What do sharing upstarts like Uber and Lyft (cars) and Airbnb (homes) have in common (besides iPhone apps)? They both saw opportunities to make the markets they entered simpler and easier for customers to access.
But the disrupters don’t all have to be startups. Research by my colleague Fawn Fitter shows that companies that have been around forever can take advantage of the sharing economy if they pick up on two key trends:
- Embrace the dramatic changes in customer behavior favoring access over ownership. In the past, consumers wanted to own goods and hire employees, but recent studies show that increasingly they would rather have access to goods and services than own them. A 2011 survey conducted by car-sharing service Zipcar revealed that 67% of consumers aged 18–34 would participate in a media-sharing program, 53% in a car-sharing program, and 49% in a home- or vacation-sharing program. These numbers remained high among consumers aged 35–44: 57% wanted media sharing, 45% wanted car sharing, and 43% wanted home or vacation sharing.
- Convert products into services. Many companies are used to thinking of themselves as vendors of goods that can only be sold once. If they shift to seeing themselves instead as providers of services that can be resold repeatedly, they can get more value from existing resources. For example, when Xerox realized its customers didn’t want a copy machine so much as the ability to make copies on demand, it introduced resource-friendly, easily upgraded machines and shifted its emphasis from sales to leasing. This model extends just as readily to just about everything – appliances, power tools, cars, homes, software – turning them into sources of incremental profit. This also appeals to customer demands for efficiency and convenience, as they pay to access the equipment and products they need only when and as they need it.
Together, these two trends give a traditional company opportunities to create new forms of value and either boost loyalty among existing customers, take market share away from competitors, or reach an untapped demographic.
Recently, we interviewed experts about how companies can participate (safely) in the sharing economy in the Q&A Taking Advantage of the Sharing Economy: Mistakes to Avoid.