How small business can benefit from a sharing economy
July 24, 2019
As children, the concept of sharing was a crucial learned aspect of our development. It was a way to make friends, demonstrate kindness towards others, and fuel an understanding of collaboration. In the last 15 years, sharing has evolved from the sandbox and become incorporated into the business model, coined as the sharing economy.
What is the sharing economy?
The sharing economy is defined by United Bank as “a system that enables material goods or services to be shared between private individuals or businesses, either free or for a fee, typically orchestrated through online platforms.”
More and more people are eager to forgo their possessions and the sharing economy helps enable that practice. It embodies convenience, social good, and environmentally friendly practices. For businesses that are able to partake, it also leads to improved brand perception as it promotes sustainability, inclusivity, functionality, and community.
When e-commerce hit the mainstream, it created a paradigm shift in the culture of consumerism. People began choosing access and convenience over ownership. Generally speaking, consumers are finding fewer reasons to buy thanks to opportunities to share.
Ebay, Uber, ZipCar and Airbnb are just a few examples of the sharing economy finding ways to fit the changing needs of consumers. And as more and more Generation Z and Millennials take over the workforce, they continue to incorporate the values of the sharing economy into their business model, enabling businesses to become more economically and environmentally friendly.
Nowadays, you can rent anything from high-end clothing to handbags to fitness equipment thanks to a multitude of new websites that enable consumers to share. Once upon a time libraries strictly implied books, magazines or music. Today, a quick Google search can help you find tool libraries in your area that allow you to rent out tools from kitchen equipment to hammers or saws for quick fixes.
United Bank explained that with the sharing economy, “users have a greater choice of reasonably priced, high-quality products and services which may have been previously out of reach. It also helps people earn money by selling or renting underutilized goods or resources.”
In a study conducted by Statista, it was observed that in 2016, almost 45 million people in the United States were participating in the sharing economy. The study also projected that by 2021 that number would rise to 86.5 million.
The sharing economy shows no signs of slowing down. It has allowed small businesses and consumers to partake in community building . There’s that word again and if you scroll through different sharing-based platforms, the word “community” reappears time and time again. Here are a few examples of sharing-based brands that you can incorporate into your small business.
Incorporating sharing into your small business
Since 2010, WeWork has allowed businesses to rent shared office spaces. This is a great way for small businesses to be able to afford work spaces without requiring they stay under a long rental contract. It also allows multiple businesses to work under the same roof sharing the costs associated with office maintenance.
Thanks to expanded e-commerce, a lot of contemporary small businesses and retailers are also found solely online. With apps like WeWork, these small businesses can utilize office space only when needed.
Think about the art of pop-up shops. In the last few years, pop-up shops have been a great way for malls to fill empty space and allow businesses small storefronts to get their name out. It also brings together a hidden part of the community.
Neighbourhood Goods and Showfields are two examples of this concept in action. It also demonstrates how the retail economy can fit into the sharing one. These are both storefronts (otherwise known as shared showrooms) that act like department stores for online retail shops. Providing a physical presence can help attract customers.
Happy Returns is another example of the benefits ecommerce stores gain from joining in on the sharing economy. If signed up, Happy Returns allows consumers to return any item bought online; they get a full refund and Happy Returns will handle sending the product back to the seller. As Forbes writes, “Allowing retailers to pool services creates a better experience for customers who can take one trip rather than returning items at multiple different storefronts, and it allows companies to reduce costs associated with staffing their own clerks to handle returns.”
In 2015, Forge hit the market. Forge is a website that allows businesses and part-time employees to connect with other businesses in their geographical region and coordinate part-time scheduling. For example, if an employee has part-time hours in one store in a mall, they can connect with Forge to another store in the same mall looking for part-time employees. The app then coordinates with both businesses so that a part-time employee can find full-time work. Forbes put it aptly, “The key for retailers to tap into the power of the shared economy is using tools that allow a community to form in their retail workforce.”
The sharing economy is growing. From cars to tools to books to workers, businesses and consumers are now able to have more while possessing less. It represents a dynamic change in the way society is addressing its wants and needs.
More importantly it is a style that high-end businesses are choosing not to participate in, thus creating a space for small businesses to stand out. Retailers and brands that manage to evolve and adapt will be the ones left standing.