Collaboration and Culture

 

June 23, 2016

From AirBnB to Uber, the world of peer-to-peer and sharing economies are bursting at the seams. But what does the mean for traditional retailers?

Miriam is a 35-year old educational consultant in Boston who spends 12 hours each weekend as an UberX driver, typically earning somewhere in the vicinity of $150 for her efforts. Hardly enough to pay the bills, but as she explains, “It’s not even about the supplemental income at this point. It’s more about a lifestyle that’s based on community.”

It’s been estimated that the collaborative (or peer to peer) economy carries a collective value in excess of $26 billion annually. That’s a conservative estimate that grows stronger with each day. The benefits are numerous: it removes the barriers between provider and customers, supports a sense of independent business carrying little of the risk, fosters inclusiveness and frequently is a much cheaper and personable approach to products and services. But does it mean the end of the traditional retailer?

Models and Distinction

The honest answer is, obviously, no. Despite the upsurge and buzz surrounding share-based industries, it remains still a relatively small but fervently revered to market favored chiefly by one of the most influential purchasing demographics—the coveted millennial. There will always be a need for a more traditional model of operation, despite the sense of trust fostered by the collaborative economy. Both will co-exist and co-exist quite peacefully alongside one another despite the growing popularity of collaborative industries. Old habits die hard, and the novelty and potential risk of paying a fraction of the cost of a hotel room to stay in the guest room of an absolute stranger will likely always prove too daunting for a large percentage of the population. What it does mean, however, is that marketers will need to reevaluate their very way of thinking. Perhaps they already have. After all, who needs Chrissy Teigen when a virtually unknown Floridian can generate over 1.1 billion lifetime views on YouTube?

Brand Ambassadors and the Rise of the Next-Door Neighbor

In 2010, after a successful five year stint of sharing make-up advice on her personal blog and YouTube site (itself, a certain reflection of the emerging ethos behind peer-to-peer economies,) Lancome named millennial sensation Michelle Phan as their official spokesperson on the strength of her video views alone. Phan, who has no professional modeling background, proved her affability and enthusiasm for cosmetics extended quite naturally into the realm of professional endorsement, and proved her own entrepreneurial skills in 2014 when she partnered with L’oreal to produce her own line of make-up. Phan was the new face of brand ambassador; organic, everyday, down-to-earth and relatable to by millions of millennials.

But the judgements of millennials can be just as discerning as they are enthusiastic and tech-savvy. Almost immediately, cries of “sell-out” and “traitor” emerged online. Blogs were established that questioned her integrity and independence, seemingly reveling in promoting each rumor, well-founded or not, that denigrated her character; a circumstance not helped by a 2014 copyright infringement lawsuit from a record label citing her unapproved usage of their roster on her video uploads.

 

 

The Future?

If traditional business models hope to compete with collaborative efforts, they would do well to take heed of the attitude favored by proponents of the latter, which largely view marketing attempts and demographic adherence with cynicism and mistrust. They need to develop outreach and customer service methods which are both interactive and personalized to ensure that their customer base views them as equals and not just another faceless corporate drone. They need to embrace the diversity and community-based spirit of sharing economies, and not simply view their clientele in terms of profit margins and loss. In short, they need to learn how to become human once again.

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