The free-wheeling, debt-inducing “shop til you drop” mentality of consumerism is out. Instead consumers are become more considered in how they spend and consume, “shopping smarter,” and rejecting the idea that they need to amass more things to be happy, according to a fascinating new report commissioned by global ad agency Havas Worldwide, “The New Consumer and the Sharing Economy.”
The report, based on an online survey of 10,574 respondents aged 16 and older, and across 29 markets (including developing and developed economies) is organized into two camps of consumers — “prosumers” and “mainstream” ones. Prosumers are defined as those consumers who are the market’s main influencers and trendsetters. As the report states, “What prosumers are doing today, mainstream consumer are likely to be doing 6-18 months from now.”
What’s interesting about the report is that when it comes to dissatisfaction about the current state of consumption and economic models, mainstream consumers aren’t far behind from prosumers in believing that current economic models aren’t working. What’s more, a healthy majority of mainstream consumers – 69 percent – believe that overconsumption is putting our society and the planet at risk. Not all that far behind prosumers – 77 percent of whom agreed that overconsumption was harming the planet and society.
Of course, it’s not realistic to stop spending altogether. There is consumption and there is overconsumption, and again, both prosumers (88%) and mainstream consumers (76%), are in agreement that “smarter consumption” is the key.
But what does “smarter” mean? It means consuming what people “really need”; recycling and repurposing; producing less waste by living more sustainably; consuming products of better durability and quality; buying products from local producers to benefit own communities; and buying products at lower prices.
These new attitudes all go some way to explaining the rise of the sharing economy. As the report notes, people are drawing a clear line between beneficial and damaging forms of personal and household spending. Consumption must be seen as a tool for progress – either in supporting others in the local community (fuelling local jobs), making use of idle assets either through sharing or rental, and most interestingly, investing in experiences rather than things.
For many brands without experience in the sharing economy, the consumer backlash against the once prevalent spend, spend, spend mentality, might appear to augur tough times ahead for them. But according to the report, brands have a very vital role to play in the new economy.
One of the most crucial things that brands have going for them in the sharing economy is the trust they’ve built up with consumers. That trust is both in the form of expertise they represent, that they are a public company with a reputation to protect, and that there is usually some recourse should something go wrong with a company as opposed to an individual. From that bedrock, the report found that there were further opportunities and new models of business for brands.
So what will brand involvement look like in the sharing economy?
1) Brands Will Serve as Guarantors and Protectors in the Peer-to-Peer Economy: As much as we may want to trust our fellow human, lots of us still would prefer a brand to act as an intermediary, either as guarantors of the items individuals resell (Lenovo, for instance ties its product support to serial numbers, and not just to the person who first purchased it), or as a middleman for facilitating transactions (eBay).
2) Brands Will Help People Consume More Sustainably: Respondents reported they admired brands that were helping them to make more sustainable choices and purchases. Virgin Atlantic, for example, is piloting a program that lets its passengers share rides from the airport.
3) Brands Will Help Create Secondary Markets: In the past, people often through out what they no longer needed, sometimes even when the product was in great condition, simply because they had upgraded. Respondents said they liked the idea of brands helping them to to resell or donate goods that are no longer needed. Some companies are already doing this. Patagonia, for instance, has a partnership with eBay to let customers re-sell their Patagonia goods (covered under their famous warranty). H&M led a very successful recycling drive in which they collected 7.7 million pounds of used clothing globally in 2013. The items were either resold or converted into other products.
4) Brands Will Find Ways to Offer Access, Not Just Ownership: Brands don’t necessarily have to sell goods to earn revenue. Lots of brands are realising that they too can rent out their goods at shorter time spans and still make the business model work for them. For example, BMW’s DriveNow program lets people rent their cars by the minute rather than buy them.
5) Brands Will Build Community and Connections: Brands have often in the past been accused of destroying local communities by their rapacious behaviour. “Big box stores” focused on gutting prices and driving out local small stores is no longer the model that consumers want or appreciate. Instead, they are looking for companies to support communities or build local connections. The UK’s national DIY chain B&Q, for example, has been lauded for its Streetbank.com program that brings local communities together to share tools.
How would you like brands to interact in the new economy?