Every revolution starts with an idea. Collective consumption is one idea that on the surface has all the makings of a pogrom for CMOs and national brands if they’re desultory. This is due to the twin forces of capitalism and technological wizardry having destined CMOs to drive the sharing economy online.
Thanks to the great recession CMOs are now in an economy where access is fast becoming more attractive than owning. The past few years have taught CMOs that sharing has huge potential as a potent new channel for marketing. Panglossian statements about the sharing economy need to be avoided, but there is no doubt that it’s a phenomenon that’s here to stay in a major way whether it’s sharing a farm, a factory or sharing a service.
As customers flock to shared, immersive and convivial experiences, the booming sharing economy is blurring the distinctions between provider and consumer. Amazon and eBay have already enabled consumers to become retailers and apps sharing services are rife whether it’s for a rental car, taxi service or hotel and growing to more extremes like sharing a field or a washer dryer. At the heart of sharing are people renting things from one another. For CMOs the model also works for businesses. Owners make extra revenue from their assets and the benefits of collaborative consumption can be substantial. Take Airbnb, a service that offers rooms across 30,000 cities — 4M people have used it since launching.
The concept of collaborative consumption has been around for ages; joining a car pool, renting a jet, timeshare or Bed & Breakfast, but today’s “sharing” is made easier, quicker and more efficient by the Internet and increases the potential for a larger scale sharing offer. Pre Internet, renting a service whether it’s a tool or an apartment was a major hassle, but now with big data on consumers, CMOs can slice and dice assets and offer them as services plus its easy and trendy.
There has been an explosion in sharing services with sites such as Uber a peer-to-peer taxi service rapidly succeeding in this wild west saving time, effort, fuel and generating revenue. Websites drive the traffic, smartphones enable consumers to find the service they’re renting while solocomo (social, local, community, mobile) enables consumers to check out the service, build trust and ecommerce does the rest. The same works for the owner re: checking the background of the potential customer making it easy to spot an undesirable guest. The sharing model can also work in the B2B category who have items that are costly to acquire or difficult to manage the overhead.
Apart from the economic benefits, collaborative consumption can also provide CMOs benefits to the environment from less cars to scarcer rooms through to inactive factories. Is there, however, a train wreck looming as sharing has produced much outrage amongst invidious lawmakers and protestations from a cadre of CMOs and their established businesses? A regulatory war is about to begin now that the phenomenon is established and substantial. In the past year the impediments of sharing has become clearer whether it’s aiming to tax room renters or banning shared taxi operations, the law has heard the complaints of traditional businesses and the rampant issues of customer safety.
Opportunities are being lost by CMOs in this fast growing $26B category. With new ways to engage customers sharing offers CMOs a treasure trove of benefits by engaging customers in a new and exciting way. Peering into the future all types of enterprises are likely to tap into this new revenue stream and “power sharers” will emerge in this burgeoning market, e.g., Airbnb. Skeptics may scoff, but now brands like GM are entering the fray opening the potential of hybrid models as they look to generate revenue from surplus capacity.
CMOs and their brands have plenty of rules to protect themselves so the road ahead for sharing is bound to be bumpy. Even with the momentum, the journey is arduous and the road is littered with technical obstacles. The real ‘unknown’ is government intervention and regulation, already experienced in cities that have banned taxi car sharing due to the complaints from traditional taxi drivers. The likelihood is that this movement will continue from other categories like hotels as the government demands more accountability and (of course) tax revenue.
For many CMOs who are unsure about collaborative consumption it’s important to point out that it has found respectability in the world. What’s key is that collaborative consumption is operationally excellent at generating results that matter and justified on the ground that it can boost growth and competitiveness in this rambunctious category.
For CMOs, the fate of this sharing economy with huge potential depends mostly on an emerging younger generation of users and businesses to push the world to open the gates of change to better it. It would presage a much bigger shift, boosting the cause of collaborative consumption as an exciting way to power brand growth for new and national brands. Let’s get sharing.