The New Rules of the Collaborative Economy
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Jeremiah Owyang, a leading authority on the collaborative economy, and Andrew Reid, Founder of Vision Critical, offer a fresh perspective on the disruptive effect of peer-to-peer businesses and what you can do to keep your business and role relevant. Download the full report for more info: http://ow.ly/Vm4cH
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The New Rules of the Collaborative Economy
- 1. WEBINAR: The New Rules of the Collaborative Economy #NewRulesOfSharing
- 2. Jeremiah Owyang Founder Crowd Companies @jowyang Andrew Reid Founder and President, Corporate Innovation Vision Critical @reidandrew
- 4. Agenda Understanding disruption “Who” is the Collaborative Economy Strategy: Deep Customer Understanding Tactic #1: Compete on Price Tactic #2: Compete on Convenience Tactic #3: Compete on Brand Q&A
- 9. The Collaborative Economy Honeycomb 2.0 Download here: http://bit.ly/1ywL8XV
- 11. We found significantly different rates of participation and growth in the 13 categories of sharing we studied. We asked: In the past 12 months, have you ever used a website or mobile app for a sharing service?
- 12. More than six in 10 Americans will use a sharing service in the coming year We asked: In the past 12 months, have you ever used a website or mobile app for a sharing service?
- 13. Factors that influence the decision to choose sharing over buying We asked: You said you would prefer to share [buy]. What would make you consider buying [sharing] instead?
- 15. Today’s businesses urgently need to know what makes customers choose sharing over buying
- 16. STRATEGY: Understand your customers on a deeper level.
- 18. The competitive advantage of customer intelligence Anticipate and resolve customer issues Boost brand affinity Increase customer growth and loyalty
- 19. Navigating the risks of the collaborative economy 1. Compete on price 2. Compete on convenience 3. Compete on brand
- 20. Tactic #1: Compete on price
- 21. Factors that influence the decision to choose sharing over buying We asked: You said you would prefer to share [buy]. What would make you consider buying [sharing] instead? More people will choose to buy if it means they can save 25 percent.
- 22. Respondents, by age, who would consider sharing instead of buying to get a 25% savings
- 23. GM: “Let’s Drive” NYC
- 24. IKEA: online marketplace for used furniture
- 25. Tactic #2: Compete on Convenience
- 26. The most popular reasons for using sharing services We asked: In the past 12 months, have you ever used a website or mobile app for a sharing service? REASON FOR SHARING
- 27. People are more likely to switch to sharing if it’s more convenient
- 30. Tactic #3: Compete on brand
- 31. People are more likely to switch to sharing for a known brand
- 32. Top sharing brands Service used in your latest sharing transaction
- 35. Taco Bell and DoorDash
- 37. Four big questions for big brands: 1. Are you willing to give credibility to a new player? 2. Can your product or service endure third-party handling? 3. Can your potential partner deliver a service consistent with the quality your business delivers? 4. Does the sharing service live up to customer experience expectations you’ve architected?
- 38. Sharing is here to stay If you’ve been waiting for sharers to get disaffected by the collaborative economy, and come flooding back to their traditional buying habits, you’ll be waiting a long time. Sharing is here to stay.
- 39. The world’s most successful companies use Vision Critical to win in the collaborative economy. Discover how: Visit the PLATFORM page on visioncritical.com
- 40. © Aurora Health Care | 40 Watch a four-minute demo to learn how the Vision Critical platform can help you connect with customers and elevate your brand.
- 42. Download the full report
Editor's Notes
- Jeremiah - Jeremiah helped major companies navigate the first phase of sharing, called social media. He’s committed to helping companies through the second phase of sharing, as people share and create the physical world around them. Over the course of his career, Jeremiah has identified big trends before they happen, and helped major companies through the transition and advised and influenced business leaders globally. His online publications are frequently quoted in publications and media, such as WSJ, NYT, USAToday and more. Andrew Reid - In 2000, Andrew Reid created Vision Critical to disrupt the traditional market research landscape. By leveraging the power of social, mobile and web technologies, Andrew transformed the industry by developing secure, online communities of thousands of customers known as the Vision Critical customer intelligence platform. He has been spoken at customer intelligence and marketing technology events around the world and his ideas have been shared on Wired, CNN, Fox News, Bloomberg, Business Week and more.
- Something monumental is happening around us. We’ve been calling this moment the “Customer Revolution.” Forrester calls it the “Age of the Customer.” A recent report from Gartner says that by 2017, half the investment companies spend on product development will be diverted to improving the experience of customers. How will it effect each of our businesses? For the moment, that is largely up to you. You have an enormous opportunity to effect how this revolution impacts your organization.
