Shareable: Study Reveals Big Opportunities in the Sharing Economy
Latitude and Shareable Magazine recently released the findings of The New Sharing Economy study, which uncovered new opportunities for entrepreneurs, investors, and established companies in the emerging sharing economy.
Top Opportunity Areas for New Sharing Services. The New Sharing Economy study surveyed 537 participants for their current engagement and future interest in sharing across industry categories. Based on this data, the top opportunity areas for new service offerings were interpreted as those with both high latent demand and low market saturation: time, household goods, automobiles, money, and living space.
Infographic excerpted from The New Sharing Economy study report. Download in full here.
Time is money. More participants were more interested in sharing time than money, suggesting the importance – and perhaps the ascendancy – of alternative currencies. “I believe marketplaces that use network technologies to enable the exchange of less tangible assets such as time, space and skills are going to be huge,” predicts Rachel Botsman, co-author of What’s Mine Is Yours: The Rise of Collaborative Consumption. “It is part of a massive redefinition of values and what has value and realizing that we can fulfill our wants and needs with other assets beyond colored paper notes that we call money.”
- Demand for know-how. There’s a significant opportunity to create online platforms that connect people who want to exchange knowledge (“Community College 2.0,” as one study participant put it) and professional services non-monetarily, and which understand reputation as an important part of the value equation. Moreover, as the definition of currency broadens, so too does access to a range of desired goods and services for all community members. “There’s increasing awareness that time banks, community currencies, and barter exchanges do a better job of allocating resources broadly than central reserve currency,” said Neal Gorenflo, publisher of Shareable Magazine.
- Household goods, meet Web platforms. More than any other item category, household goods (like power drills and food processors and vacuum cleaners) represent an area where people simply aren’t aware that services like NeighborGoods and Rentalic exist to help them share. Pricy, occasional-use items that just take up space are a no-brainer for sharing with other people, and the Web has just gotten started connecting neighbors (and remote strangers) with common interests. In fact, amongst non-sharers of households goods, those who shared personal or informational content online were significantly more likely to be aware of specific services for sharing these things, whilst those who didn’t share content online were more likely to believe such a platform doesn’t currently exist—a pattern which was repeated across the majority of shareable categories.
The most successful platforms to date have been those which focus on a specific asset category like textbooks and kids clothes, or a set of related assets such as luxury apparel. This is largely because the Web allows businesses to market specific items efficiently (with Google Adwords, for example) and to identify a community of relevant bloggers and influencers easily. It’s a challenge, but the sharing businesses that can overcome current hurdles related to targeting, marketing, and overall visibility may come out on top.
What All Businesses Can Learn from The New Sharing Economy. In this emerging, web-enabled industry, it’s easy enough to imagine promising new concepts for social startups – and we should. But an equally important consideration is what the sharing economy means for big businesses. We believe that sharing represents a fundamental paradigm shift in how people consume: from hyper-consumption to “collaborative consumption,” as Botsman puts it – a perfect storm driven by connective technologies, economic recession, and raised environmental consciousness. Sharing is a “disruptive psychology” for the biggest businesses, who’ll need to adapt if they’re to survive. “Kimpton Hotels, Flextronics, Netflix, Amazon web services, Lend Lease, Gap, Coca Cola, Rackspace, Best Buy, Kinkos and many other well-known brands are sharpening their sharing core by getting real value in the form of insights from data about their customers, products and partners,” explained Lisa Gansky, author of The Mesh: Why the Future of Business is Sharing. “With our increased comfort with web-enabled mobile devices, social networks and our ability to track and manage physical assets, it’s an imperative to listen, engage and experiment.”
Image credit: D’Arcy Norman
- Build brand loyalty and generate more actionable marketing data through sharing-based offerings. Web and mobile platforms designed around repeatable sharing exchanges create more touch-points for companies to connect with users. (If you bought a Toyota two years ago, you probably don’t stop by their brand site often now. If you’re a Zipcar member, you log into your account every time you need to access a car.) Transactions and social, community interactions translate into highly valuable information about where and how customers actually interact with products over time—not to mention, what kinds of improvements these users will want in the future. This wealth of data can speak directly to refined targeting, personalized offerings, iterative product or service improvements based on user feedback, and strategic partnerships.
