How will the sharing economy affect retailers?
10 years ago, many people thought the rise of the online economy spelt doom for all retailers. While this has happened to an extent in some industries (such as the book retailing industry), many of the traditional retail players are still around and thriving. In many cases, this is because they have embraced the online economy and found a way to merge the best of both worlds.
(See our previous article Blending physical and digital worlds is the key to seamless service.)
Are retailers under threat?
Now, as the sharing or ‘gig’ economy is becoming more and more mainstream, there are fears that retailers might be under threat again, especially those selling high-ticket items like cars and electronic goods. As more people opt to rent or share bigger assets rather than buy them, does this mean that sales will drop?
Not necessarily. It may just mean that the nature of the sales will change. Take cars, for example. Car sharing organisation GoGet owns a large fleet of vehicles that they park in various secure locations for people to hire as needed. GoGet are still required to buy the cars, however the difference is that each vehicle will be fully-utilised by many people instead of being underutilised by only one or two people.
GoGet are not taking many sales from the car companies, they are hiring vehicles to people that were probably not going to buy one for themselves anyway. Even peer-to-peer car lending services like Car Next Door need car owners to start with. If the owner can then hire their car out when they don’t need it, it may help them recoup some of the purchase cost and then provide an extra source of income.
Another way smart retailers are leveraging the benefits of the gig economy is through partnerships or mergers with successful sharing economy businesses. This allows them to offer more convenience and a better overall experience to their customers.
What should retailers consider to expand their business?
As Tony Vu tells us in his Business Insider Australia article How Airtasker grew to 1.7 million users through partnerships with eBay, IKEA, The Good Guys, Australia Post and CommBank, there is huge potential for retail giants to expand their offerings to include home delivery, installation, and assembly services through the use of gig economy workers. The demand for these services has been growing organically anyway. You only have to check the Airtasker site on any given day to see a long list of people needing help with furniture delivery and, more specifically, the assembly of IKEA furniture. It made sense for Airtasker and IKEA to formalise this alliance.
In 2017, IKEA also purchased the giant US/UK gig platform TaskRabbit. In one stroke, they gained access to 60,000+ workers willing to help IKEA’s customers within hours of their purchase. Incidentally, IKEA’s stores along the east coast of Australia also boast GoGet vans on site, ready and waiting for customers to hire to get their new furniture home.
Access over ownership
Mike Rosenbalm, CEO and founder of Spacer, Elke Keely and Noga Edelstein, Co-founders of UrbanYou, and Marty Newkirk, Product Manager at Car Next Door, shared their views on the shared economy industry when they participated in a panel discussion called Access over ownership: UrbanYou, Spacer & Car Next Door as part of Florence Guild’s speaker series, The Antidisciplinary Future’. This series narrative explores how we can look outside traditional disciplines to find better ways to live and work now and in the future.
Between them, these panel members have a wealth of knowledge about how the shared economy is taking shape in Australia, what consumers are looking for, what the industry trends are, and what challenges lie ahead. You can listen to a recording of their discussion by tuning in to episode 16 of the podcast series. You can also keep up to date with conversations with other thought leaders by subscribing to our podcast on iTunes and Stitcher Radio.