COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Collaborative Consumption: Collective economic models

February 2011

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Collaborative Consumption is a socio-economic movement that continues to transform the way we consume, value and interact with brands.

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Drivers

-  Fallout from Global Recession: Price sensitive and super-informed consumers -  Rising Cost of Living : Rising food and energy prices -  Social Networking: Desire to be connected -  Us Vs. Them Consumers set the agenda -  Shift in the balance of power from organisations to people -  Lifestyle Downsizing Burden of ownership -  Growing Belief That Less is More: Dematerialized living -  Desire for Sustainability: Frustration with waste

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Drivers

The rise of Collaborative Consumption reflects the current and ongoing influence of the previous Counsel Future Signs.

Power of Many - 2006 Less is More - 2007 Barter Society - 2008 The New Restraint - 2009

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

The Emergence of New Models for Consumption

PEOPLE ARE MOVING AWAY FROM THE OLD TOP-HEAVY, CENTRALIZED, AND CONTROLLED FORMS OF CONSUMERISM TOWARDS SHARING, AGGREGATION, OPENNESS, AND COOPERATION.

[1]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Changing Perceptions and Associations

“I started to notice instead of friends bragging about their new Prius, they boasted how they had given up their cars altogether by becoming “Zipsters” (members of the car-sharing service Zipcar).” [2]

– Rachel Botsman, Co-author of ‘What's Mine Is Yours’.

URBANITES ARE REALISING THAT CAR OWNERSHIP IS EXPENSIVE AND WASTEFUL, AND NOW HAS A NEGATIVE ASSOCIATION AMONGST THEIR PEERS.

SHARED OR PARTIAL OWNERSHIP OF CARS IS SEEN AS ENVIRONMENTALLY SENSITIVE AND A COMMON SENSE APPROACH.

THIS SHIFT IS SIGNIFICANT: NO LONGER IS RENTING OR HIRING PRODUCTS ASSOCIATED WITH LIMITED FINANCIAL CAPABILITY, BUT AS BEING SMART AND EFFICIENT.

[3] [4]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Understanding the Psychology of Social Shopping

RECENT BEHAVIOURAL ECONOMICS RESEARCH CHALLENGES MANY TRADITIONALLY HELD VIEWS.

THERE IS A GREATER ACKNOWLEDGEMENT OF THE NON-RATIONAL MOTIVATIONS OF SHOPPERS.

THERE IS A GROWING ACCEPTANCE OF THE IMPORTANCE OF THE SOCIAL ASPECT OF CONSUMPTION. SHOPPING IS NOT JUST ABOUT CONSUMING BUT ALSO ABOUT PERSONAL IDENTITY AND MANAGING OUR PUBLIC IMAGE.

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Rethinking Consumption & Ownership

BRANDS WILL NEED TO RETHINK THE WAY THEY MARKET AND SELL PRODUCTS AS MORE PEOPLE ACCEPT THAT CONSUMPTION AND OWNERSHIP WILL LIKELY MEAN DIFFERENT THINGS IN THE FUTURE.

THE COMMON THREAD OF MANY OF THE NEW SHARED OWNERSHIP SCHEMES IS THAT ‘ACCESS TRUMPS OWNERSHIP’.

THE GROWING IMPORTANCE OF THE ONLINE WORLD, VIRTUAL LIVES AND POSSESSIONS (CLOUD LIFESTYLES) AND THE IMPLICATIONS FOR HOW WE CONSUME WILL BE FAR REACHING.

WITH THE GROWTH OF ALTERNATIVE PURCHASE AND OWNERSHIP COMES THE INEVITABLE QUESTION – ‘WHY DO WE NEED TO BUY SOMETHING OUTRIGHT AT ALL?’.

PEOPLE ARE GROWING IMPATIENT WITH “IDLE CAPACITY” (IE, WASTE).

“Sharing is clean, crisp, urbane, postmodern.” [5] - Mark Levine, Writer for New York Times.

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Implications

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Transforming Revenue Models

WHAT IS ASTONISHING IS HOW QUICKLY THE INFLUENCE OF THIS SHIFT IS BEING FELT ACROSS DIFFERENT CATEGORIES. WITHIN THE AUTO INDUSTRY – COLLABORATIVE CONSUMPTIONS IS OFFERING A NEW BUSINESS MODEL – IN TUNE WITH THE MINDSET OF THE POST RECESSION, ECO-CONSCIOUS URBAN CONSUMER.

“Frost & Sullivan, a market-research firm, estimates that by 2016 the (car sharing) market will be worth $6 billion a year.” [6]

- Print Edition, The Economist.

[8]

[7]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Big Ticket Purchases

WITH THE AUTO INDUSTRY ALREADY EMBRACING COLLABORATIVE CONSUMPTION, WILL BIG HOME APPLIANCES AND REAL ESTATE BE NEXT TO ADOPT THE CONCEPT OF SHARED OR PART OWNERSHIP?

“Think about it, you buy everything else at 10-30% off - clothes, electronics, travel, etc. Why not real estate? Sure real estate is a more complex purchase, but conceptually. Why not?.” [9]

- The Fourth Row

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Social Buying

AS GROUPS ARE FORMED TO MAKE DISCOUNTED PURCHASES, RETAILERS NEED TO ENSURE THEY ARE BOTH RECEPTIVE TO AND CAPITALISE ON THIS NEW SHOPPING APPROACH.

