Paper Topic - Collaborative Consumption

For my paper topic, I will write about the rise of collaborative consumption. Collaborative consumption is a new trend in which people are sharing, renting, and trading their real and personal property.  The driving logic behind collaborative consumption is that it is expensive and wasteful to buy things that we are not using constantly.  A bicycle sitting idle in a garage provides no value to anyone.  As a result, at a local level communities have developed different sharing or renting services.  However, collaborative consumption is not just an underground movement catering to the granola set.  It is becoming a sizeable market in itself as for-profit companies join the fold.   Businesses such as AirBnB (home rentals), Car2Go (car sharing service) are making profits based on aggregating consumer demand for shared/rental services and charging a transaction or usage fee. I am particularly interested in topic because I am co-founding a mobile peer-to-peer company.  Our company is called reQwip and it is a mobile marketplace for people to buy, sell, rent and donate used sporting goods.  The rental portion of our company is a form of collaborative consumption.

Collaborative consumption has the potential to disrupt existing business models and change how people purchase goods.  Knowing that I can easily rent or share a lawnmower with my neighbor will change my purchase behaviors.  I am very interested to learn the psychology behind why people are willing or not willing to rent or share things with strangers. From a customer insights perspective, there are a number of experiments I can conduct to understand what are the underlying factors that influence a person’s decision to engage in collaborative consumption.  One potential exercise would be to do an in home visit and ask someone for each of their durable goods would they be willing to rent or loan it.   This exercise might reveal in some cases that people have sentimental and psychological attachments to certain seemingly commodity goods.  Or for some people, they might be willing to lend or rent very personal goods.

For my research, I will start by reading the book “What’s MineIs Yours: The Rise of Collaborative Consumption” by Botsman and Rogers.   This book released in 2010 profiles three different models of collaborative consumption.  The first model is called Product Service Systems, and is compromised of individuals that use a sharing service (such as Zipcar) for a product instead of owning that product.   The second model is Communal Economies such as Etsy in which individuals not corporations are creating products to sell to each other.  The third model is Redistribution Markets in which people engage in bartering (eBay) or swap trading  (Zwaggle) in order to reuse or resell used items. 

Additionally, I will look for market research reports that quantify the financial impact of collaborative consumption.  I will also look for studies that have researched the rationale and psychology behind selling, renting, and swapping existing gear. 

Gaining Insights from Social Media

For our Nordstrom project, we created the persona of Cindy Mai, a 31 year old, Chinese-American management consultant living in Chicago.   As a marketer, there are a number of insights that I could get from Cindy’s social media usage.  The first thing that would be important to know is which social media channels does Cindy currently utilize and what is her engagement level based on Groundswell’s Engagement Pyramid.  For instance, is Cindy simply a member of different social sites (Watching), does she share information on Facebook/Twitter (Sharing), respond to other people’s blogs/social posts (Commenting), does she write her own blog (Producing), or does Cindy actually edit and compile content (Curating)?   By observing Cindy’s online persona, I could learn a lot. 

For instance, if I was interesting in understanding her travel habits, I could look to see if she has posted any public YouTube videos and what content did those videos contain?  If she posted photos of her trip to the Bahamas, this may indicate that she is into travelling and would be receptive to messaging around luggage and travel accessories.  Provided that I had access I could see her the location of geo-tagged tweets, foursquare check-ins, and Facebook places. 

By looking at what pictures she has uploaded to flickr or instagr.am, I could determine what sort of images move her.  For instance when she takes pictures of buildings are these pictures of historic or modern buildings, this might tell be whether she has a more classic or more modern sense of style.

I could look at the sentiment of her facebook posts or tweets to determine Cindy’s overall personality.  For instance is the tone of posts playful or sarcastic, optimistic or cynical, praising or complaining?  In Clifford Nass, “The ManWho Lied to His Laptop”, he notes that in order to relate to people it is important to match their emotional valence.  For instance, if Cindy has naturally a bit of a negative persona, Nordstrom may seem irritating and cloying if they message her with overly positive messaging.  Messaging that is more neutral in tone may be more appropriate for her.

            Another way to gauge Cindy’s engagement would be to use 3^rd party software such as Klout or Infochimps to look at Cindy’s relative level of engagement across different platforms such as Facebook or Twitter.  Another site, FlipTop allows brands to search for social information based on users emails.  This would easily allow Nordstrom to track what channels Cindy is using to communicate.

However, another way to gauge Cindy’s engagement and potentially increase her engagement is to allow her to link different social media accounts to her online Nordstrom profile.  For instance, Cindy could link a Facebook and Pinterest account.  Nordstrom could track how often Cindy “likes” or “pins” a certain item.  This information could allow them to tailor Cindy’s experience to create a custom experience based on her preferences.  FB and Pinterest are great at tracking her online persona, but another way to engage Cindy is through Foursquare.  I got my haircut at Birds Barbershop yesterday and they offered $2 off for showing that I had checked into their shop.  Nordstrom could use similar tactics to encourage Cindy to show that she is at Nordstrom.  By incentivizing Cindy to check-in to Nordstrom, Nordstrom benefits in that her location is broadcasted to her other foursquare friends.  This increases Nordstrom’s brand salience.  In the ideal case, Cindy’s friend Lisa might ask her what she is buying and Cindy’s response might inspire Lisa to visit Nordstrom soon.

One caveat about gaining social insights about one’s brand’s customers is that it should be transparent to the customers when you are using their data and your brand should provide opportunities for users to opt out of sharing their information.  Otherwise, it verges on stalking.  When brands over step their bounds, it tends to cause backlash.  For instance, the mobile app, Path recently was found to have been uploading user’s iPhone contacts to their server without their knowledge and this caused a large amount of backslash online.  Nordstrom must be careful to balance its desire to engage Cindy and learn about her without appearing to be invasive or creepy.

Persona

Name: Ruth

Age: 86

Relationship: Grandmother

Location: Cleveland

Think and Feel

Ruth cares the most about her family’s wellbeing.  She wants both her children and grandchildren to be healthy and happy.  She wishes that they have good careers and always good luck.

Ruth is widowed and still thinks of her late husband Sam a lot.  She reminders when they were poor and when they got a little money.  She thinks about when they took dancing lessons (cha-cha) and had to give a performance.  Ruth was nervous but Sam took the lead and made sure they did well.

Her biggest worries are about health of her children and grandchildren.  Her biggest aspirations are that her family stays healthy.   She feels hopeful when her grandchildren call and when she prays.

See

Ruth does not drive so she spends a lot of time in her apartment.  Her apartment is filled with pictures of her family.  She also likes to collect china and figurines.  Her home is usually very neat with the exception of a stack of bills on the kitchen counter.  She likes to watch Turner Movie Classics.  Ruth likes watching the afternoon and evening news (“Anderson Cooper”).  She really likes the View because they always try to solve a problem.  They talk freely.  She finds it freethinking and likes hearing opinions.  She does not like violent or disturbing programs like police procedurals.   She frequently manages to break her remote and has to call her grandson to fix it.  She has almost a savant like ability to mess up technology.  One time she managed to reprogram her TV to Spanish (she doesn’t speak Spanish)

Ruth considers her closest friends to be her two daughters, cousin Sadie (both Sadie and Ruth were only children), and her sister in law.  She says her friends that are not family –are sick or dying off.

Ruth tends to leave the house to either go out to eat, shop, and watch movies. She does not have a particular brand preference.   She likes to buy clothes from Nordstrom.  She thinks that the help is very kind (“sweet as apple pie”).   She likes looking at shoes particularly heels (even though she wears an ankle brace).  Ruth goes to the Dior makeup counter to get her makeup.  She really enjoys going to their restaurant (“wonderful restaurant”).   She does not like to buy clothes at Target (“that red circle place”).  She does not really like the environment.

Say and Do

Ruth likes going out in public.  She has been buying fedoras and she says that she does not want to brag but she gets lots of compliments from men and women on her appearance.  She says it makes her feel young.

Ruth likes to wear black pants and a lacy top.  When she wants a more casual look, she will wear long cotton shirts with a vest.  She likes long earrings that “look hot”.  Her favorite purse is a black leather purse with different colored flowers that her daughters brought back from Italy.

Ruth likes to talk to strangers.  She tries to get people to laugh or smile.  She thinks that makes people feel better.  She says that when you laugh your heart feels overwhelmed.

Hear

Ruth tends to hear a lot about politics and the presidential election right now from her friends.  She says they also talk a lot about their various ailments.  She does not like to talk about her illnesses.  She does listen to health news specifically about Parkinson’s disease because her late husband Sam had Parkinson’s disease.

She finds that the lady in charge of activities, Lisa, in her apartment is influential.  Lisa helps residents that no longer drive find drivers.  Lisa encourages Ruth to take part in activities.  Ruth likes to go to birthday parties, book reviews (she often does not read the book), and other activities.

Pain

Ruth’s biggest fear is not being able to be alive to see her grandchildren walk down the aisle.  Ruth gets frustrated with her daughters.  She says that they watch her every move and tell her what not to do.  Then she admits that her biggest obstacle is walking and staying alert.  She concedes that her daughters might have some justification for their watchfulness.

Gain

Ruth’s primary goal is to stay healthy and to not fall again.  She walks with a walker now.  She wants to be around to help her children with love, money, or advice (“even though they don’t listen”).  

Ruth does not measure success in terms of making the most amount of money.  She thinks that if people are happy to go to work or volunteer then they are successful.