Profiling the Sharing Economy
26 March 2014 at 9:14 am
A new report from the US has mapped the emerging ‘collaborative economy’ movement – warning corporates that they need to understand this trend of consumers sharing goods by incorporating it into their competitive strategy.
The report “Sharing is the New Buying: How to Win in the Collaborative Economy,” is based on responses from more than 90,000 Internet users across the U.S., U.K. and Canada, the report concludes that sharing goods and services online through sites like Airbnb, Uber and Kickstarter is growing and becoming mainstream and as a result, has become a competitive threat to large corporations.
Also known as the sharing economy, the sharing or trading of goods and services between customers—enabled by a new set of websites and applications—is growing rapidly and already represents 40 percent of the American adult population according to the researchers, the report said.
“As this new generation of customers continues to grow and challenge established businesses, companies will increasingly need to turn to their customers for valuable insight and collaborate with them to make more informed and customer-centric decisions.”
“The collaborative economy is no longer a niche phenomenon, and it’s quickly growing. Some areas will have double-digit growth, like used goods. As a result, this will disrupt traditional retail and other customer-driven organizations,” Jeremiah Owyang said.
“Through this deep-dive report, we now have a very clear picture of how many people are sharing and who these people are—and they look a lot like the mainstream population. It is time for companies to start planning for a new era in which their customers are also producers and want to do business with brands who get the value of sharing.”
“The rise of the collaborative economy and its promised growth prove that this new way of doing business is starting to become a significant challenge for big brands,” Andrew Reid, president, of Vision Critical said.
“Sharing is taking away huge chunks of market share in many areas of the economy, including hospitality, automotive and financial services.
“The report found that word of mouth drives most sharing, and buyers in particular are so happy with their experience of sharing sites, that we are going to see a virtuous circle in which sharing drives recommendations, and recommendations drive more sharing.
The report said collaborative economy companies such as Airbnb, Uber and Kickstarter threaten big brands.
“The rapid growth of sharing sites including Airbnb, Uber and Kickstarter, as well as sites like Lyft,Rent the Runway, Lending Club, Citi Bike and LiquidSpace, has resulted in increased competition for large, traditional businesses, including hotel chains, cab companies and financial institutions, particularly among 18-34 year olds.
“Forty percent of 200 million American adults already participate in the sharing of goods and/or services online. And, the report shows that the intent to share is on the rise. About 50 percent of people have used a sharing site in the past 12 months.
“Sharing has also proven to be more convenient, cost effective and higher quality to users—attributes previously associated with established businesses.
The report looked at five major categories of sharing including goods, services, transportation, space and money.
About 15 percent of the U.S. and Canadian adult population, known as “re-sharers,” only use sharing sites to buy and sell used goods on sites like eBay and Craigslist. In the U.K., this group accounts for 29 percent of the population. Another quarter of the population is “neo-sharers.”
These individuals use sharing services to find vacation homes, locate professional services and borrow money. The report highlights the following major findings:
Sharing is Growing
- In every category of sharing except buying and selling pre-owned goods, at least as many people intend to share in the next 12 months as have shared in the past 12 months.
- Neo-sharing could double in the next year. In all neo-sharing categories, there are roughly equal numbers of recent and prospective users.
- Buying and selling pre-owned products is a gateway to other forms of used sharing with about 15 percent of non-sharers planning to try a re-sharing site in the next 12 months.
- Americans, Canadians and Brits participate in neo-sharing at nearly the same rate, but re-sharing is more widespread in the U.K.
- Women are more likely to participate in re-sharing (55%), but both men and women actively share across re-sharing and neo-sharing sites.
- Neo-sharers are more likely to be between 18 to 34 years old (50%) and are somewhat more affluent.
- Sharing is driven by practical considerations like convenience (cited by almost 75% of neo-sharers) and price (55% of neo-sharers).
- Product or service quality (cited by nearly 50% neo-sharers) and the ability to find something that is not available elsewhere (40% of neo-sharers) also come out on top as reasons for sharing.
- Over 90 percent of sharers say they would recommend their most recently used sharing service to a friend or colleague.
- Three in four buyers are very or extremely happy with their experience in using a sharing site.