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New Report Maps Size, Scope, Disruptive Potential of Sharing Economy

Image credit: Vision Critical/Crowd Companies

Crowd Companies, a brand council primarily focusing on the collaborative economy movement, and Vision Critical, a consultancy that specializes in helping companies glean pertinent stakeholders insights, have partnered on a new report, Sharing Is the New Buying: How to Win in the Collaborative Economy, which for the first time maps the size and characteristics of the movement.

Based on responses from more than 90,000 Internet users across the US, UK and Canada, the report, released today, concludes that sharing online through sites such as Airbnb, Über and Yerdle is growing, mainstream, pragmatic and satisfying, and as a result, has become a competitive threat to large corporations.

Also known as the sharing economy — the sharing or trading of goods and services between customers, enabled by a new set of websites and applications — is growing rapidly, with an estimated 40 percent of the American adult population taking part. As this new generation of customers continues to grow and challenge established businesses, companies will increasingly need to turn to their customers for valuable insight and collaborate with them to make more informed and customer-centric decisions.

“The collaborative economy is no longer a niche phenomenon, and it’s quickly growing. Some areas will have double-digit growth, like used goods. As a result, this will disrupt traditional retail and other customer-driven organizations,” said Jeremiah Owyang, founder of Crowd Companies. “Through this deep-dive report, we now have a very clear picture of how many people are sharing and who these people are — and they look a lot like the mainstream population. It is time for companies to start planning for a new era in which their customers are also producers and want to do business with brands who get the value of sharing.”

“What’s striking is not just how many people are sharing, but how much the collaborative economy is poised to grow,” said Alexandra Samuel, vice president of social media at Vision Critical. “Not only because sharing is widespread among the younger population, but because a lot of people plan to try new types of sharing in the next 12 months. Word of mouth drives most sharing, and buyers in particular are so happy with their experience of sharing sites, that we are going to see a virtuous circle in which sharing drives recommendations, and recommendations drive more sharing.”


Jeremiah Owyang, keynote speaker at Sustainable Brands 2014 San Diego

The rapid growth and proliferation of sharing sites including Airbnb, Über, Kickstarter, Lyft, Rent the Runway, Lending Club, Citi Bike and LiquidSpace has resulted in increased competition for large, traditional businesses, including hotel chains, cab companies and financial institutions, particularly among 18- to 34-year-olds.

The report not only found that 40 percent of 200 million American adults already participate in the sharing of goods and/or services online but that the intent to share is on the rise: About 50 percent of people have used a sharing site in the past 12 months. Sharing has also proven to be more convenient, cost-effective and higher quality to users — attributes previously associated with established businesses.

The report’s authors looked at five major categories of sharing: goods, services, transportation, space and money. About 15 percent of the US and Canadian adult population, known as “re-sharers,” now only use sharing sites to buy and sell used goods on sites such as eBay and Craigslist. In the UK, this group accounts for 29 percent of the population. Another quarter of the population is “neo-sharers” — those who use sharing services to find vacation homes, locate professional services and borrow money.

Sharers

Click for full infographic.

The report highlights the following four major findings that counter common perceptions of the sharing economy today:

Sharing is growing

  • In every category of sharing except buying and selling pre-owned goods, at least as many people intend to share in the next 12 months as have shared in the past 12 months.
  • Neo-sharing could double in the next year. In all neo-sharing categories, there are roughly equal numbers of recent and prospective users.
  • Buying and selling pre-owned products is a gateway to other forms of used sharing with about 15 percent of non-sharers planning to try a re-sharing site in the next 12 months.

Sharers are mainstream

  • Americans, Canadians and Brits participate in neo-sharing at nearly the same rate, but re-sharing is more widespread in the UK.
  • Women are more likely to participate in re-sharing (55 percent), but both men and women actively share across re-sharing and neo-sharing sites.
  • Neo-sharers are more likely to be between 18 and 34 years old (50 percent) and are somewhat more affluent.

Sharing is pragmatic

  • Sharing is driven by practical considerations like convenience (cited by almost 75 percent of neo-sharers) and price (55 percent of neo-sharers).
  • Product or service quality (cited by nearly 50 percent neo-sharers) and the ability to find something that is not available elsewhere (40 percent of neo-sharers) also come out on top as reasons for sharing.

Sharing is satisfying

  • Over 90 percent of sharers say they would recommend their most recently used sharing service to a friend or colleague.
  • Three in four buyers are very or extremely happy with their experience in using a sharing site.

Jennifer Elks is Managing Editor at Sustainable Brands. She is a writer, editor and foodie who is passionate about improving food systems, closing loops and creating more livable cities. She loves cooking, wine, cooking with wine, correcting spelling errors in… [Read more about Jennifer Elks]