Traditional thought had it that it was always better to own something, but that view may be changing as more of us get behind the sharing economy. If this term has you scratching your head, you’re not alone – only about 44 percent of US consumers are aware of this trend. The sharing economy is a huge growing movement, and it’s predicted to get even bigger. It may be time for your company to get on board before you miss the wave!
The sharing economy defined
The recession undoubtedly changed all of us. It made consumers look to the minimalist life and appreciate simplicity a little bit more. People asked: Do we really need all of this stuff? Have we reached the point of having too much? Most importantly, how can we enjoy the lifestyle we love while not owning so much stuff?
Enter the sharing economy. According to the Forbes, the sharing economy is about collaborative consumption in which owners rent out something they are not using, such as a car, house, or bicycle to a stranger using peer-to-peer services. In short, people have access to things they want without having to actually own them. As a result – and perhaps best of all – the sharing economy brings about a sense of sustainability, something that consumers are incredibly thirsty for.
As an example of the sharing economy, Citibank recently established its Citi Bike program in New York City. In an overcrowded metropolis, this service allows people to borrow bikes from one parking station and return them to another station across town. Urban residents bike anywhere they need to go without ever owning a bike. Citibank was thrilled to pair their company with an environmentally friendly transportation model that supported sustainability, not to mention being on the forefront of an emerging trend.
What will the sharing economy mean to small business?
As a small business owner and brand ambassador, does the idea of the sharing economy make you feel a little uneasy – especially if your goal and revenue stream depends on actual purchases? Do you wonder what will happen to your bottom line? A recent PricewaterhouseCoopers (PwC) report assuages this fear by pointing out “a threat to retail can just as easily be flipped into a tremendous opportunity.”
So what’s your tremendous opportunity? Is there a top-line product or service that is too expensive for most of your consumers? Instead of relying on the few sales from your top-tier demographic, can you rent out products on a shareable basis for a reasonable fee? Could the sharing economy be a way to expand your demographic?
In her Entrepreneur article, “The Sharing Economy Is Taking Off: Get On the Rocket or Risk Being Left Behind”, Catherine Clifford highlights the demographics of the sharing economy:
- The sharing economy seems to be attracting two age groups the most: 25-34 year olds and 35 to 44 year olds (each at 24%)
- The sweet spot of household income is $25,000-$49,999 (24%) but then quickly skyrockets into more affluent groups, even attracting 11% of the very lucrative $100,000-$149,999 bracket (it also reaches 16% of the $50,000-$74,999 and $75,000-$99,999 groups respectively).
The sharing economy may be just the push you need to expand your small business in a new way. Since this new kind of economy is all about getting creative, think outside the box when mapping out this new strategy! By doing so, you may be able to tap into this sharing economy in the most lucrative and impactful way.
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