Top-down business is dead. People are now bypassing established brands entirely to get what they need from each other. Welcome to the sharing economy, just one part of an overarching collaborative ethos that is fundamentally revolutionizing not only our global economic system, but also our lives and our communities.
Smart brands needn't be threatened by the collaborative movement. Instead of holing themselves up in branded ivory towers, pioneering companies are redefining their relationships with consumers to form an active collaboration with them or other independent partners. These partnerships can create mutually beneficial change and empower organizations to make faster (and smarter) business decisions. Here are five ways brands can not only embrace, but thrive in the sharing economy.
1. Build trust
In her TED Talk, Rachel Botsman, author of What's Mine Is Yours: The Rise of Collaborative Consumption, says that "The real magic and secret sauce behind collaborative consumption marketplaces like Airbnb isn't the inventory or the money. It's using the power of technology to build trust between strangers." The social media-enabled open feedback loop that's built into the sharing economy is raising the bar on service standards. Brand reputation and trust is governed almost exclusively by the voice of the people. After all, without trust, why would you let a stranger sleep at your house when you're not there?
2. Listen and act
Establishing trust and enabling sharing requires engaging with consumers through all aspects of company operations, from new product development to messaging to brand relevance. Savvy companies that listen to their customers, and then actually take concrete action to address them directly, gain people's trust, money, and respect.
Of course, this is easier said than done. But here's one example of how a brand can do it right: National Car Rental is collaborating (via a private online community) with well-traveled customers who voiced their perspectives about the rental car experience. This open, honest dialogue informs important business decisions and keeps National in lockstep with customers' shifting needs. And it's paying off: National's membership and revenue have increased steadily over the past four years, and the company has won widespread industry praise and top honors for customer experience.
3. Adapt to fit the new economy
Prospering in the sharing economy will require some brands to borrow a page from the Spotify and ZipCar playbooks by catering to those who prefer access over ownership. Brands must find unique ways to emulate--not outdo--sharing-economy startups and innovators. For instance, Home Depot allows customers to rent tools and trucks for all their home improvement needs, rather than buy equipment that may only be used occasionally. And Toyota has designed the i-ROAD, a small, electric concept car eventually meant to be deployed in urban fleets and shared, similar to the bike shares popping up in many cities.
4. Build sharing into your pipeline
There is no one-size-fits-all business model for thriving in the sharing economy. Participation will mean, in some cases, extending a product's lifespan, or incentivizing customers to trade or share, rather than to throw away and buy new. For example, H&M customers can trade in used clothing of any brand for store credits, and the old clothes get resold or recycled into new fabrics.
You can embrace the sharing economy by expanding manufacturing sources, like the retail chain Nordstrom, which now sells custom handmade goods in-store and online through a partnership with Etsy. Or consider outsourcing distribution, as in the example of Walgreens, which recently ran a collaborative promotion with online freelance marketplace TaskRabbit, delivering over-the-counter cold medicines to the doorsteps of people who were sick at home.
5. Embrace others
Born from the recent tough financial climate, environmental and sustainability concerns, and the ubiquity of technology, the sharing economy empowers us to improve the greater good and solve problems together. For brands, this means rethinking business as usual. Brands have to think of their customers not just as targets or data points, but as active, ongoing partners; a quick look at crowdfunding sites like Kickstarter, Indiegogo, The Lending Club, or Kiva will reveal why. These sites are so successful because people want to see that they are making an impact. And when they do--when people are given the chance to share their ideas, wisdom, and aspirations, and to actively and authentically collaborate with others--they are willing to invest their time, money, and energy toward the collective good.
In order for brands to evolve, adapt, and ultimately flourish within this new economic reality, they'll need to fundamentally reframe their relationship with consumers. Sharing is a nonstarter without equal partnership and trust. Trust is the currency of the collaborative economy, and brands have to actively invest in order to get results.