Marketing and the sharing economy: get smart before someone else does.

ChooseLife

(An edited version of this post first appeared on Campaign Asia)

Here’s a revealing exercise that we never do: the next time we go home, let’s take out pen and paper and start making an inventory of everything we own. How much of it do we use? How much do we need? How much do we want?

This is not a clichéd hunt for the pair of trousers we haven’t worn for the past 7 years, or for the picture frame that we never even unpacked. It’s something more fundamental than that.

Dating back to when our personal understanding of the world was formed, we either had something, or we didn’t.

Of course there were services that we had access to and never really owned, such as public transport, schools and streets, but they were exceptions of such a large scale that we instinctively felt they belonged to a different category. When it came to goods we consumed, we either owned them and used them, or didn’t own them and didn’t use them, apart from occasionally borrowing them from a friend.

As a staple of my formative years goes, that’s how we ended up owning “a fucking big television, cars, fixed interest mortgage repayments, leisurewear and matching luggage, DIY and wondering who the fuck you are on a Sunday morning”.

Some of it makes perfect sense, but do we really need to own a drill that we use once every two years, and generally with embarrassing results? How about a lawnmower?

It’s not like we thought it was a good idea at the time:

we knew it wasn’t, but it was the only one we had.

The emergence of the sharing economy over the past decade was built on the hypothesis that the ownership model was not the commercial equivalent of the end of history, but rather an incidental situation dictated as much by the alternative opportunities that we were missing than by the wealth we had acquired: the advent of a networking technology and culture is providing the platform to test this hypothesis and investigate what goods we’re willing to part from, and what instead we will still like to call our own.

While this process is still in its infancy, as changes in human behaviour are much slower than the marketing news cycle, we can already identify some driving forces.

It’s natural to desire

Croesus and Solon — 1624; Gerard van Honthorst; Kunsthalle Museum — Hamburg

 

Let’s start by dispelling a common myth: the literature blaming advertising for making us “buy things we don’t need with money we don’t have to impress people we don’t like” is as large as it is superficial.

The truth is that, despite what we may think of ourselves, advertising is not that all-powerful, and it was never about “inventing desire” as it was about inventing responses to desires people already had. The fundamental human motivations are always the same, and they’re not going to go away: the network economy offers the opportunity to design new solutions to fulfil old desires. A service like “Bag, Borrow or Steal”, for instance, still gives you access to high-end designer handbags that make you stand out, but letting you borrow them on a monthly basis instead of buying them.

Of course, there’s a reason why we could have done this 10 years ago, but we’re only talking about it now.

Events change minds

Economist

Environmentally-conscious activists spent the best part of the last decade trying to persuade everyone who’d bother to listen that we should buy less, eat less, consume less: they failed.

Then the financial crisis hit, and the middle- and lower-class in the West found itself forced to downgrade and downscale. When that happened, our brains played a trick on us:

Behavior often shapes attitude more than the other way around, so finding ourselves unable to own more due to financial circumstances made us post-rationalize it into a better option in the first place.

This accelerated our critical view on consumerism, to the point that now, according to “The New Consumer and the Sharing Economy”, a global survey by advertising agency Havas Worldwide, 46% of people in 29 countries ranging from Argentina to Vietnam prefer to “share things rather than own them” and 56% resell or donate old goods rather than throwing them away.

While we’ve been forced into this disposition by events beyond our control, it’s entirely possible that it will leave roots deep in our minds, and we won’t necessarily revert to the same old habits even once we have the means to do so.

After all, just like the financial crisis gave millions of people the motivation to experiment with a new behaviour, that same new behaviour is in turn giving thousands of marketers the right motivation to experiment with new go-to-market strategies.

Flightcar.com gives you free airport parking by letting you rent your car while you’re away.

IKEA ran a two-week promotion turning its Facebok page into a digital flea market where people could buy and sell used furniture.

UK’s DIY leader B&Q created “Streetclubs”, a service that helps neighbours come together and share tools and other household items.

While these three examples are all enabled by digital technology, it took a double shift in mindset to make them happen: without a crisis that generated talk of a “new normal”, ideas like these might still sit on the fringe of what’s acceptable by mainstream consumers; and in turn, a decrease in traditional spending paired with an openness towards new models gave the most innovative marketers a licence to pursue innovation more radically than they would allow themselves to when the economy was growing.

If anything, what’s holding back more of such experiments on a larger scale is a conservative corporate culture that is fixated on selling the same products rather than fulfilling the same needs, and that underestimates how radically different alternatives can reshape whole industries and leave consumers better off in the process.

A call for “smarter marketing”

This is our brain when we hear the word “New”

This is why the popular call for “smarter consumption” is somewhat misplaced. Consumers respond to the environment they’re provided with, and while they now have a greater power to affect it than ever before, it’s at the same time irresponsible and dangerous for marketers to wash their hands of the problem.

As we said, people’s desires don’t change, and if we don’t find new ways to fulfil them, they’ll stick with the old ones. In particular, as we humans constantly long for all things “new,” fans of sustainability should not delude themselves into thinking that consumers can be convinced to keep what they have until it breaks.

They don’t replace the old with the new because we manipulate them into doing it against their instinct; they do it because it makes them feel good.

We should find ways to generate that same feeling without turning Earth into a waste bin, or we’ll be responsible for it because this is our job, not theirs.

Nobody needs a new tablet every three months, so how do we make old tablets feel new? How do we make a new use of tablets without making new tablets?

And since nobody needs 100 different tablet models, how do we produce just enough to keep people happy and the market innovative, and make a better use of the time and resources we liberate?

These are marketing questions for marketing professionals, and eventually someone will answer them: that’s why “smarter marketing” is not just a moral call, it’s a competitive requirement.

While hotel groups were busy building more hotels because that’s the business they saw themselves in, Air BnB created millions of accommodations without laying a single brick.

H&M increased their inventory without a stitch being sewed by collecting 7.7 million pounds of used clothes to be resold or converted into other products.

The Walgreen drugstore chain partnered with Taskrabbit, an online small jobs marketplace, to deliver over-the-counter cold and flu medicines to customers unable to make it to the store, effectively growing an ubiquitous sales force without hiring a single new employee.

Zopa, the UK’s leading peer-to-peer lending service, has issued loans in the amount of 500 million pounds without branches or upfront capital.

These examples are not about the clichéd “doing more with less”,

they’re really about “doing better”.

An old marketing quote states that “people don’t buy quarter-inch drills, they buy quarter-inch holes”. There are now more potential alternatives to drills than ever, and people don’t even need to buy them. So what’s the smarter way of giving them that hole?

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