Something of a monumental change in business has been taking place before our eyes. There is an increasing trend towards so-called collaborative consumption. Such a concept requires people to embrace the concept of sharing, lending, renting and swapping, argues Hannah Gould, writing for The Guardian in 2014. This is a new kind of business that is more sustainable than many other types of business out there. Airbnb is often hailed as a prime example of a business that has grown up around the idea of collaborative consumption, explains Gould. Airbnb capitalises on the “sharing economy” by allowing people to be able to rent out unused rooms in their houses. It has been a massive success. Airbnb has been in business for six years, and in that time, according to figures provided by Gould:
“It has hosted 15 million guests, with a community now spanning some 34,000 cities in 190 countries”.
The Airbnb approach gives rise to thinking about how the idea of collaborative consumption could be used in other ways and applied to other new possibilities for doing business. Examples provided by Hannah Gould are cars that do not get used every day, suits that never get worn, duplicate mobile phones that get tucked away and never used, and power tools that only ever get a rare outing in the home.
Xavier de Lecaros Aquise (2014) also writing for The Guardian, presents eBay as the “poster child” for this phenomenon rather than Airbnb. Of course, eBay is yet another fine example of what can be done in the area of collaborative consumerism which helps reduce waste. eBay allows regular people to be able to sell their no longer wanted items of clothing, toys, gadgets or pretty much anything else imaginable on its platform so that someone else may purchase it and benefit from its use in the future. Xavier also provides many other examples which include those from the transport industry such as Zipcar and Lyft, in fashion in the form of GirlMeetsDress, and in crowdfunding where examples include Kickstarter and RocketHub, among a great many others.
What drives people to share ?
Understanding the drivers behind these types of businesses may help to better comprehend why they are doing so well at this point in time. Xavier reports on a study carried out into the Business of Sharing in the UK by Zipcar which found that people often prefer to hire rather than buy for a number of different reasons. One important reason is cost per use, and another is not being able to afford it in the first place. Other important reasons for preferring to hire rather than buy were given to be depreciation in value, dealing with the ongoing maintenance costs, and with hiring a pull factor of having the flexibility to upgrade or to change styles more easily. The collaborative consumer revolution does not appeal to anyone. Hannah reported that in a recent study by Nielson which was a Global Survey of Share Communities, in the UK only 37% of people are willing to rent their assets. Overall the study examined attitudes of 30,000 people in 60 countries. In particular younger people were more interested in renting from others than older people. While 56% of the under 30s were more eager to rent, only 13% of the over 60s were willing to do so. However, as Hannah explains, in the UK we lag behind Europe in our willingness to share our stuff. Fifty four percent of Europeans are willing to share, lend, rent and swap, and 68% of people worldwide do so. But Hannah Gould argues that share, lend, rent and swap we should as this could save £12.4 billion in our economy. Of course the idea of collaborative consumerism could have consequences for businesses. Hannah Gould attempts to spin this in a positive light, explaining that businesses will save on resources, waste and energy. Of course, it is likely that businesses would also be making less money through fewer sales, unless of course they too engage in the collaborative consumerism trend that is taking the world by storm. Gould explains they could do this by renting instead of selling as well. Gould argues that overall this approach of less wastefulness would have positive consequences for the environment, since less production means less use of raw materials, lower carbon emissions produced through production and less waste and pollution. Bring on collaborative consumerism!
Additional resource: infographic on the relationship between social media and collaborative consumption
Paula Newton is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Paula’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Paula has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Paula has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.