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The Collaborative Economy

collaborative-consumption

By Adriana Rocha

Mobile and social technologies have changed communications, marketing, and customer care. There are many evidences that such technologies will disrupt market research as well, despite the resistance of a “more conservative” side of this industry. In a recent article, I mentioned that we are entering “The Golden Age of Market Research Technologies”, since I believe we are just beginning to learn and effectively applying the usage of social and mobile technologies to innovate and create new opportunities for market research. But if you believe that such technologies will not cause more disruptions, keep an eye open on the next big trend: with the same technologies, consumers are now sharing products and services with each other, bypassing existing companies and institutions.

Beyond new business functions, a new consumption model is rising (also called “collaborative consumption” or “collaborative economy”) and will impact core business models. In this new economic model, the crowd becomes a company! Scary?  Have a look into some indicators:

  • Hundreds of start-ups like Airbnb, Yerdle and Lyft have emerged to let people share goods and services
  • Venture Capital funding is accelerating this trend: more than 2 billion dollars has been invested thus far by VCs in collaborative economy startups, with $28mi average funding (Lift raised US$60mi in funding in May 2013)
  • WikiSpeed ( a business that crowdsourced designs, production and development ) has created a SAE-registered, road-legal-approved car, the Wikispeed Car, now on sale in limited quantities
  • Start-ups such as HandShake  provide platforms for consumers to control and sell their own personal data

With this new trend, companies risk becoming disintermediated by customers who connect with each other. Let’s analyze, for example, the possible impact for the automotive industry: every car-sharing vehicle reduces car ownership by 9-13 vehicles; a revenue loss of at least $270,000 to an average auto manufacturer. The cascading impact to the ecosystem has far reaching impacts to auto loans, car insurance, fuel, environmental impacts, auto parts, and other services. For consumer goods companies, the direct impact is that consumers can now purchase one product, and share it among many others, reducing revenue in traditional business.

My recommendation: instead of fighting against the new, embrace it, rethink your business model.  The forward-thinking companies will probably motivate a marketplace, provide a platform, adopt a company-as-a-service model, or maybe the three of them. Thoughts?

References:

The Collaborative Economy by Altimeter

http://www.web-strategist.com/blog/2013/09/10/meet-the-empowered-people/

WikiSpeed

Techcrunch: http://techcrunch.com/2013/09/02/handshake/

HUffPost: http://www.huffingtonpost.com/jeremiah-owyang/in-the-collaborative-econ_b_3574118.html

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12 responses to “The Collaborative Economy

  1. Adriana, your thread contained “…….customers who connect with each other.” When Manufacturers/Distributors/Suppliers adopt a partnering marketing platform that understands that consumers always start with 911 or 411 they will share in the ROI of such action! Adriana, your last paragraph comes close as too a forula to the path of LOCAL marketing success. It is C2B and B2C that gives B2B validity.

    joe underwood
    Area Code Shopper
    Titan Fence, Inc.
    Woof Woof Roofs

  2. @joe, agree that could be a formula to the future LOCAL marketing success. BTW, there are big players, such as BMW, already embracing the collaborative comsuption. During a recent Stanford Collaborative Consumption Event (http://www.shareable.net/blog/stanford-collaborative-consumption-event-big-business-and-the-little-guy-in-the-same-room) , Peter Dempster from BMW’s future lab ( http://money.cnn.com/gallery/technology/innovation/2013/04/03/bmw-future-electric-car.fortune/2.html ) suggested that if BMW didn’t adapt to the new generation’s attitudes towards car use, ownership, and mobility, they would be out of business by 2050. LOL

  3. I have started to question, how collaborative economy will effect marketing research and strategic planning. Incase anyone has any ideas then please share links

  4. @Ayesha, it can impact MR in various ways…for example desintermediating the access to consumer data since consumers (using platfoms such as HandShake (http://handshake.uk.com/hs/index.html) can sell, rent or provide their data directly to any company). Also, companies in the same industry can use collaborative platforms to share data with each other (in our company we’ve built a platform for that purpose). With consumers sharing products and services, or buying from each other, there will be opportunities for developing new research models as well.

  5. @Adriana, you are making a great point. Collaborative economy has already had its effect on market research and honestly, it is only natural that it did. With digitization, being a major trend of the century it just makes sense for online platforms to arise and form a Marketplace. Sellers & buyers collaborate and share market research products directly, which makes it faster and cheaper. Clearly, these are client’s benefits. The question is, will conservative market research companies harvest the benefits of “sharing economy“?

  6. @Kate, nice points. Regarding your question, I think the MR industry or any player can benefit, once they can see the new opportunities in a collaborative model. See BMW, for example: “BMW says this model allows them to sell one car nine times (to sharers) “ (Peter Dempster, BMW Technology Office)

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