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We also can’t underestimate the
importance of social sentiments and
the online review process. As Brian
Chesky, CEO of hospitality sharing
site Airbnb, once quipped, “Airbnb
is the worst idea that ever worked.”
After all, who would’ve
thought that so many
people would be willing
to let absolute strang-
ers invade their homes,
or that a traveler would
be willing to stay in
some stranger’s apart-
ment? Yet a few para-
graphs on the personal
experiences of a com-
munity of users – albeit
anonymous – provides
a level of trust that
formerly was leveraged
only by hotel brand
names and familiar
franchises. According to
Nielsen’s
2012 Global
Trust in Advertising
Survey
, 92 percent of
consumers in 56 differ-
ent countries said they
trusted word-of-mouth
or recommendations
from their friends and family above
all other forms of advertising. And in
the U.S. today, 64 percent of consum-
ers surveyed by PwC said that in the
sharing economy, peer regulation is
more important than government
regulation.
In turn, Airbnb averages about
425,000 guests per night, totaling
more than 155 million guest stays an-
nually. That’s nearly 22 percent more
than Hilton Worldwide, which served
127 million guests in 2014.
P2P Disruption
It’s easy to see how collaborative
consumption can be a threat to some, in
fact many, retail-driven businesses. If four
enthusiasts decide to share one graphite
mountain bike, as one obvious example,
therein lies the potential for less graphite
bike sales. Sharing site Yerdle, which lets
people give away their stuff in exchange
for credits they can use to “buy” other
people’s castoffs, has not been shy about
its ambitious goal of reducing the things
we buy by 25 percent.
“For incumbent players in mature
industries, the immediate challenge
is to avoid being disrupted,” warn
PwC analysts.
Then again, where there’s displace-
ment and disruption, there tends to be
opportunity, and many brands see the
sharing economy as a way to drive in-
cremental growth by lowering the bar-
rier of entry into an activity or service.
“A sharing marketplace can be a
great opportunity to drive engagement
and trial, allowing less active and pro-
spective customers to experience the
product firsthand,” states the PwC study.
Kelty, for instance, touts its gear rental at
GetOutfitted as a way to offer “camping
without commitment,” says Greene.
In the old model, an urban dweller
who wants to try backpacking or camp-
ing first must purchase a tent, possibly
spend hundreds of dollars more on a
sleeping bag and pad, plus maybe a
backpack. Through the Kelty/GetOut-
fitted program, the rental experience
starts at about $25 per person per
day, or possibly less than a nearby
budget hotel.
“People who want to try camping
but aren’t in the position to make a full
commitment can now try it out,” says
Greene. If they enjoy the experience,
the cost of renting becomes inefficient
after a couple of trips. At that point,
“they are a qualified lead for our retail-
er and e-tailer partners,” he says.
“People will spend money on their
passion, but do they really want that
giant investment before they know it’s
their passion,” he contin-
ues. It’s similar to the
logic BMW is applying
to its DriveNow car
sharing program. Ac-
cording to DriveNow
CEO Richard Stein-
berg, the younger
generation that is
using BMW’s sharing
program is typically
not in the market for a
new premium automo-
bile, so cannibalization
is not a concern.
Of course, for a
sharer to move from
entry-level to active
users, the products
they rent or share
must provide a quality
experience. Quite sim-
ply, a product must be
durable and deliver on
its promise in order to
generate respectable reviews and stand
up to the rigors of shipping and renting.
In fact, it’s possible that concepts such as
quality and reliability become even more
important as purchase drivers within a
sharing environment.
The possibility of an inconsistent
experience, for instance, is the top
concern folks express about the shar-
ing economy, PwC surveys show, and
consumers say they are more likely to
trust a department store brand than a
peer-to-peer fashion site such as Posh-
mark. All of which suggests high value
remains in the quality and consistency
associated with a trusted brand name
or a local specialty shop.
“Durability of hardware matters,”
say PwC analysts, “so too does brand
name, as those looking to rent or buy
used goods will seek the reassurance
that comes with brand recognition and
corresponding caliber of goods.”
Taking it one step further, the
higher price typically associated with
higher quality becomes more afford-
able to a certain group of shoppers, as
Collaborative Economy Innovation Framework
Source: Collaborative Lab
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Outdoor
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