The sharing economy is changing the way businesses interact with their consumer base. It is forcing companies in all industries to rethink their business model, lest they get left behind by market disruptors that have found a way to tap into the potential of this new phenomenon. But what exactly is the sharing economy and how does it tie into digital disruption?
What is the sharing economy?
The sharing economy is a relatively recent phenomenon brought about by the maturing of digital solutions into a stable, flexible, agile, open source and affordable toolkit.
At its core, the sharing economy is defined as a model where consumers engage in peer-to-peer exchanging of products and services. As a consumer, you are no longer limited by the restrictions that come with having to choose from a finite pool of service providers or product manufacturers. If an individual offers a product or a service you are interested in, you can purchase it directly from them.
Learn how companies like Airbnb have disrupted their industries in our free case study and strategy guide
The sharing economy and businesses
It is important for your company to embrace this reality of peer-to-peer business. If the service or product you provide is available in a way that may bypass you, you need to take proactive measures to ensure you are the one accommodating the transaction. By adopting shared economy principles as a part of your business identity, and doing it before your competition, it becomes associated with your brand, giving you a unique access to that part of the market.
Advantages of the sharing economy
The beauty of embracing the potential of the sharing economy is that your own investment in R&D, marketing innovation or IT requirements will likely be relatively small. A lot of what you need is already in place.
- The product or service is provided for by the consumer base.
- Digital communication channels exist.
- Your consumers are educated in using peer-to-peer platforms.
- By just offering the platform, not the actual product or service, you are ensured of an agile and constantly evolving business model.
All you need to do is adopt the right tools and make it part of your business model. In doing so, you are not endangering your existing business, but are adding unique value to it.
Embracing the sharing economy can help your company become a disruptor. The pool of consumers who have something to sell or buy will gladly use you as a platform if the solution you offer makes it easy for them to remain in control of their activity, generate revenue and build a positive reputation. When done right, it becomes a self-governing entity of sorts, albeit one that’s linked to your brand.
Examples of digital disruption through the sharing economy
What do brands like Airbnb, Uber, Netflix, Spotify and Tinder have in common? They disrupted their market by tapping into what was available from a consumer point of view and offered a platform through which these consumers could interact with each other’s value propositions for gain.
Uber doesn’t own cars and Airbnb doesn’t own hotel rooms. They are merely a point of sale, a digital market of sorts, for users to interact with each other and with products that interest them without having to do the heavy lifting themselves. Through these disrupters, consumers get an at-a-glance view of what product is available for them, where they can purchase it and what other consumers thought of it.
External influences can either pose a threat or an opportunity to your business. The rise of the sharing economy is one example that has enabled companies such as Airbnb to disrupt their market. To learn more about how your business can spot and seize opportunities like this, download our free strategy guide.