The Sharing Economy Represents Evolution – Not Revolution – For Retailers
The formula: take things that are strenuous and simplify them through technology.
As an industry, retail has been mostly safe from the major disruptions other categories have experienced amid the emergence of the so-called “sharing economy,” but it the impact on how consumers expect to shop is inescapable, a report from eMarketer suggests.
“The Sharing Economy,” authored by Yory Wurmser with contributions from Ricky Costa and Tracy Tang, traces the evolution of the sharing economy and outlines in what ways it will affect the retail world at large.
Author and researcher Rachel Botsman defines the sharing economy as “an economic system based on sharing underused assets or services, for free or for a fee, directly from individuals” though eMarketer uses the term a bit more broadly, omitting the “underused” part. But as eMarketer writes, sharing isn’t new.
What is new is app-based platforms like Uber and Airbnb that facilitate those sharing features among users.
The biggest industries in the sharing economy are no doubt transportation, hotel services, and entertainment.
Only 2 percent of surveyed consumers had conducted a sharing economy transaction in a retail setting while over 50 percent say they have in other settings. So while the sharing economy model may not take the retail world by storm, it will affect what customers come to expect from any transaction they partake in.
“Most of retail, even traditional retailers, are going to have to implement elements of the sharing economy into the way they do business,” Wurmser told GeoMarketing.
The sharing economy took off because it took things that were strenuous or time consuming like hailing a cab or booking a hotel reservation, and made them easier through the use of technology and a more open business model. Wurmser notes that it’s not a coincidence that the industries that have seen the biggest disruption are also some of the most protected, such as the taxi industry.
“Retail is a lot more competitive than those industries and while it has seen some disruptions from things like Amazon, it’s a more nimble industry as a whole and is better able to handle these kinds of changes,” said Wurmser. “Retailers are already using things like user reviews but they’re going to have to evolve even further with those kinds of things. Home Depot is a great example of a company that’s keeping up with the movement by letting customers rent out bigger ticket items like vacuums.”
The most important thing for retailers to do, according to Wurmser, is just continue to streamline the experience. Uber is a success because it’s so simple and easy to use. That’s something retailers should strive for as well, using all available resources like new technology and more robust location data.
Taking a look at the major disruptions of other industries can help retailers better prepare for ones in their own industry, but for now, they’re safe. “In terms of retail, the sharing economy is an evolution, not a revolution,” said Wurmser.