- It’s truly amazing how fast the Internet is revolutionizing our world. Three billion people are now connected over the web. By next year, there will be 2 billion people using smartphones—500 million people in China alone. And what are they doing with that connectivity? They are becoming their own intelligence eco-systems, assembling knowledge about your products and services and then delivering opinions about them in real time…every so often, shifting the fate of your company. Businesses can either embrace the empowered customer or die.
- The empowered customer demands a different relationship with companies. And companies, emboldened by new technologies, are rising to the challenge. If you’re in the brick and mortar retail space or the hotel industry, you are witnessing the reinvention of just about everything. Facebook is the biggest publisher in the world despite owning no publications. The biggest provider of overnight accommodations, AirBnB, owns no hotel properties. Many of the biggest retailers, including Alibaba and Amazon, own no stores. And for the TV or movie industry, themain competitors today were once your most important distribution partners. Why are these companies succeeding? Because they understand their customers better than their competitors. They are data hogs. Gathering enormous amounts of data, developing hypotheses, testing them, analyzing, iterating and of course engaging those customers to learn even more. Make no mistake, these companies may look like retailers and hospitality providers, but their differentiators, their reason for being is all around using information to understand their customers in ways that no one else can. And they are winning.
- Who is participating? More than 110 million North Americans are now part of the collaborative economy. Participation has grown by 25 percent since 2014 Growth has come from people who broadened their sharing from buying and/ or selling pre-owned goods to trying the next generation of sharing services.
- 13 different categories of collaboration: two new categories, online learning and Bitcoin. Biggest lift is in space to stay and pre-owned goods. Probably nor surprising as the sharing economy businesses in that space are becoming well established and well known brands. Transportation services are probably have the most unrealized potential due in part to the challenges businesses like Uber have had breaking into some markets, and some particularly unfortunate stories that have tarnished their brand somewhat.
- Not only are more American’s participating, they’re trying new and different services. The small declines we’re seeing across various categories is not due to people leaving sharing economy, but a dilution of activities. In other words lots of people trying lots of new things. This holds true everywhere except for pre-owned goods, where the drop my be related to frequency of use or perhaps a bad experience or some other anomaly.
- Price still rules the day. It’s an market force we can never escape. We’ll dive into this again in a few slides, but what’s worth noting is that we’ve learned that price is a huge motivator and probably an advantage for big brands in that upwards of 70% of sharers told us they’ve go back to buying if the price was right. Another thing to consider: businesses that loose a customer on price in the sharing economy are going to have a really tough time getting them back
- What this data shows is how fast things are changing. The uptake is phenomenal and the pace of change is astonishing. But the data is just numbers. Behind that data are the people who are making a decision to try something new and different. And they’re not making those decisions in isolation. They’re asking their friends, family and followers for advice and insight. They’re sharing their experiences and influencing other people in the process. Imagine if you could be part of that conversation. Imagine if you could connect directly with customers to get a better understanding of not only who they are, what they do and where they do it, but why. Here’s a few stories of companies who have done exactly that. They’ve gone out to their customers – a crowd of engaged, interested people and opened a dialogue with them directly.
- Mobile-enabled, on-demand, customized products and services are fast becoming the new normal and companies that fail to offer customers what they want, when and how they want it are in even greater peril.
- If you understand what motivates your customers and how trends shape buying behavior overtime, you are better prepared to pivot proactively and evolve your strategy and explore tactics that allow you to: Compete on Price: The collaborative economy is a highly price-sensitive marketplace. More than half of customers can be swayed between sharing and buying by the prospect of a 25 percent cost savings, and three-quarters of sharers cite price as significant motivator. Compete on Convenience: As sharing services become increasingly identified as large, global powerhouses this tactic is really about the shift from convenience as it relates to “location” and more about the notion of the ability to provide local goods that appeal to community-minded sharers. Compete on Brand: Brand is the most useful path for companies with strong brand recognition and positive brand sentiment, particularly in markets where customers are sensitive to risk. Big brands have tremendous value and clout and it important to leverage that recognition.
- price is the most important driver in switching buyers to the collaborative economy—or back again. And we know that price isn’t just important in hypothetical scenarios: when we asked people about their latest sharing transactions, we found that getting a better price was an extremely or very important factor in 68 percent of sharing transactions. An especially big driver for home furnishings and car rental.
- Young people are even more motivated by price. An interesting fact given some of the assumptions about millennial and “values” driven purchase habits. The fact is, they are motivated by price and willing to explore categories an older demographic may shy away from – home furnishings and gifts for example. This may be related to the quality of the goods people are buying in these categories as an older, more mature buyer may be looking for products that simply aren’t available on Ebay or Craigslist while a younger buyer my be less, discerning or critical perhaps – or to put a positive spin on that – more open minded.
