Jeremiah Owyang of Crowd Companies, Vision Critical Release New Report Investigating the Opportunities of the Collaborative Economy for Established Companies
Vision Critical’s customer intelligence software uncovers key insight by engaging more than 50K people in North America to uncover the new rules of the collaborative economy
Represented by brands such as Uber and Airbnb, the collaborative economy continues to grow in popularity despite rising negative sentiment toward leading sharing companies
Established companies need to utilize price, brand and convenience to combat, complement and compete with collaborative companies
SAN FRANCISCO & VANCOUVER, British Columbia – Crowd Companies, an innovation council founded by Jeremiah Owyang primarily focusing on the collaborative economy movement, and Vision Critical, the leading customer intelligence platform provider, have once again exclusively partnered to release the 2015 report, “The New Rules of the Collaborative Economy,” which maps the growth of the collaborative economy over the last year and the opportunities the movement offers for established global businesses. A follow up to last year’s ground-breaking report, “Sharing is the New Buying,” this year’s report, based on responses from more than 50,000 people across the U.S. and Canada, illustrates the three levers that established companies can utilize to combat, complement and compete with rising sharing sites: price, brand and convenience. Growing concern around sharing startups’ lack of regulation and aggressive global expansion hasn’t slowed the growth of the collaborative economy, making it imperative for established brands to understand consumer sentiment, learn their preferences and capitalize on these shifts now more than ever. The report estimates that by 2017 eight in 10 Americans will participate in the collaborative economy.
In this year’s report, Jeremiah Owyang and his co-author Alexandra Samuel, a respected technology researcher and strategist, evaluate the strategies that established companies can deploy to take advantage of the collaborative economy, also known as the sharing economy, which is driven by leading startups including Uber, Airbnb and others. The report reveals that more than 110 million North Americans are now part of the collaborative economy and participation grew by 25% in the past year: for every four people who were sharing a year ago, the collaborative economy has attracted one new recruit. For leading brands, this growth presents unrivaled opportunity. Companies must increasingly turn to their customers for valuable insight to make more informed and customer-centric decisions in this rapidly changing time.
Comments on the News
- “A year after our first report, it’s clear that this new form of consumption and exchange is not only here to stay: it’s changing what customers expect from all businesses,” said Jeremiah Owyang, founder of Crowd Companies. “But even as the collaborative economy has taken off, it’s been plagued by recurring criticisms. Some of the top players in the market – brands like Uber and Craigslist, and even peer-based Bitcoin – now face significant negative sentiment. The bigger they get, the more they’re vulnerable to a backlash from consumers who’ve had bad experiences, or observers who worry about the impact on employment, taxes or safety. To that end, with this year’s deep-dive report, we’ve looked at the opportunities the collaborative economy offers to established businesses and how to successfully combat, complement and compete with sharing startups.”
- “The startup companies that belong to the collaborative economy are succeeding because they are deeply engaged with their customer base — and have a meaningful understanding of what their customers want,” said Andrew Reid, founder and president of corporate innovation at Vision Critical. “Vision Critical’s customer base is made up of the global enterprises that are facing competition from the collaborative economy, and we wanted to arm them with fact-based strategies to remain relevant and competitive in a space where understanding your customer is the key to success.”
- “This year we were proud to see our market predictions from 2014 come true,” said Alexandra Samuel, technology researcher and strategist. “Sharing grew from 39 percent to 51 percent across U.S. customers, and we also saw growth in people who’ve skipped directly from non-sharing to sharing; only half of Americans and 40% of Canadians have done no sharing in the past year, down from 60% in the U.S. a year ago. It will be interesting to watch how sharing continues to grow as people are drawn to its broader and more eclectic offers — and to see if the disenchantment we hear about in the media starts to impact adoption.”
Forms of sharing have become well-established
Every single area of the collaborative economy is attracting greater participation, with pre-owned goods, custom products, professional services, online learning, personal services, transportation services, places to stay and crowdfunding each attracting at least 10% of the North American population in the past year.
Participation doubled across transportation services, places to stay, crowdfunding and office space with categories including professional services, loaner products, custom products and personal services growing 60-80%.
