IS YOUR BRAND READY FOR THE COLLABORATIVE ECONOMY?
The age of hyper consumption is on the decline.
Our planet’s resources are struggling to sustain it and most interesting is the Collaborative Consumption trend. Consumers are now empowered through digital and social platforms, are beginning to shun traditional business models and are sharing anything from a room to a power tool. So, what’s in store for established brands as the age of collaboration takes full effect?
Consider these 4 questions:
1) What does it mean for brands with established distribution networks and massive capital infrastructure behind them?
2) Can brands continue to grow in ways they always have? Will brands be able to share their assets?
3) How will brands collaborate for greater good? What is the economic outcome of collaboration?
4) What is the balance between short and long-term stakeholder requirements?
Let's start by looking at the fundamentals of Collaborative Consumption.
If your brand operates in a market place where there are underutilised assets, then it’s likely that consumers and customers will be capable of sharing them. If the technology exists to facilitate sharing, then this will happen quickly. If a shared product or service unlocks new savings or new speed to market capabilities for the consumer then a new value proposition and market segment will be established. Lastly, if the consumer has been taken for granted over the decades then there is likely to be an attitude or appetite for disruptive behavioural change.
Trust and reputation are key drivers of performance.
The collaborative economy is like a step back into the past where trust and reputation was peer-to-peer based; where we knew the butcher, the green grocer or even our neighbour. We could easily assess their trustworthiness and knew about their reputation. It was personal.
As the age of the brand took over, trust and reputation was sourced via the institution and the brand. The brand became about critical mass and, hence, less personal. Success was derived through a brand's physical and mental availability to its customers and consumers –indeed, to a large extent, it still is.
So the age of collaboration is really a return to the past. It’s a return to peer-to-peer and personal, customised preference. The key difference is that today, this peer-to-peer trust and reputation is enabled by the emerging digital technologies that have created scale and an empowered, knowledgeable customers.
Collaborative economy example.
- Airbnb – Matches holiday seekers with short term accommodation with rooms and homes to rent.
- Uber – ridesharing network with access to drivers across the world and payment through an app.
- Car Next Door – Receive access and benefits of having a car without expenses involved with owning one.
- Green Collect – hard office waste collection which is up-cycled into new goods and sold through their retail store.
Opportunities that rise from the collaborative economy.
The first thing to acknowledge is that traditional ways and methods of commerce will always be relevant. However, the rise of collaborative businesses and brands will mean that there is the threat of disruption and in some cases serious market share loss.
However, we need to think of the collaborative economy as an opportunity.
Immediate opportunity 1 – Embed a Culture of Collaboration
The opportunity to embed collaborative thinking and behaviour into the organisation itself is massive for any organisation. The impact of collaborative technology, work practices and infrastructure has been proven by Deloitte Access Economics to increase the quality of work by 73%, increase innovation by 60% and increase employee engagement by 56%. If that’s not enough, collaborative organisations are twice as likely to outgrow their competitors!
Immediate opportunity 2 – Creatively find uses for underutilised assets
What organisation doesn’t have underutilised assets? How much creative thinking time is actually devoted to working out how these assets can be better utilised – not a great deal of effort is my assumption. CROA (Cash Return on Assets) is a key financial metric on asset utilisation and a hard measure to evaluate and define success of your collaborative efforts. Grow this ratio and your Finance Director will love you!
Immediate opportunity 3 – Call The Collab Agency for a deeper discussion
If being prepared for the opportunity the collaborative economy represents to your business, then please talk to us further about our Collaborative Workshops and Consulting Services.