Collaborative Consumption – Opportunity Or Threat For Brands?

Posted: February 21, 2014

by Added Value director, Alison Tucker, and project manager – brand, Thabang Leshilo

‘Access trumps ownership’ is the mantra of collaborative consumption, a post-crisis antidote to materialism and over-consumption strongly driven by the onset of the 2008 global financial crisis1 as well as an increasing awareness of the negative impact certain lifestyles have on the environmental health of our planet.

This contemporary consumption model heralds a shift in consumer perception regarding the value of a product. Previously viewed in outright ownership terms, this is now beginning to be seen in terms of its use2.

For example, in several western European countries where second hand goods were previously frowned upon, collaborative consumption has become more sociably accepted and even provides social credibility.

‘Vintage’, the rise of online markets and the ‘hipster’ subculture are manifestations of the ‘asset-light lifestyle’, the ‘peer economy’ or ‘sharing economy’. So, too, are the New York bike sharing system, Citi Bike, as well as London’s ‘Boris Bikes’; Airbnb, RelayRides, Uber, Avis/ZipCar; and delivery service, Delive.

By contrast, in a developing market such as Brazil where luxury items are sought after by urban consumers, the trend is expressing itself in collaborative consumption services that provide access to an affluent lifestyle. Take, Babags, a network for renting luxury bags in Rio de Janeiro, as an example.

The benefits of collaborative consumption for the consumer, as stated by Wikipedia, include reducing carbon footprints by sharing transportation, saving on the cost of living by borrowing and recycling items, and enhanced experiences and increased happiness and contentment due to positive social interactions. Drawbacks include the legalities around insurance, lease agreements and maintenance.

In developing or under resourced countries, collaborative consumption also facilitates the development and sustainability of communities and individual. For example, sharing work spaces, educational toys and books, medical items such as wheelchairs, electrical items such as sound equipment, luggage, trailers and delivery vehicles, jewellery, and internet access in apartment buildings or neighbourhoods, etc.

But does the collaborative consumption model have any benefits for brands?

We have to acknowledge that there is the very real threat of a loss in revenue given potentially lower unit sales. However, several brands have already acknowledged the opportunities. IKEA has created pilot programmes to incentivise customers to sell their used furniture, for example. The rationale for doing so would include building goodwill with those customers who would regard the programme as being environmentally-friendly as well as creating a future market for new IKEA furniture as someone who aspires to IKEA but can’t afford it now would presumably one day be able to.

There’s also the if you can’t beat them, buy them model – Avis has invested in Zip Car, BMW partnered with ParkatmyHouse.com, and GM Motors invested in RelayRides to presumably lock-in some kind of future market.

Positive spin-offs for brands include creating emotional connections with consumers and showing the brand cares for and understand their needs; driving awareness and consumption through branded initiatives; connecting owners with unused assets (bridging the economic divide); and developing a good reputation through social, environmental and sustainable initiatives.

Certainly, South Africa is no stranger to the concept with its stokvels (collaborative financing), network of domestic workers and gardeners (collaborative employment), school and work lift-clubs and our unique minibus taxi service (collaborative transport), and even sharing Matric dancewear.

Perhaps the future will provide us with even more opportunities to share without ownership – imagine sharing a pet, your wedding, even grand-parents!

Sources

1. The Economist, The sharing economy: All eyes on the sharing economy, March 2013

http://www.economist.com/news/technology-quarterly/21572914-collaborative-consumption-technology-makes-it-easier-people-rent-items

2. Pablo Barros, Behaviour Change: Collaborative Consumption and the Sharing Economy in Developing Markets, April 2013. http://www.sustainablebrands.com/news_and_views/behavior_change/collaborative-consumption-and-sharing-economy-developing-markets