Sharing is growing quickly, especially among those who already use emergent sharing services
Last year’s report, “Sharing is the New Buying,” the largest-ever study of collaborative economy participation, established that sharing was growing, mainstream, pragmatic and satisfying to customers.
This year’s report highlights the following three major opportunities for established brands to succeed in the collaborative economy:
Price: Driving Business with Savings
- Financial savings is one of the top drivers of the collaborative economy with 82% of sharing transactions partially motivated by price.
- People default to traditional buying for actions such as staying in a hotel when visiting a new city (77% would stay at a hotel) or buying a wedding gift for a close friend (71% would look for a gift in a local retail store).
- 70% of people in the overall population who initially choose the sharing option would consider buying instead, if the buying option were less expensive. A 25% savings will make the majority of traditional purchasers consider moving their business to the collaborative economy.
- The opportunity for big brands is to use price as a lever to retain or win customers in the collaborative economy by creating peer-to-peer marketplaces, allowing customers to purchase and sell pre-owned goods from established brands, or developing offerings that help people maximize the financial benefits of sharing, such as rental models.
- Established brands are well-positioned to offer greater value to providers in the collaborative economy, of whom barely 60% were “very” or “extremely” happy with their latest transaction. Established brands can thereby attract more providers – and use their brand power to attract more buyers, too.
Brand: Driving Business with Trust
- There’s a close relationship between brand recognition and market dominance. More than 40% of North Americans have heard of big collaborative economy players like eBay, Craigslist, Etsy, Uber and Kickstarter, and many of the top sharing players have positive reputations.
- Yet a quarter of would-be sharers will consider traditional buying if it means doing business with a reputable brand.
- More than a third of traditional buyers will consider home sharing or pre-owned home furnishings if it comes with certification from a reputable brand.
- The role of brand in the collaborative economy presents an opportunity for large brands to take advantage by marketing on trust or partnering with sharing services to leverage their brand.
Convenience: Driving Business with Features and Services
- 78% of sharers indicated that convenience is the most popular reason for using shared services.
- Across all age groups, about a third of would-be buyers are swayed to consider sharing services if they offer conveniences like next-day delivery or a concierge to provide advice.
- Convenience is a factor that established brands can compete on, with value-added services that create efficiencies, on-demand access to products and services, mobile apps, and even the sale of locally-sourced and crafted products.
- Technologies that underpin the collaborative economy decouple convenience from location to an unprecedented degree, yet we found that the desire for local goods was more powerful in driving sharers to buy than in driving buyers to share. As sharing services grow, they will become disassociated with local communities and traditional businesses may be in a better position to provide the convenience of local goods that appeal to community-minded sharers.
The Vision Critical and Crowd Companies report revisited the eleven major categories of sharing explored in the 2014 report, including goods, services, transportation, accommodations and money. New categories in this year’s report are online learning and Bitcoin, given their growth in industry prominence and popularity with customers.
Read more about the growth of the collaborative economy and learn how businesses can learn how to compete, complement, and combat this economic trend by reading the report, “The New Rules of the Collaborative Economy.”
This report is based on two surveys conducted between February 2015 and May 2015 by Vision Critical’s Voice of Market with participants from the U.S. and Canada ages 18 and over. The initial survey of 51,078 respondents provided data on the overall incidence, frequency and nature of participation in the collaborative economy. The questions regarding the collaborative economy were imbedded in a general omnibus survey covering a variety of topics. The topic of the collaborative economy was not mentioned in the invitation to the survey. A follow-up survey of over 2,000 sharers provided deeper insight into the nature of participation in the collaborative economy and in particular, on respondents’ most recent sharing transactions. The data is demographically representative of the adult (18+) populations of the U.S. and Canada. The results were weighted by age, gender, region and education, to be representative of the demographics of each nation. The margin of error—which measures sampling variability—is +/- 0.4% for the sample of 51,078 and +/- 2.2% for the sample of 2,003, 19 times out of 20. For more information on the survey methodology, please contact email@example.com.
About Crowd Companies
Crowd Companies, launched December 2013, is an association which connects big brands to leaders, startups, and communities in the Collaborative Economy. For more information, please visit: http://crowdcompanies.com/