How marketers must adapt to the collaborative economy
For the better part of the past year, Altimeter Group analyst Jeremiah Owyang has been trumpeting what he calls the collaborative economy. Loosely defined, it’s all about people getting what they need and want from each other without buying. Think Uber, BlackJet, Rent the Runway, Airbnb, LendingClub, etc.
I reached out to Jeremiah to ask him what this shift means for brands and how they need to rethink their marketing efforts to mirror the changes brought about by the oncoming collaborative economy.
Marketers, aside from, say, rental car companies, have always been all about getting people to lay down cash in exchange for goods or services. Though renting isn’t altogether new, we asked Owyang how marketers need to shift their approach to better connect with those who have opted into the collaborative economy.
Jeremiah says people’s mindsets are changing and, because of that, marketers need to change their mindsets as well. “Since people seek access over ownership, business models must change,” he said. “For example, companies must now offer rental of their products and services rather than selling them for consumption. This means products must be durable as they will be used by many hands. They must be able to be shared among folks. Companies may need to offer their own marketplaces. For example, Patagonia offers Common Threads, Toms Shoes offers a Marketplace and GM partnered with RelayRides to encourage a marketplace of peer to peer car sharing.”
Taking note of the collaborative economy means more people sharing fewer goods or service. I asked Owyang if that means brands will have to cut back on production or alter the way they market.
“It means they must build longer lasting products that can pass through many hands,” he said. “It also means they can build new business and marketing models like rental agreements, verification of used goods, and upgrade and repair models. Sophisticated models like Peugeot’s Mu mobility club mean access to cars, trucks, scooters, and busses. Imagine if Samsung offered a club and all the newest equipment were sent to you like a lease.”
In essence, brand marketing might move closer to models used by cable companies, Netflix or Amazon Prime, all of which promote the benefits of continuously offered services (rental, if you will) for a monthly fee. On the SaaS side, we’ve previously considered the pros and cons of the software subscription model. The collaborative economy would push it further, with companies pitching their services and benefits the way MCI did back in the day with its Family and Friends telephone service.
Owyang envisions the maker movement – crowd-funded, people-powered entities – becoming more agile than big brands at bringing products to market. How can brands react to this shift?
“This is an opportunity to watch crowd funding activity and analyze it for market trends and demands. This is also a partnership opportunity as big brands can help small makers get supply chain scale,” said Owyang. “For example, GE partners with Quirky, a community of makers. Nordstrom and West Elm now resell Etsy at their stores. Lincoln Motors partners with CustomMade to build matching jewelry for high end cars.”
The collaborative movement very well may motivate brands to, in essence, lend their names to makers. “Our vision is that big companies partner with the crowd,” Owyang told me. “Expect franchise models to emerge for the crowd. I’ve predicted that we will see a hotel certify Airbnb homes this year for brand extension. Imagine a W-certified loft in the meatpacking district in NY.”
The collaborative economy will require many brands to collaborate with multiple makers, much like the Nordstrom, West Elm and Etsy deal. And agencies will have to become adept at collaborating effectively with multiple entities, clients or not. Not only that, but agencies will have to collaborate with other agencies working for other brands involved in the partnership. Something’s going to have to tie all that collaboration together, right?