The sharing economy – aka peer-to-peer or collaborative consumption – has changed the way consumers purchase goods and services. Instead of buying from traditional institutions or businesses, consumers are buying what they want or need from other individuals: from bike rentals to ride sharing to running errands.
It’s a concept that’s mutually-beneficial: the buyer gets a good, service or experience they want, often at a lower cost, and the seller benefits by selling or renting something he/she isn’t using or doesn’t need at the time, typically using a third-party platform (website, app) to connect, coordinate and transact.
And given its rapid, widespread adoption, it’s a category of rewards content that should be on loyalty managers’ radar.
Why consumers want to share
In a word: experience. Largely driven by Millennials, consumers favor the sharing economy because it provides them with the specific experience they’re looking for. They have options and flexibility to find exactly what they’re looking for, typically at a lower cost of entry.
Consider Airbnb. Consumers have endless options for lodging when booking a stay through Airbnb, and with the recent launch of the Experiences section of their app, the mobile tech company is expanding its ability to deliver on exactly the kind of “experience” their customer is looking for. Through this new tool, not only can a user book a villa in Tuscany, but now they can also sign up for activities like hunting for truffles during their stay.
By the numbers
- 2 billion: The total number of rides Uber users have taken.
- 3 million: The number of listings on Airbnb worldwide.
- $30 billion: The estimated valuation of Airbnb in 2016.
- $335 billion: The potential revenue opportunity generated by key sharing economy sectors by 2025.
These numbers grow each year, proving that the sharing economy is massive. It’s not a fad, and it’s not going away any time soon.
Focus on the experience
Airbnb boasts that it “connects people to unique travel experiences,” and has more than 60 million guests. Brands involved in the sharing economy are winning because they provide the experience consumers want. There’s been a major shift among today’s consumers from conspicuous consumption to experience consumption, according to a recent PwC study. So much so, that they’re re-thinking the value of ownership versus access and experience. In fact, among US adults familiar with the sharing economy, 57 percent agree “access is the new ownership.”
Taking a cue from the successes of brands like Airbnb and Uber, loyalty managers should focus on the customer experience. Don’t be afraid to make changes to your content mix. Think first about what your customers want and use that to guide the goods and services you provide to garner loyalty.
Like the sharing economy, your organization’s relationship with customers should be mutually-beneficial. Build a rewards portfolio that reflects customers’ preferences, which will ultimately translate into trust in your organization.