Brands look for greater ownership stake in sharing economy
Brand leaders are increasingly looking to turn the growing trend for collaborative consumption into a business proposition by forming strategic alliances with smaller, start-ups.
According to social innovator Rachel Botsman, who is a leading expert in this field, big brands are realising that they have a powerful role to play in scaling up sharing economy models that are starting to accelerate across the world.
She said that forward-thinking businesses were starting to rethink supply and demand channels for their particular sectors, not just to create greater efficiencies but to tap into changing patterns of consumer behaviour.
Botsman highlighted the potential lucrative gains that could be made by tapping into the "idling capacity" of assets, for instance, office or transport space which isn't being fully utilised.
"80% of all car rides in the US are single occupancy rides, therefore the system runs at 20% efficiency," she explained. "The average utilisation of a commercial office is 35% ... there is a massive amount of value and liquidity locked up in that under-utilised space."
She said that as mobile technologies increasingly converged with social locations, it offered a platform to unlock this idling capacity on a huge scale.
By way of example, she pointed to global hotel chain Marriott which was now offering workspace on demand through its conference room capacity. Marriott has formed a partnership with the LiquidSpace app, which allows users to instantly find meeting rooms while on the move using location data.
"This is a really smart partnership, not just because it is creating new forms of revenue for Marriott, but it's starting to redefine what the brand stands for," Botsman said.
"Marriott is no longer just a place to stay, it becomes a place to meet people, to work - it brings other customers through their doors."
This type of brand extension and reinvention is maturing fastest in the automotive sector, Botsman noted, where many cars sit idle for 23 hours a day.
"The car industries are saying in the next few years our business may not be in selling cars, it may be in personal mobility ... look at BMW's DriveNow initiative where you can rent cars by the minute," she said.
Much of this appears to be driven by the younger generation, reliant on the convenience and immediacy that smartphones can offer to their lifestyles.
"Research in Germany found that 75% of 18 to 24 year olds would rather live without their car than their smartphone - we have a whole generation growing up where this concept of access over ownership makes complete sense," Botsman said.
"The exciting thing is that the big brands are asking how they can get involved - they see it as a massive engine for innovation," she added.
Research carried out earlier this year estimated that the sharing economy was now worth £330bn globally and £22.4bn in the UK.
Rachel Botsman was speaking at the Circular Economy 100 annual summit, hosted by the Ellen MacArthur Foundation.