- Grow by partnering with businesses who share your customers’ interests. The New Sharing Economy study found that car-sharers share across significantly more asset categories than non-car sharers—11 versus 8 categories on average. “This finding suggests that once someone tries a sharing service they’re more likely to begin sharing in other areas of their life. With this in mind, sharing enterprises would do well to seek partnerships with car-sharing and like services, seek out users of other sharing services as new customers, and begin offering other items to share once established in a category,” wrote Gorenflo in an earlier post. For example, Zipcar teamed up last year with Zimride, a popular ride-sharing service, to match car-sharers with those just looking to catch a ride (such as university students). In The Mesh, Gansky imagines a cross-industry scenario where Whole Foods, which has an environmentally-conscious customer base, might partner with a car-sharing service: spend over $100 per week at Whole Foods and get a free car rental for several hours per week.
- Combine big business reliability with peer-based community and resources. “We believe there are numerous opportunities for already successful businesses operating on more traditional models—car rental companies, real estate management firms, even retail stores of various kinds—to expand their offerings through sharing-based exchanges,” said Steve Mushkin, CEO of Latitude. “The combination of highly reliable, centralized management with flexible and personalized, peer-to-peer inventory could be a winning one in many cases.” Recently, Virgin saw an opportunity to provide a structured, social lending platform for people who share money casually amongst friends and family “to ensure that both the borrower and the lender are free from the pressure that can often result from less formalized social loans.” By providing the infrastructure for people to connect, and outsourcing the sharable resource (money), Virgin is able to charge a $99 setup fee for personal loans and offer a plethora of paid add-ons.
A Few Forward-Looking Sharing Business Concepts, Submitted by Participants. The following is a small sample of good ideas for new sharing services, straight from our study participants. It is Latitude‘s research philosophy that the individuals who routinely encounter certain experiences or “problems” in their daily lives are often the most qualified to generate solutions for improving them in innovative and forward-thinking ways.
- Software. “A sort of bounty hunting service for Open Source projects, where people in need would invest into certain features/fixes with (smaller amounts of) money. Bounties would therefore accumulate and developers would profit by providing solutions. It would enable more people to live off Open Source development instead of seeking boring jobs.” —Male participant, 24, Ljubljana, Slovenia
- Knowledge. “Community college 2.0: provide some sort of structure that lets people let other people know what they know and what they want to learn. If you can get enough people together, everyone is both student and teacher.” —Male participant, 29, Salt Lake City, UT
- Time and Responsibilities. “Bartering: I’ll walk your dog while you’re away; you water my plants. I’ll loan you baby toys I don’t need any more; you loan me your lawn mower. I think this kind of interaction is part of community ties and support networks that used to develop naturally and spontaneously and need some encouragement now.” —Female participant, 38, Providence, RI
- Physical Spaces. “‘Fractional renting,’ for want of a better term. Enabling people to find like-minded partners to share major assets on a part-time, rental basis. An example: renting a room Monday to Friday every week. Why isn’t this done more for second homes (rent a second home for one week out of every month) or boats (rent a boat one weekend every month)? The main idea being that if people are renting in this consistent manner to people they know and trust, they will be more willing to do it.” —Female participant, 47, London, UK
- Household Goods. “A lot of college students don’t have access to home repair tools, vacuum cleaners, etc. because they are mobile renters. You could make them available for free but tracked by student ID so you could get them back.” —Female participant, 24, Seattle, WA
- Food Preparation. “I envision a pot-luck community cooking club… everyone cooks one dish in bulk, splits it up into multiple portions, and gets together to swap dishes and recipes. It cuts down on cooking time because everyone is making 10 servings of one dish rather than 10 separate dishes, and you can try new dishes made by someone who is experienced at making them.” —Male participant, 28, Atlanta, GA.
Latitude and Shareable are pleased to announce a donation of $1000 to Creative Commons and $500 to Project for Public Spaces on behalf of The New Sharing Economy study participants who offered up their time and thoughtful contributions to make the world a more shareable place. We encourage readers to contribute Creative Commons and Project for Public Spaces too! Thank you.