What is the Sharing Economy and How Can Your Business Benefit?

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Technology has helped to grow the sharing economy exponentiallyOne of the many changes and innovations that technology has helped unleash is “sharing,” as in bikes, cars, apartments and just about anything else you can think of. Is this a trend that you can leverage? And even if you can’t, are there impacts and implications for your business?

Fast Company’s Co. Exist gazed into its crystal ball to look at the future of the sharing economy. Actually, it says, sharing isn’t new: We’ve always looked for ways to increase our access to goods and services. Think library, laundromat, video rental stores—all forms of “sharing.”

But what’s infused new twists and energy into sharing is technology. It not only connects individuals in peer-to-peer transactions but also helps mitigate risks. Two examples: Airbnb and TaskRabbit. Technology also provides access. With Getaround, for example, people can share/rent cars from others, regardless of location.

But, experts say the biggest change might be in an “own less, use more” mindset that’s gaining widespread traction across the globe. Proponents point to a number of benefits of sharing, including less harm to the environment, support of local businesses and empowerment of individuals.

So, where’s it all going? The sky’s the limit, this article says, as more products are designed to interface with the internet and each other, and as individuals consume more selectively, consciously and locally. There’s plenty of opportunity for new businesses to form around these behaviors.

But not everyone sees a sharing economy as purely a good thing, writes contributor Matthew Boesler on businessinsider.com. In fact, he says, market strategists at ConvergEx Group warn that the rise of the renting and sharing economy could have catastrophic ripple effects. Renting and sharing, they say, is driven not only by economic necessity but because it’s now trendy, for everything from houses to cars to expensive clothing and jewelry.

How big is the “fledgling” renting/economy sharing? Projections are that it is generating $3.5 billion in 2013 and is expected to reach $110 billion over the next few years! It appears that the recession, stagnating wages and technology all converged at just the right time.

But the ConvergEx strategists say this is all worrisome and that the impact could be far-reaching, affecting everything from home sales and home values to auto and retail sales, and even overhauling entire production, sales and employment structures. But just as concerning, they say, is how this all affects our psyches, which were already primed by the recession. Without necessarily realizing it, are we constantly in a mode of imagining and preparing for worst-case scenarios (and consequently, not wanting to make big purchases or investments)?

But if it’s here to stay—and all signs are that it is—are there ways for businesses to embrace the sharing economy? Small business and entrepreneurship expert Kelly Spors offers some tips at Small Business Trends:

    • Understand the “less-is-more” mentality and opportunity.
      The core segments tend to be younger, but the mindset is spreading across demographic groups.

 

    • Determine if you can offer something sharable.
      Remember it’s not just about “stuff.” It’s also about sharing ideas and skills.

 

    • Keep an open mind.
      Stay on top of emerging trends, from the perspective of both a business owner and a consumer. Regardless of how your business fits in, you need to understand the phenomenon.



Technology company Vision Critical founder and entrepreneur.com contributor Andrew Reid writes about ways your business can get in on the sharing economy. Some insights to help get you started:

    • Start thinking like a company-as-a-service.
      It’s about long-term relationships, as more businesses take renting, subscribing and gifting to the next level.

 

    • Connect people to people so that they can buy and sell from each other.
      Do Craigslist, eBay and Airbnb ring any bells? These are just three models for the future…

 

    • Let consumers create something on a branded platform.
      It’s about community, engaging, tapping into the crowd to improve your business functions and products. Encourage customer input and feedback on everything about your business! Remember: Consumers are in control; companies aren’t.



Admittedly, sharing won’t come easily or naturally to all businesses. But keeping an open mind and understanding the trend is the first step!
Image courtesy of Nutdanai Apikhomboonwaroot / FreeDigitalPhotos.net

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