THE SHARING ECONOMY: WHAT’S MINE IS YOURS
The Sharing Journey
Sharing has always made sense. It is in our nature as humans. We are a tribal people, hunting in a pack, surviving as a group, as cave men and women we learnt how to share our resources. In more recent times during WWII on a global level, when resources were scarce, consumers learnt to share. They shared homes with those who had lost theirs, they shared their possessions, their food. Post WWII, that generation of consumers were a frugal bunch, their memories of the times when resources were scarce stayed with them. The held on to that sense of community, the need to share what you had with others.
The next generations (the Baby Boomers and Gen X) didn’t have that same foundation. They grew up in a post-modern world, where the machine of mass-production (honed during WWII) triggered the corresponding need for mass-consumption. Materialism was the new force in consumerism with ownership being the key value driver. You were nobody unless you owned the new car, the new house, went on the exotic holidays. People self-defined by what they bought and what they owned. But things have changed. They always do.
Something interesting is happening in consumer culture. Sharing has re-emerged, becoming not only an economic norm, but also a new social currency. The consumer is no longer the ‘end-point’ in a long transactional line but the centre of the relationship. The peer-to-peer (P2P) economy has become a force bigger than brands themselves.
You Spin Me Right Round Baby …
Look at the music industry as a perfect metaphor for the shift in consumer culture. Take most Baby Boomers or Gen X consumers and they will still have a fondness for their vinyl collection. Many still have it and a few of you even still play them. Back then your record collection was a sort of social currency. Friends would come over and flick through your album sleeves, your collection being a vinyl-grooved extension of ‘who you were and what you were about’. But then things changed. They told us CDs would not scratch or jump (they lied!) and so the soft crackle of vinyl died away to the laser precision of the compact disc.
Now, instead of a collection of cardboard sleeves in a corner of a room, consumers showcased their music collections in CD towers. Giant phallic symbols of music stretching to the living room ceiling. This was still consumer culture at its height. (Side note: The first CD I owned was Neil Diamond’s Greatest Hits, but the less said about that the better perhaps – although still a guilty pleasure on a long road trip!).
What happened next was hard for those used to OWNING a physical item. Along came MP3, the iPod and iTunes, and physical music collections vanished. The playlists inside your iPod or Laptop weren’t so visible and so their social currency waned. You could no longer really showcase your collection to your friends or even yourself. But we got used to it, eventually. And no sooner had we adjusted our sense of ownership from physical to digital, then the very concept of ownership died too. Now you stream your music.
You pick a playlist on Spotify and pull it from the cloud as and when you need it. If you extend this music metaphor to consumer culture at large, here is where we have an interesting cultural divide between Gen X and Gen Y (the Millennials). Why ever OWN something when you can just USE IT when you NEED IT?
From An Air Mattress to Consumer Culture
Air BnB is held up again and again as the poster child of the Sharing Economy, and it certainly has been an interesting take on market disruption. Why use a traditional hotel when you can just ‘share’ someone’s home? On one hand it is simply connecting buyers (I need somewhere to sleep) with sellers (I have a spare room/apartment) in a new way, more market evolution than sharing. This is evident everywhere as new market models emerge, re-connecting assets with potential consumers. You can even grab a private jet on the sharing economy courtesy of the App JetMe (scheduled public transport is so 20th century don’t you know!)
On the other hand the CULTURE which these sharing economy products breed is what we should be focusing on. The shift away from owning to sharing, from buying to renting, from physical assets perhaps being seen as a liability. Consumerism is in for a major overhaul if people stop consuming, after all we don’t call them ‘consumers’ for nothing. Perhaps we need to start calling them ‘users’?
The Millennial generation have also been reared with an eye on Sustainability and so they are a generation that perhaps cast back to that WWII consumer – aware that they should share their resources for the greater good, but this time also for personal benefit.
Take Jurrien (pictured above) who, alongside many other students, lives in the Dutch Residential and Care Centre Humanitas. In exchange for some volunteer hours every week, he lives there free of charge. He shares what he has (free time and energy) and saves over €350 in rent every month.
Sharing your living space is also the proposal for ‘The Collective’ – a new living approach due for launch in May 2016 in London. Here a huge abandoned office building is recycled into 10,000 square feet of shared living space. Residents have private bedrooms, bathrooms, and a kitchenette, but share all the amenity spaces with other residents – lounges, designer kitchens, gym, spa, cinema room, library, event spaces and private dining areas for hire. Why would each person own a living room when you can all jointly share one? Why each pay for wi-fi when you can all share it? Why buy a dining table and 6 chairs when you can just rent that space for the special occasions you need it? This is a culture that is simply embedded in the next generation.
Some industries are being slowly eaten alive by this new sharing culture. Banks are beginning to lose some of their relevance as crowd funding applications become more popular ways of raising funds, for both the personal and SME markets. The automobile industry is watching in horror as millennials become the first generation to not really value car ownership, seeing it more as a liability. The insurance industry is trying to get to grips with Apps like Cuuva, making it possible for users to insure themselves on their friend’s cars for as little as an hour at a time. “Use it don’t own it” is a worrying tag-line for a capitalist world driven by consumerist culture.
But there is little point fighting it. Like all culture changes it challenges the norm but perhaps this new model is Darwinism at work. We all know we are slowly killing this planet. We don’t need more ‘stuff’, and this next generation of consumers seem to get that. Perhaps this is how we will right those wrongs. If we consume less then naturally we would have to produce less. If mass-production resulted in the drive for mass-consumption, perhaps the reverse will also be true?
Gen Y want to live mobile and flexible lives. They will likely not only change job but change careers. Perhaps several times. And they expect the products and services they buy to be flexible and adaptive too. A 12 month broadband contract or a 5-year car loan … No Thanks. If you don’t build mobility and flexibility into your product offering today, you are living in the past.
And sometimes less is indeed more. I recently came across this minimalist branch of Morioka Shoten, (a Japanese book store) that sells only ONE book at a time for a week. The whole shop has just one book.
Perhaps we just don’t need all that stuff anyway?
Ken Hughes is one of the worlds leading Shopper and Consumer Behaviouralists, blending his vast expertise in consumer psychology, social & digital anthropology, behavioural economics and neuromarketing to answer the question to which he has dedicated most of his career: Why do shoppers buy and how can we make them buy more? Click here to read more
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