0

The Future of Collaborative Consumption

Collaborative consumption – our future?

For my final post I am exploring the future of "Collaborative Consumption", because I would like to find out if it is possible to implement this in our world in order to answer the question if people have to focus on this concept because it will be of significance to them prospectively.

In my research I found out that there are three main categories that promote the collaborative consumption: Technology, Economy and Society

In the following I am going to explore what supports and what harms these driving forces.

Technology

The technology sector shows innovative development that encourages sharing.

Sohin Shah supports the idea that consumer behavior changed due to economic development in – among others – increasing demand for social networking and online platforms. It is obvious that networking encourages sharing, because it facilitates communication and connection.

However Chris Maag analyses that the development of the sharing economy is connected to the development of trust in the internet as well. He claims that if trust in the internet and thereby in the platforms/networks does not increase, the development of collaborative consumption will be harmed extensively.

Maag’s argumentation is reasonable due to the fact that there are for instance a lot of people who suffer from techno-phobia and who are consequently more likely to not consider sharing online. Thus, a huge part of the economy would be inaccessible for them.

Society

In the society there are also drivers for collaborative consumption.

For once there is a demand for sustainability.

Some see sharing, with its mantra that “access trumps ownership”, as a post-crisis antidote to materialism and overconsumption. The Economist: All Eyes on the Sharing Economy

Nevertheless The Economist promotes that new rules have to be established, because the existing ones are only adapted to the existing economy. However the new market-model requires laws for consumer protection etc. as well.

Besides people are searching for communities, they have the desire to belong to something. Collaborative consumption enables them to satisfy their want.

In contrary to that Neal Gorenflo claims that as collaborative consumption gets more spread people might loose the interest in it, because you will face a lack of social experiences made which captured the attention of many people in the first place.

Generally the desire to get something you do not have is stronger than the interest you loose in something because it is no longer a special thing but mainstream. Therefore the disinterest might not influence people that much.

Economy

Economic aspects promote collaborative consumption as well.

Marc Suster points out that current situations like unemployment in Spain, Greece and other countries affected by the financial crisis call for a change of consumer behavior.

In my mind there is no doubt this a lifetime trend. […] necessity is the mother of all invention.

Kelly Mc Cartney even claims that “with the sharing economy gaining more and more steam, major corporations can either hop on board or get run right over…” whereby he promotes a recently published report from the Alimeter Group.

On the other side of this argumentation one observes strong opponents to this attitude.
Milo Yiannopoulos might be the biggest public opponent of the sharing economy. He is the founder and editor-in-chief of "The Kernel" and holds the opinion that collaborative consumption contradicts the "human nature, entrepreneurship, free-market capitalism and even common sense". He entitles the concept to be an ideology.

Conclusion

So what does this tell us? People’s opinions are different and everyone has a profound argumentation. If the collaborative consumption will last finally, nobody knows for sure. However it is a matter of fact that due to the global development a change of consumer behavior is made an thus there will have to be a change in economic behavior accordingly.

0

Drivers of Collaborative Consumption

What drives collaborative consumption?

I am exploring the concept of "Collaborative Consumption", because I why it is an emerging trend in order to find out whether it is a concept that should be implemented by firms.

A lot of people are talking about the new way of consumption – the sharing economy. In Berlin a conference took place just about a month ago, so there are discussions going on.

But why are they even talking about it, why is there a need for collaborative consumption?

In my research I found out that there are three main categories that promote the collaborative consumption: Technology, Economy and Society

Technology

Who does not have a facebook account? Currently a statistic of March 2013 reveals that there are 1.11 billion users. And what to people do on facebook? – They share a huge amount of information: photos, likes, dislikes, friends etc. This is exactly one contributor to the rise of collaborative consumption.The social networking is increasingly immensely.

Besides mobile devices play a more important role in the daily life. People are communicating more and consequently they are sharing more information. Platforms are also expanding and encouraging the flow of information.

Economy

In the economic sector the financial flexibility is of higher value. People being more flexible and independent are more likely to also share instead of just investing.

People also like the idea to own something. With sharing this is facilitated because people have more access to certain goods that for example haven’t been affordable before.

Moreover the global recession requires a change so that people are searching for alternate ways of living.

Society

One driver is definitely the increasing population rate, because there are often more people than there are resources. Thus they are willing to share in order to increase access to those resources.

Furthermore there is a need for sustainability in the world which encourages people to share.

Additionally there is a desire for community. Nobody wants to be alone and experts like Rachel Botsman and Roo Rogers, the authors of the famous book "What’s Mine is Yours: The Rise of Collaborative Consumption" believe that

Collaborative Consumption is enabling people to realize the enormous benefits of access to products and services over ownership, and at the same time, save money, space and time, make new friends, and become active citizens once again.

Conclusion

The Collaborative Consumption is a trend that arises from certain developments in the economic, social and technological sector. Thus it is of great importance that companies realize this movement and try to adapt their concepts to it.

0

Collaborative Consumption – Firm’s threat or opportunity?

Collaborative Consumption – Firm’s threat or opportunity?

I am exploring the concept of "collaborative consumption", because I would like to find out whether it is a concept that should be implemented by firms increasingly in order to enhance their operations.

A lot of people are talking about the new way of consumption – the sharing economy. In Berlin a conference took place just about a month ago, so there are discussions going on. What are opportunities, what are challenges, is it even possible?`

In this post, I want to lay the focus on the companies’ perspective.

Challenges/Disadvantages

Collaborative Consumption does not only seem to be the best alternate way to corruption for everyone.

There’s a consumer movement afoot that could make traditional marketers nervous. The emerging “collaborative consumption” trend, marked by “access to” versus “ownership of” goods/services, might seem like an outright sales killer – after all, if people are sharing your product/service, how will you sell more of it?

Obviously it illustrates a threat for the companies that people are increasingly considering to share instead of to buy. Thus sales might decrease and firms would face trouble to cover expenses.

Another important point is that there is a great possibility that the economy as a whole slows down. Demand has to meet Supply in case of a stable economy. If demand would decrease due to increased sharing, supply would have to decrease as well. However this requires time, so that a drastic change in consumer behavior could harm the economy.

Opportunities/Advantages

Still companies can benefit from the sharing economy.

Firms can profit longer from one single asset by lending it out several times instead of selling it directly.

Besides if people decide to buy an item collaboratively, they might be willing to spend more on it because it will be used more often.

Additionally new customers enter the market who e.g. could not afford a certain service before but do now because it is cheaper to share. The AirBnB enterprise for example offers rooms to travelers. A scientific study revealed that a lot of those people who rented a room would not have used the service if it had been more expensive due to not offering the possibility of sharing.

Threat or Opportunity?

It is an ongoing discussion whether collaborative consumption is more a benefit or a loss.
Form the producer’s position it is dependent on the company’s concept. How is it structured? Who are its main customers?

Thus it can only be answered individually, whether a firm should implement this concept or adjust its processes to the new way of consumption.

0

Collaborative Consumption

I am discovering the topic of "collaborative consumption" in order to find out if this is a concept that could be established and adapted in our society to create a more sustainable economy.

Is it really possible?

Yes – it is. As companies like Carpooling have shown how it works.

The site has 4.3 million registered users that have traveled over 150 million kilometers saving over a million tons of CO2.

People are already benefiting from it. It is no longer new or strange to do couch-surfing, share a car, resell your clothes or other items. It is rather a way out of destroying the resources we have furthermore, out of corruption and out of the unsustainable way of living of the last years.

What holds us back?

There are several reasons for people not to follow the example of so many other people who already realized that how they behave and act is inappropriate taking in consideration the world’s development.

In my last post I already reported on some reasons for this behavior:

  • laziness
  • lack of information
  • lack of technological know-how

But actually this week I experienced a reason that for me is the worst one.
The website www.mitfahrgelegenheit.de which is a platform where people can offer seats in their car. I have already profited from this service. It serves to save some money, you get to know new people and you get to the place you want to go to.
However recently the owners of the website introduced commission fees. For each person you carry with you, you have to give 30% of the price you get paid to mitfahrgelegenheit.de. Thus, a lot of people abandoned the mitfahrgelegenheit-community and decided to orientate themselves differently. Consequently there are a lot of people who loose access to that service and who can’t profit from it anymore. The actual sense of collaborative consumption got lost here.

I think this is especially a sad case, because the website started being a really good example showing how collaborative consumption can be implemented in our society, but now it is revealed that the corruption is so manifested and sessile in people’s minds that it is still a long way to go to achieve the concept of a more sustainable economy.

0

A way out of corruption


This week I am working on the topic of Collaborative Consumption also referred to as ‘the sharing economy’, because I would like to find how this concept is applied and can be used for in order to create a more sustainable world economy.

Comparing the type of consumption of the last century with the one we observe and experience today, you can identify a complete turnover – away from an egocentric approach towards a sharing based behavior.

Nevertheless, there is still more to do:

Nowadays were we live in a world full of over-consumption and corruption, it is pretty important to find away out of this destroying way of life.

How to get on that road?

Collaborative Consumption might be the answer. Companies like the Deutsch Bahn GmbH amongst others show how this works. It offers the ‘Call a Bike’ service, where people can simply rent bikes. Then there is this page www.mitfahrgelegenheit.de where people offer that you can travel with them by car or train. I have already made great experiences with traveling using those services: for one, it is a lot cheaper to go by car-sharing. I would have to spent four times as much if I would go by train to visit my family’s house – so it’s worth considering alternatives. On the other hand, and this is the crucial aspect here, making use of this service reduces emissions caused, because the five people you are traveling with, do not have to take their own cars and thus those emissions are economized.

The site has 4.3 million registered users that have travelled over 150 million kilometers saving over a million tons of CO2.

If people were considering this alternative consumption behavior we will finally get a little closer to the desired emission cut of 80% till 2050.

Why is this not a common way of living?

Laziness – simple, but true. A lot of people are reluctant to change their way of living, although this might cause serious trouble in the future.

On top of that, some are just not aware of the possibilities one has, to share, so there is lack of information. Especially older people don’t have access to new technology or have difficulties to handle it, so that they can’t make use of for example sharing platforms like "swap".

It is an issue constantly discussed – the global warming. And people are contributing to it intensively. It would only require small changes to improve the prevailing situation just like sharing – so why should we stand aside watching?

24

Collaborative Consumption

Useful or Useless ?


I am working on the topic of Collaborative Consumption also referred to as ‘the sharing economy’. I am working on the topic of Collaborative Consumption also referred to as the Sharing Economy, because I would like to find out whether it is a concept companies tend to implement increasingly as well as what advantages and disadvantages it comes along with, so that businesses know if it is worth considering this alternative way of operating.

I would like to start pointing out advantages and disadvantages of the sharing economy.

Firstly, from the consumer’s point of view, it is a lot cheaper to share e.g. a car, than to own it solely. In my research I found out, that one guy is able to save 16800 $ annually by sharing. For further information visit: http://p2pfoundation.net/CollaborativeConsumption#EconomicValue.

Then, on the one hand, vendors profit over a longer period from one single asset as they can lent it several times and thus charge consumers each time. On the other hand, this is considered to be a loss for producers, because the assets loose value over time and may not meet the latest standard so that demand might decrease.

A very essential argument in favor of collaborative consumption is the sustainability it creates. I think especially nowadays were we live in a world full of over-consumption and corruption, it is pretty important to not forget this aspect.

Collaborative Consumption is enabling people to realize the enormous benefits of access to products and services over ownership, and at the same time, save money, space and time, make new friends, and become active citizens once again. <

This is a quotation from the currently most famous book "What’s Mine is Yours: The Rise of the Collaborative Consumption" by Rachel Botsman and Roo Rogers. I would agree with them saying, that one can save money with collaborative consumption. For example, I made the experience that it is a lot cheaper to share the car with other people when you are traveling long-distance than going by train or by airplane. However, I think it is a little bit exaggerated to state that one makes friends because of the sharing economy, because normally people share because they want to get a certain utility and not to meet new people. So I consider this to rather be a side-effect.

On top of that, some people argue that sometimes sharing is not safe. There are people who are afraid that if they for example do couch surfing, they will be robbed.

But there are already examples of businesses implementing this kind of operating-strategy.

Universities for example are using the same servers for their computers and some airlines are carrying also the packages of FedEx as well as the ones from its competitor U.S. Postal Service.

The Deutsch Bahn GmbH offers the ‘Call a Bike’ service, where people can simply rent bikes. Then there is this page www.mitfahrgelegenheit.de where people offer that you can travel with them by car or train. This for example also has the effect that less emissions are caused.

In Berlin a conference took place on (05/13/2013) – the first conference. Consequently the concept of the sharing economy is getting important increasingly. People start talking about it and thus people are considering it.

The Rise of Collaborative Consumption, expects the consumer peer-to-peer rental market to become a $26 billion industry.

Literature: