The sharing economy rose up on the strong foundation of social media as a way for people to survive the recent recession. It has persisted and grown stronger as job growth continues to stagnate and people enjoy making extra money. The sharing economy also reduces consumption by enabling people to rent instead of owning. This has proven very popular, especially with the Millennial generation, who are known for being less interested in car ownership. How can brands compete?
At Sustainable Brands 2014, the sharing economy was a theme throughout the conference. We heard from many brands about how they’re joining the sharing economy, instead of fighting it. As industry analyst Jeremiah Owyang said in his presentation, “Why sell a car one time when you can rent the same car 1,000 times?” He was talking about BMW’s entry into the sharing economy- they rent cars at their dealerships with Drive Now.
For a luxury brand like BMW, this is like Rent the Runway– people who might not be able to afford a BMW can rent one for the rare occasions they’ll be in a position to impress someone important with their car. Well, in Germany. The only other place the program is available is San Francisco, where the ActiveE is the only model available to rent. In this case, it becomes a way to get more people to try electric cars, which is really the best way to convince people that EV’s can have the range they need.
For many products, leasing makes more sense than selling. Rolls Royce rents some of its jet engines, and does all the maintenance. This way, they know exactly what it’s better extend the life of the product. They could also make more money in the long run, depending on how the lease is priced.
Carpet companies Shaw and Desso also presented, and spoke of how take-back programs are vital to their business. Shaw puts an 800 number on the back of their carpet tiles to make it even easier to return. They trade old carpets with their competitors, as their backing is polyolefin, and someone else’s is PVC. The Nylon 6 they all use is infinitely recyclable, so has no business sitting in landfills. Of course Interface also got some mention over the week, as they are the most well-known for using recycled materials to make carpets, now a common industry practice.
More brands are finding ways to engage in the sharing economy, helping them to compete with “ecopreneurists” renting their own assets. The Havas survey on this was just released, and tells more about the current state of the sharing economy.
Businesses can even share information with their competitors, to help them both excel. The Sustainable Apparel Coalition presented the latest on their Higgs Index, a tool that allows members to see where their competitors, customers, and suppliers stand on various sustainability issues. They can keep this all anonymized the way OKCupid matches people without them having to publicize their answers to very personal questions.
Top & Bottom Image Credit: Susanna Schick / CleanTechnica