumption should be pulled out and applied to big business. For instance, how do you galvanize your consumers, making them part of a membership, a club, your brand, your ethos? How do you create that loyalty? All businesses, from the New York Times to Zipcar, are trying to figure that out.
Rachel Botsman: I haven’t met one Airbnb user who isn’t an evangelist for the brand – and that is the ultimate goal for companies. One of the biggest misconceptions is that these are community movements, but in fact businesses are driving the movement. Technology is enabling sharing and exchange; however, the idea of the rise of a smaller marketplace is relevant to any business, because that’s the direction in which consumers are migrating.
“Today, companies allow consumers to participate more in the creation of products so that they feel more loyal.”Roo Rogers
Co-author of "What's mine is yours"
Is it really possible for companies to become one with their customers, working in collaborative communities fostered by the internet and online social networks?
RB: I think it’s achievable, but it’s a challenge, largely because of the “trust” issue. Could a bank enter the social lending space? Virgin has done it with a reasonable level of success.
RR: It’s been interesting to watch firms such as Peugeot and Mercedes move into car share. Businesses are going to begin focusing on platforms rather than products. The platform is the most important element, and the products will gradually become commoditized.
How does this ability to tap consumer enthusiasm affect the marketing approach that companies and organizations take?
RB: One of the common themes with big businesses is that they all say they are trying to find “smallness” within “bigness.”
RR: Traditionally, companies would come up with an offering, try to target a mass market, spend money on marketing and advertising and hope it would fly. Today, companies might allow consumers to participate more in the creation of products so that, first, consumers feel more loyal toward them and, second, the product is likely to be more successful.
Are companies open to the idea of giving away control in this way to consumers?
RB: “No” is the honest answer. It’s such a shift in their culture. The whole organization is set up to sell and you’re asking it to move to a services model. These conversations have to come from the top, or from an empowered innovation unit, such as Nike+.
In Coolfarming: turn your great idea into the next big thing, Peter A. Gloor argues that, instead of putting power solely in the hands of the chief executive or “chief executor,” we should share it among employees, customers, suppliers and management. What’s your view?
RB: I couldn’t agree more. In 20 years’ time, I don’t know whether the word “corporation” will even be used. We are starting to see this shift in areas such as health care, but are boardrooms receptive to the idea? I’m not sure they are. Many big corporates are bad at letting go of their own power, so it may take them decades to move to this model.
RR: I slightly disagree with this. Companies cannot be run completely by committee. You need leadership and entrepreneurship. The challenge to traditional corporations is that consumers want more control, but I’m not convinced that getting rid of the CEO is the best thing for the consumer. I still believe in leadership.
Having said that, strong leadership and good ideas are no longer limited to Harvard Business School. Fabulous ideas are coming from consumers, and it is becoming cheaper to develop businesses online. The smartest thing that companies can do is to encourage their employees to be entrepreneurial.
The interview was written by: