Years ago, while planning a vacation, I used a message board to find someone to rent their home to me at my destination. At the time, this was very new to me and I was one of only a handful of consumers taking advantage of technology to do this. While it was a bit clunky at the time, I liked the options it provided and the ability to work directly with homeowners. Little did I know that I was an early participant in a trend that is now fundamentally changing how consumers access goods and services.
Today, I regularly use several online marketplaces and smartphone apps to plan holidays, which allow me to explore information, read reviews and connect directly with others who offer affordable options for my destination. As it turns out, my approach of “access” versus “ownership” makes me part of “the sharing economy,” a trend poised to significantly disrupt how we do business in Atlanta and worldwide.
If you’ve ever made a reservation at a private residence, hailed a cab from your smartphone or listened to someone else’s playlist on a music streaming service, you, too, are engaging in the sharing economy. And while sharing is nothing new, technology advances are bringing it into the mainstream and even making it profitable for visionary entrepreneurs.
In critical Atlanta industries like hospitality and retail, new sharing platforms for travel, dining and ancillary services offer consumers greater flexibility and choice. A “new retail” has also emerged from the environment of sharing, borrowing and renting, offering customers better pricing, more convenient access and choices. For example, consumers have the option to purchase “pre-owned” clothing, toys or even sporting goods directly from another individual through online marketplaces or peer-to-peer networks.
According to new research published by PwC, consumers are hungry for a sharing-based economy, which values borrowing, renting or exchanging skills for access or money. In fact, “The Sharing Economy,” which surveyed 1,000 consumers, found that 57 percent of American adults agree “access is the new ownership” and four in five consumers see real advantages to renting versus owning. The three “C’s” of sharing — cost, community and convenience – are ultimately what’s driving this shift. And as you might expect, it is the youngest millennials leading the way.
Those familiar with the sharing economy perceived a number of benefits:
- 86 percent agreed it made life more affordable.
- 83 percent agreed it made life more convenient and efficient.
- 63 percent agreed it's more fun than engaging with traditional companies.
While customization, convenience and more competitive pricing are draws, creating trust with consumers is critical. Our report showed 69 percent of respondents needed a recommendation from someone they trust before they trusted a sharing economy company. Other critical success factors include safety, privacy and quality control. Seventy-six percent of those familiar with the sharing economy also believe it’s better for the environment.
The sharing economy may prove challenging for established business in Atlanta and beyond. It will also provide these same companies with tremendous opportunities to add value and engage consumers in new and exciting ways. If the sharing economy has proven anything, it’s that business models cannot be taken for granted in a highly connected, fast-changing world. Today’s disruptors can easily be disrupted tomorrow.
With its growing base of millennials, Atlanta is particularly well-situated to be a leader in adopting the sharing mindset in the months and years to come. And given Atlanta’s core assets around technology, mobility and our growing base of millennials, we have the opportunity to become a global leader in the development of this movement, providing Atlanta yet another avenue for economic growth and innovation.
Reggie Walker is the managing partner of PwC's Atlanta office.
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