Sharing Economy: Make Disruption Work for Retail
It's all about two "t's". Trust and technology.
The sharing economy, also known as collaborative consumption or peer economy, is changing the way retailers do business. And if retailers haven't introduced new services and products to reflect this new economy, they should at least be rethinking their relevancy.
We know it's already at the top of the list for many suppliers.
Take General Motors for example. Over the past several weeks, the Detroit car behemoth who was bailed out in 2008, now "gets it". Not only have they unveiled a car-sharing program in New York City, but they also know that selling cars is more than just about building transportation. In Shanghai, they've launched their own mobile-app carpool program, effectively making themselves the Uber of a major market in China.
You see, brands are winning the trust of consumers on many new levels and it's being fueled by technology.
2015 research by Vision Critical found that 51% of US internet users polled had participated in a sharing economy service in 2015, up from 39% in 2014. 2016 shows signs for increased participation.
The source of the sharing economy?
It's all about the two "s's". Startups and simplicity.
The pressures facing businesses today to manage ever-increasing costs of goods and services is forcing a movement whereby humans want to go back to the basics. This has had many positive and adverse affects on big companies. For the young and agile looking to grow quickly and drive their own stake into the ground, a surge of innovation is helping them win while others struggle to play catchup.
The sharing economy has mustered up so much momentum in the past 12 months, that consumer perception about real value and how they spend is now irreversible.
The startups that are paving the way in this new economy possess the ability to switch strategies in a matter of hours if something isn’t working. Their success is pressing all the buttons of change that big box retailers have ignored since the Great Recession because they've been trying to fight their way back into the arena of staying profitable. Startups have heightened the awareness for retailers to become more nimble if they want to thrive in a fast-paced marketplace.
Disruption is the new norm.
Home Depot has recently reduced tool rental pricing in order to keep up with the growing effects of a sharing economy. Their destination status for "More Saving. More Doing" has been threatened.
Soon, cloud accounting software will be rolling out for Apple Watch, aiming for it to be the fastest way for consumers to stay on top of their cash flow. This will allow customers to benefit from notifications on transactions and highlight savings. Apps will display updated live bank balances while shopping and provide insight on all personal accounts across multiple banks for the consumer. Just think about how that will change how the shopper shops in brick and mortar!
But don't throw away all your old thinking.
Now that the old model of distribution and shelf-life has been disrupted, what can retailers do to remain relevant and maintain steady revenues?
The grocery industry is ripe for disruption, but so far, it has been somewhat isolated because shoppers routinely recognize that not everything can be purchased online and some channels of distribution are best left untouched. Fresh food for example, is still preferred to be touched and personally inspected before being purchased.
But with the tides of technology moving so quickly, retailers need to find ways to build stronger relationships with their shoppers through digital merchandising and accessible content with personalized advice.
Build trust. Authenticity is key.
Retailers need to come across as genuinely wanting to help consumers, and not with the sole purpose of driving revenue.
Tory Wurmser, author of “The Sharing Economy” says that the most important thing for retailers to do is to continue to streamline their store experiences. Uber is successful because of how seamless they operate. That's exactly what retailers need to strive for by utilizing new technological resources to provide a great experience for customers.
Retailers today, especially grocers, must recognize their true value proposition is the creation of a dotted line between food and nonfood items, and deliver them in a focused and intuitive experience of shopping at the "right time and right place" for the consumer.
“In terms of retail, the new economy is an evolution, not a revolution." Tory Wurmser
To learn more about how retailers can adapt and adopt disruption, view this recent infocast on GMDC Connect: Disruptive Technology @ Retail