6 Ways The Shared Economy Is Changing Marketing
The shared economy has been around for a while now, however it's impact on the New Zealand market is only just beginning to be seen. It's development here will be of particular interest in the coming years.
A shared economy is defined as a socio-economic system where individuals are able to access resources without ever owning them. Characterised by the sharing of individual human and physical resources that would otherwise be not fully utilised. The shared model is often enabled by technology; like Internet and GPS and peer-to-peer networks. Examples include Uber, AirBnB and Kickstarter
Here are some key characteristics of the sharing economy that will influence our approach to marketing.
The common practice of creating peer-to-peep accounts that have inbuilt trust systems such as TradeMe have helped open people to the idea of connecting online with strangers. Inbuilt rating review systems within the likes of Uber and AirBnb mean users are willing to interact with strangers .
The development and promotion of these trust systems will be important to ensure these services maintain their reputation as safe providers.
Social & Economic Drivers
Factors that have helped to drive the growth of the sharing economy are:
- Sustainability; shared use of what we have collectively rather than creating more for individual use
- Increased population density; a high number of providers and customers in close proximity to each other enabling easy-shared access.
- Recessionary pressures; causing individuals to consider sharing underused resources and customers to look into ‘renting’ rather than owning.
- Generous mindset of the millenial generation.
These factors should be used to develop an understanding of the target audience for shared services.
Utilising under capacity or idle resources
Central to the shared economy model is the idea of providing access to resources or services that are underused or idle. Individuals ‘rent’ access to resources such as cars, apartments, freelancers or services.
This concept is going to give rise to many potential opportunities for a variety of new shared services, particularly as more people come to trust the idea of sharing rather than owning.
Millennials are taking to the shared economy model as it aligns with their preference for owning an experience over owning assets. This is demonstrated by being able to access resources they would otherwise not be able to afford or have the desire to own indefinitely.
Again understanding the different types of people that are attracted to the shared concept and identifying their unique preferences is key to effectively marketing to your customers. For instance, retirees are going to be attracted by services that are more secure and comfortable, while younger generations are likely to be more interested in cost and efficiency.
Widespread access to modern technologies like GPS and Internet enabled phones provides the opportunity to operate shared economy models. GPS is used by the likes of Uber and AirBnB to connect prospective matches. While Internet peer-to-peer platforms help to match a service provider with a person in need of specific skill set.
Taking avantage of technological developments will mean you can continually update your offering. This might be an App update to provide a better customer user experience or by finding efficiencies by streamlining processes.
By sharing a resource you are spreading it’s cost across more users, therefore lower the individual financial commitment to it. For example a high cost resource such as an office space could be shared to increase it’s utilisation and lower it’s user’s individual cost to use.
As more companies enter into the shared economy space, companies will have to ensure price competitiveness to maintain market share.