Collaborative Consumption and what it means for brands
In May 2010, Rachel Botsman, made a speech at TEDxSydney introducing her case for Collaborative Consumerism.
Backed up by her book, What’s Mine Is Yours: How Collaborative Consumption is Changing the Way We Live (co-written by Roo Rogers), Botsman argues that owing to a new sense of the importance of community, a torrent of real-time peer-to-peer social networks and technologies, increasing environmental concerns and a global recession that has shocked spending habits, consumer behaviour is changing.
While the Twentieth Century was characterised by hyper-consumption, says Botsman, the Twenty-First Century world is shifting to more sustainable and collaborative consumption patterns. Consumers in the Twenty-First Century see value as being less about ownership, and more about access to products and services.
“For the past 50 years, we’ve been treated as stupid passive consumers” says Botsman. During these years of hyper-consumption, people were isolated, lacking any real sense of the community that makes us feel human. Collaborative Consumption taps into the frustrations and anger the people feel with government, big business and environmental concerns, to offer consumers the opportunity to be part of a local community, whether that is defined by geographical proximity, common interest or coincidence of existence.
Botsman and Rogers divide Collaborative Consumption up into three areas:
1 – Redistribution markets
Taking an unused, pre-owned item and transferring it to an area of the market where it is actually needed/wanted. As pioneered by eBay, modern trends of freecycling, swapping and swishing facilitate a move away from the disposable consumerism of the past, and serve to stretch the life cycle of products. Botsman describes redistribute as the ‘fifth R’: Reduce; Re-use; Recycle; Repair, and; Redistribute.
2 – Collaborative lifestyles – The sharing of resources, skills and time
Facilitated by technology that offers transparent reputation systems, trust and efficiency, it is now possible for consumers to: rent out their spare rooms, share their car space, or even farm out their domestic tasks relatively easily. People are coming to realise that their time, daily routine, skills, property and possessions are of use to others, and can be monetised. A Tour Guide To Collaborative Consumption (infographic from Fastcodesign) shows how it is possible to ‘make money from your unused stuff!’, while Sharable.net goes further, offering a How to Share guide and even The Gen Y Guide to Collaborative Consumption which lists the numerous sites and businesses now enabling people to collaborate with each other.
3 – Product service systems – shared or temporary ownership models
With the prohibitive cost of ‘big ticket’ possessions, collaborators are finding that paying for what they use – rather than the product itself – is a more accessible and economically viable way to get what they want. Botsman gives the example of the power drill: what the consumer wants is the hole, not the drill. As with the explosion of hourly car rental service Streetcar + zipcar, or the guy down the road who rents out his power tools, consumers are finding that the temporary ownership of products and services often comes with less strings attached, and is actually more favourable to taking out a car loan, or having possessions that clog up your living space.
Consumers these days would rather be advised and assisted by their peers before making purchases, they would rather try before they buy. Collaborative consumers are not passive, but creative, providing products and services of the own. They know the value of products and their time, and have been given the tools to monetise them.
What does Collaborative Consumption mean for brands?
For a digital creative agency, Collaborative Consumption represents a fascinating challenge. With an ever-growing market for pre-owned goods, how do you continue to engage with your consumers on an ongoing basis? When products have previously been designed with a shelf-life and inbuilt obsolescence, how does this change a brand’s approach to how it designs and markets its products?
Sustainability advocate, Solitaire Townsend, recently wrote an open letter to Gucci Group CEO Robert Polet imploring the aspirational brand to ‘transform consumerism’ by pushing a more sustainable and collaborative agenda:
“I eagerly await the refurbished Gucci vintage collection, the Collaborative Consumption handbag hire scheme, the Gucci Swish and the adverts in Vogue depicting an enviable green lifestyle. You need to go beyond designing sustainable products, you need to design sustainable desires.
“Gucci’s ‘Forever, now’ slogan is a superb definition of sustainability. Time to deliver it.”
With Hugh Fearnley-Whittingstall’s FishFight campaign recently gathering more than 700,000 signatories in an effort to change EU Law, and politics becoming ever more collaborative and social, through sites like http://www.avaaz.org/en/ it’s clear that if mobilised effectively – online collaborative communities can make big changes in politics and consumer affairs. Brands need to be aware of this, but instead of shying away from it – we believe the successful ones will embrace it.
“Luxury rental platforms are going through extraordinary growth” she says, “because people can access goods that were previously inaccessible and also because the cost equation makes sense. Take a designer handbag, if I am going to use it say less than three times do I really want to own it?
“Ultimately, as more brands and products move to an innovative rental or usage model, they will be motivated to make products that last. Obsolescence is flipped on its head. I could not think of a more exciting time to be a designer exploring how shared usage will change the design of products.”
Botsman goes on to praise the response of automotive industry to the challenges this new consumer behaviour has brought about:
“We are actually seeing car manufacturers leading the way in terms of big brands incorporating Collaborative Consumption into their existing business models. Already we have seen BMW (DriveNow), Daimler (Car2Go), Peugeot (Mu) and Volkswagen (Quicar) enter the car-sharing space in Europe, making their fleets available by the hour, or even by the minute in the case of BMW’s DriveNow…
“This signals a recognition by these major car manufacturers that people no longer want to be encumbered with the ongoing costs and maintenance of owning a vehicle that they use for less than an hour a day on average, and so instead they are shifting their business models to one of ongoing maintenance as a service provider rather than a product retailer.”
These are interesting and challenging times for advertisers and brands. As Yochai Benkler points out in a recent Harvard Business Review article – ‘The Unselfish Gene’ the collaborative consumption trend goes against received wisdom:
“Companies such as Google, Facebook, and Craigslist have also found ways to become profitable by engaging people. Our old models of human behaviour did not—could not—predict that.
“The way these organizations work flies in the face of the assumption that human beings are selfish creatures. For decades, economists, politicians, legislators, executives, and engineers have built systems and organizations around incentives, rewards, and punishments to get people to achieve public, corporate, and community goals. If you want employees to work harder, incorporate pay for performance and monitor their results more closely. If you want executives to do what’s right for shareholders, pay them in stock. If you want doctors to look after patients better, threaten them with malpractice suits.
“Yet, all around us, we see people cooperating and working in collaboration, doing the right thing, behaving fairly, acting generously, caring about their group or team, and trying to behave like decent people who reciprocate kindness with kindness. The adoption of cooperative systems in many fields has been paralleled by a renewed interest in the mechanics of cooperation among researchers in the social and behavioural sciences. Through the work of many scientists, we have begun to see evidence across several disciplines that people are in fact more cooperative and selfless—or behave far less selfishly—than we have assumed. Perhaps humankind is not so inherently selfish after all.”
Certainly something for marketers to think about…
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