- http://mashable.stfi.re/2015/10/02/gm-car-sharing-program/?sf=dzdybr&utm_content=buffer6b760&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#A1S1S.L8zmq0 Let's Drive NYC was developed by a tech "startup" within GM that explores the way mobility is changing. The program is expected to grow beyond Ritz Plaza residents, and is a partnership between GM, Icon Parking Systems, and real-estate developer Stonehenge Partners.
- IKEA Norway ran “The Second Hand Campaign” for eight weeks, allowing 50 customers to sell their used IKEA furniture. IKEA used a multi-platform ad campaign and used its Facebook Page as an online flea market every Sunday during the campaign. All items were sold.
- Convenience is not a powerful as price, but it is ubiquitous across categories and another bog motivator for younger customers. This is a challenge for big brands to address and a significant weakness given reliance on traditional infrastructures, manufacturing, scalability and more. This trend is not impact by age. If it’s easier or more convenient, big businesses are vulnerable.
- The whole value proposition of sharing services lies in their ability to provide on-demand, web-enabled, instant access products and services. To compete with that kind of convenience, companies need to develop their own on-demand offerings, by offering brand as a service. Presumably this is an apples to apples comparison? Same product, same price… Gifts is an interesting one here, we see very little sway because of convenience. You’d think if it was this same item for the same price but easier to get it would be an easy win to switch. But again because it’s a gift perhaps it’s an item that people want to see and touch before buying it as a gift and that vetoes convenience.
- Hyatt and Onefinestay launched a pilot program at The Churchill in London, allowing early-arriving Onefinestay guests a place to drop their bags and freshen up.
- Instacart delivery of Target groceries and household items is available to select cities in California and Minnesota. Expansion is planned. ANDREW COMMENTARY: This is an interesting pocket for big brands to explore. The question is “Do I disrupt my own model and go it alone internally to develop a specific application or technology or do they partner with specialists who can offer an out of the box solution that can be customized in some fashion. Not an easy choice. In my opinion the obvious choice is to partner with a business that lives and breaths the technology you need so you can stay focused on strategy and delivery.
- DRIVING BUSINESS WITH TRUST This is where big brand can take back some of the competitive territory they sacrificed on convenience. People know and trust big brands and that has a big impact on their decisions. But it swings both ways because bigger, more recognized sharing business are also cashing on on the value of the equity and the trust it inspire in customers. I think what can’t be overlooked here is that some of the bigger sharing business are really becoming “big brands” in their own right. They may not have the heritage or equity of a massive global brand, but they are slowly earning the trust of consumers and building their equity there rapidly.
- Brand recognition brings risk: as sharing services become better known, they can attract negative as well as positive sentiment. And that risk is much greater for sharing brands than for conventional brands, because so much of the sharing experience depends on the users themselves. Negative Sentiment may also be linked to a lack of understanding about the service; “I don’t understand this so I don’t like it.”
- Hasbro enables customers to 3D print products via Shapeways, and crowdsources games with Indiegogo After the first round of submissions, finalists will launch Indiegogo campaigns to crowdfund their ideas.
- Taco Bell delivers food directly to its customers’ doorsteps with DoorDash partnership The chain has teamed up with DoorDash, a company that handles food orders and deliveries, to deliver to more than 90 cities and 200+ participating locations in and around L.A., San Francisco, and Dallas. No minimum order size required.
- In-N-Out sues food delivery service DoorDash for “trademark infringement and unfair competition” In-N-Out’s complaint is based on concern over delivery time (affect on food temperature) and food handling practices. DoorDash reportedly used a fake In-N-Out logo on its website as well.
- ANDREW: As a big brand dipping their toe into the sharing economy here’s four questions to consider.
- Andrew
- Thanks, Andrew and Jeremiah. Today we learned about some great examples of how to win in the collaborative economy. As these big companies have learned, there are ways you can win effectively, but to really be successful, you need to understand customer sensitivity around price, brand loyalty, convenience and the easiest way to do that, is to use the Vision Critical platform. The four key features that make us a powerful tool are… Continuous, trusted insight direct from your customers Member engagement at the speed of business The science of market research built-in All in an enterprise-grade technology Vision Critical is a critical part of the technology stack for the world’s leading brands. Throw to Q&A The three tactics we suggest to compete in the collaborative economy are contingent on having a long term strategy in place that aligns with your brand values, customer experience, customer expectations and the resilience of your product. It goes without saying that successful execution requires a robust understanding of your customer’s attitudes, purchase behaviours, loyalty and more. So much can change in a short period of time – your industry, your customers, and how You need not a a snapshot in time, but an ongoing understanding that evolves and improves overtime so you are always ready to anticipate and pivot.
- Andrew
- Andrew