FACEBOOK’S ‘BUY WITH FRIENDS’ FEATURE – ALLOWING USERS TO ‘UNLOCK’ A DEAL AND THEN SHARE THAT SAME DEAL OR DISCOUNT WITH FRIENDS IS ALREADY GAINING TRACTION.

ALTHOUGH ‘BUY WITH FRIENDS’ IS CURRENTLY RESTRICTED TO VIRTUAL GOODS, THIS FEATURE IS SOON TO BE EXPANDED TO INCLUDE PHYSICAL GOODS AND CHARITABLE DONATIONS.

[10]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Group Buying

OPPORTUNITIES FOR GROUP BUYING CONTINUE TO EXPAND AND EVOLVE INTO MORE CATEGORIES.

ONLINE GROUP PAYMENT PLATFORM - WEPAY IS A PAYMENT SYSTEM THAT ENABLES GROUPS OF USERS TO SET UP SHARED FINANCIAL ACCOUNTS WITH VARYING LEVELS OF ACCESS, GIVING THEM A WAY TO MANAGE GROUP PAYMENTS AND FINANCES. EBAY GROUPGIFTS (ENCOURAGING COLLABORATION) ALLOWS CUSTOMERS TO SHARE EXPENSES ON A GIFT (FROM EBAY) A REFLECTION OF CONSUMERS’ CHANGING BEHAVIORS.

ENCOURAGE PEOPLE TO INTERACT WITH YOUR BRAND, THROUGH THE OFFER OF GROUP DISCOUNTS.

[11] [12] [13]

[14]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

‘Doing Good’ Through Collective Buying

CERTAIN INDUSTRIES ARE LEADING THE WAY, PARTICULARLY THOSE RECEIVING GOVERNMENT SUBSIDIES, SUCH AS HOME SOLAR ENERGY.

COLLECTIVELY BUYING SOLAR POWER – SAN FRANCISCO-BASED COMPANY, 1BOG, OFFERS A SERVICE THROUGH WHICH COMMUNITIES CAN POOL THEIR COLLECTIVE BUYING POWER TO PURCHASE SOLAR ENERGY POWER STORAGE, EQUIPMENT THAT IS TOO EXPENSIVE TO PURCHASE ALONE.

EXPECT TO SEE MORE GOVERNMENT COMMUNITY PARTNERSHIPS PARTICULARLY FOR SOCIAL AND ENVIRONMENTAL SERVICES AND PRODUCTS.

[15]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

New Collaborative Business Models

MORE EVIDENCE THAT COLLABORATIVE FORMS OF CONSUMPTION REPRESENT AN ENGAGING MODEL FOR COMMUNITIES.

THE PEOPLE’S SUPERMARKET IS A CO-OP BASED MODEL FOR EFFICIENT AND LOCAL FOOD RETAIL. OWNED AND MANAGED BY ITS MEMBERS. THE PEOPLE’S SUPERMARKET REQUIRES MEMBERS TO WORK IN THE STORE IN RETURN FOR CREDITS.

EXPECT TO SEE MORE BUSINESSES OPERATING AS CO-OPERATIVES WITH PROFIT SHARING.

[16] [17]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

Utilising Idle Space/ Capacity

THE NOTION OF REUSING INDIVIDUALS ‘IDLE’ OR UNUSED SPACE OR ENERGY CAPACITY IS ALREADY THE BASIS FOR MANY NEW ONLINE START-UPS.

FROM RENTING OUT YOUR SPARE ROOM TO YOUR CAR OR POSSESSIONS.

THESE SCHEMES HAVE THE ADDED INCENTIVES OF ENABLING YOU TO MEET NEW PEOPLE AND GENERATE NEW INCOME.

[21]

[22]

[23]

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

1. Collaborative Consumption, www.collaborativeconsumption.com

2. www.swiss-miss.com/2010/09/guest-post-by-rachel-botsman.html

3. ZipCar, www.treehugger.com/files/2010/10/nyc-launches-hybrid-zipcar-program-city-eployees.php

4. The Peoples Supermarket, www.thepeoplessupermarket.org

5. www.nytimes.com/2009/03/08/magazine/08Zipcar-t.html

6. www.economist.com/node/16945232

7. BMW Car Sharing, www.psfk.com/2011/01/car-sharing-programs-initiated-by-mercedes-and-bmw.html

8. Peugeot - MU, www.mu.peugeot.co.uk/

9. The Fourth Row, www.antworks.co.uk/4throw/concept.htm

10. Living Social, US, www.livingsocial.com/about

11. WePay, www.wepay.com/

12. Ebay Group Gifts, eBay Inc. www.groupgifts.ebay.com

13. Buy With Me, www.buywithme.com/chicago/deals/3621-southport-blooms

14. Funshare, Hong Kong, www.funshare.com/tc/todaysdeal/hongkong

15. 1BOG, www.1bog.org/

16. The Peoples Supermarket, www.flickr.com/photos/mermaid99/5213863807/in/pool-1457147@N23

17. The Peoples Supermarket, www.flickr.com/photos/mermaid99/4687678718/in/pool-1457147@N23

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

18. ThisNext, www.thisnext.com/

19. ViewPoints, www.viewpoints.com

20. Milo, www.milo.com

21. Crash Padder, www.crashpadder.com

22. Whip Car, www.whipcar.com

23. HomeAway, www.homeaway.com

COLLABORATIVE CONSUMPTION FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS

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