Five predictions for the future of collaborative consumption
Friday, May 27, 2016/
By Logan Merrick
The collaborative economy is reinventing what and how we consume, allowing us to buy, rent, swap, sell, trade and gift in ways not possible before the internet, and on a larger scale than ever.
While traditional markets haven’t been completely displaced (yet), collaborative markets are growing at a rapid rate, and unlocking new ways to empower consumers. Here are five predictions for the future of collaborative consumption, and how it will change the way we live in the coming decade:
1. Sensory technology will skyrocket available real-time data
Above all, the convenience that collaborative consumption provides is dependent on technology. Any technology that enhances trust, communication, flexibility, and reliability between consumers and businesses will strengthen the value of collaborative consumption in our lives.
Sensor-based technology will unlock access to real-time data and offer a new marketplace for businesses to streamline the collaborative consumption experience. GPS, sensors and data, enabled through web-based or cloud-based platforms, will improve the sharing experience. This new wealth of data will fuel connected businesses as companies form partnerships to streamline the collaborative consumption experience. The result will be a layering of services in any given consumer touchpoint.
2. Luxury fashion and home electronics will diversify their business models
Did you know that the average power drill is used for 12 minutes in its lifetime, and costs upwards of $200?
Collaborative consumption can re-animate resources that are idle or under utilised in existing markets. In product-focused industries like electronics and high-end clothing, businesses that want to survive must explore renting services and peer-to-peer second-hand sharing options to accompany their traditional business models.
Some companies are already doing this, most notably in the automotive industry. BMW DriveNow, and Volkswagen Quicar have created their own car-sharing service that let people rent available vehicles online, via mobile apps, or through local dealers. In retail, H&M is rewarding customers with coupons for swapping old clothes, and eBay is offering a redistribution market for its pre-owned clothing.
Businesses that don’t catch onto this trend quickly are not only missing out on opportunities to boost revenue, but will find themselves rapidly fall behind more forward-thinking competitors.
3. Consumers will take control over traditional services
The shift from institutional trust to peer trust will drive collaborative ecosystems. Platforms such as online learning community Skillshare are already creating waves across the education and training services industries by removing the middleman – i.e. the highly expensive and process-driven tertiary institutions.
In the financial services sector, peer-to-peer lending companies such as SocietyOne will direct how the industry evolves. Again, their success will stem from removing the middleman, which in this case is the banks. Peer-to-peer lending allows investors to lend a fraction of a normal loan directly to a borrower without the need for a bank or the complexities of institutionalised banking.
The transparency, accessibility and control these collaborative platforms offer is placing more control in the hands of everyday people all over Australia, reflecting what consumers are asking for.
4. Legislation must catch-up
When the automobile was invented, society required new legislation as road rules originally designed for horses. In the same way, councils and governments must revise regulation to enable collaborative business models without the threat of legal action. The Australian Corporations Act was written in 2001, and the current regulatory system is woefully inadequate and incapable of addressing the collaborative consumption movement.
Ride-sharing companies have faced legal action, with many being fined, sued and threatened. Uber is now finally legal in some Australian states and territories but there’s still a lot of work to be done on safety-based legislation. The role for government is becoming increasingly clear as collaborative businesses gain momentum.
5. Overcoming hyper-consumption in healthcare
The healthcare industry is one of the biggest culprits of underutilising capital. Hospitals currently operate under the hyper-consumption model, paying $300,000 or more for medical devices that are only used for a fraction of their lifetimes. While medicine has come a long way in recent years, the healthcare system has not. Hospitals can improve productivity and the impact of their services by leveraging large- and small-scale – collaborative health initiatives.
Cohealo is the first (and currently only) business that is reducing this waste by introducing a collaborative market to hospitals. In a nutshell, it’s a software platform that tracks utilisation of assets. This means that Hospital A can rent out its expensive MRI machine to Hospital B when it isn’t in active use, providing a win-win for both hospitals. While it hasn’t all been smooth sailing, collaborative consumption is laying the foundations for hospitals to meet the needs of patients in more efficient ways.
The reality is sharing ecosystems are here and demand for services that embrace collaborative consumption will continue to grow. Proactively partnering with, investing in, or creating your own peer-to-peer sharing model will ensure your business isn’t left behind and remains attractive to your target market.