Collaborative Consumption

A number of online ventures are changing the rules of human behavior toward collaborative consumption – a powerful cultural and economic force reinventing what and how we consume. Rachel Botsman believes that we are “wired to share,” which can be clearly seen in the new collaborative systems and the trust behaviors involved in such ventures as Zipcar, GoGet, Swaptree, and others discussed below.

This new sector gaining more prominence is called swap-trading. It uses the Internet to create an infinite marketplace to match person A’s “haves” with person C’s “wants,” hence resolving “the coincidence of wants” problem, as termed by the economists. One of these sites is Swaptree, it lists thousands of items that could be instantly swapped, and prints out a postage label for you. 99% of trades on Swaptree are successful, and the one percent that receive a negative rating do so mostly for minor reasons, such as delayed arrival of an item.

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This form of utilizing technology enables trust between strangers, contributing to the sense of living in a global community. Rachel believes that these “social networks and real-time technologies are taking us back to bartering, trading, swapping, sharing, but they’re being reinvented into dynamic and appealing forms.”

We’re sharing and collaborating at various levels, from eBay “the grandfather” of exchange marketplaces, to car-sharing companies like GoGet, where a monthly fee is paid to rent cars by the hour. It also includes social lending platforms such as Zopa, which take anyone with with funds to lend and match them with a borrower anywhere in the world. Rachel calls this “groundswell collaborative consumption.”

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This creates a movement from being passive consumers to being creators and highly enabled collaborators. By removing the middlemen, the Internet makes it easier to make a living selling peer-to-peer, inspiring each other in the process, as in the example of Etsy an online “unique goods” marketplace.

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Rachel reminds us that “we’re born and bred to share and cooperate,” and this movement is “moving us from a culture of “me” to a culture of “we.” She identifies four key drivers of this change:

  1. A renewed belief in the importance of community and a redefinition of what friend and neighbor means.
  2. A stream of peer-to-peer social networks and real-time technologies changing the way we behave.
  3. Pressing unresolved environmental concerns.
  4. A global recession that has fundamentally shocked consumer behaviors.

“These four drivers are fusing together and creating the big shift away from the 20th century, defined by hyper-consumption, towards the 21st century, defined by collaborative consumption. I generally believe we’re at an inflection point where the sharing behaviors – through sites such as Flickr and Twitter that are becoming second nature online — are being applied to offline areas of our everyday lives. From morning commutes to the way fashion is designed to the way we grow food, we are consuming and collaborating once again.”

Rachel and her co-author Roo Rogers have gathered thousands of examples from around the world of collaborative consumption into a book “What’s Mine Is Yours: The Rise Of Collaborative Consumption.” They found that these examples fall into three clear systems:

  1. Redistribution markets – a used or pre-owned item is moved from where it’s not needed to somewhere, or someone, where it is, something like Swaptree. “They’re increasingly thought of as the fifth ‘R’ – reduce, reuse, recycle, repair and redistribute – because they stretch the life cycle of a product and thereby reduce waste.”
  2. Collaborative lifestyles of sharing resources – funds, skills and time. “In a couple of years “coworking” and “couchsurfing” and “time banks” are going to become a part of everyday vernacular. One example is called Landshare, a scheme in the U.K. that matches someone with some spare space in the back garden, with a would-be grower, and together they grow their own food.”
  3. Product-service systems – where you pay for the benefit of the product and what it does for you, without needing to own the product outright, especially applicable for things with high-idling capacity like baby goods, fashions or power drills, which are used by most owners around 12-13 minutes in a lifetime. “So you can rent the drill, or rent out your own drill to others.”

“These three systems are coming together, allowing people to share resources without sacrificing their lifestyles, or their cherished personal freedoms.”

Rachel cites as an example a study that Zipcar conducted in 2009, “it took 250 participants from across 13 cities, self-confessed car addicts and car-sharing rookies, and got them to surrender their keys for a month. Instead, these people had to walk, bike, take the train, or other forms of public transport. They could only use their Zipcar membership when absolutely necessary. The results of this challenge after just one month was staggering. It’s amazing that 413 lbs were lost just from the extra exercise. 100 out of the 250 participants did not want their keys back, the car addicts had lost their urge to own.”

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These systems require a degree of trust, of which the cornerstone is reputation. Going forward our “reputation capital” will determine our access to collaborative consumption, becoming a “new social currency” that could become as powerful as our credit rating.

These changes can help transition to a more sustainable system that also serves our intrinsic needs for community and individual identity. “A seismic shift from individual getting and spending towards a rediscovery of collective good,” says Rachel. “I’m on a mission to make sharing cool. Because I really believe it can disrupt outdated modes of business, help us leapfrog over wasteful forms of hyper-consumption and teach us when enough really is enough.”

To learn more about this movement you can visit collborativeconsumption.com and see Rachel’s inspirational talk at this TED Conference:

 

 

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