In today’s ever-growing competitive market, there is no doubt that technology has become the main driving force for innovation. Whether it is a single click on the Web or a gentle tap on our smartphones, we continue to move forward into the future. Despite global warming and the upcoming wars that our friends are lamenting about on Facebook, the future is not as bleak as we think.
The digital age heralds a swarm of new players whose game rely on mutual benefits and shared collaborations. They establish a new business model which have changed the way we trade. Today’s hottest brands, AirBnB and Uber to name a few, allow a peer-based movement and let people get exactly what they need from each other while still generating revenue. Paradoxically, these companies claim none to the resources that they have. How does that work? Thanks to social media and the availability of data about people and their behaviour, physical assets can now be consumed as services, an oxymoron indeed!
From creating a peer-to-peer lending market place like Prosper to delivering prepared food to your doorstep like Munchery, everyone has now equal opportunity to capitalise their businesses despite having little or no resources at all. Their strategy is simple: they utilise the internet to analyse new demands and trends while using mobile technology to trade with their customers efficiently. This approach has reduced transaction costs, making sharing assets cheaper and easier than ever before. The Economist estimates that the so-called sharing economy is worth $26 billion.
E-commerce websites and mobile phone Apps have transformed regular consumers into “collaborative consumers.” Website such as Kickstarter has enabled entrepreneurs to bring their creative projects to life while letting netizens to finance them independently. Some projects, such as the “Coolest Cooler,” get heavily funded that it even reached $13 millions. What’s fascinating is that Kickstarter spends zero money to any of these projects at all. Another example is Turo, an App that matches up owners and renters. GPS shows people the nearest rentable car and social networks provide a way to check up on others while establishing trust. Even big players in the industry see these newcomers with open hands or rather as new “business partners.” BMW for example collaborated with Uber to promote its latest model, the 2016 7 Series, by offering free ride to Uber customers in New York, Los Angeles, and Chicago.
As a result, this contradictory approach has revolutionised how we access goods and services.
The key market forces behind this movement are …
Societal Drives. Desire to connect and sustainable mindset.
Economic Drivers. Financial Climate and untapped idle resources.
Technology Enablers. Mobile technologies and social networks.
Millennials contribute to the rapid increase for revenue in this start-up scene. Reports from Econsultancy based on their survey in December 2014 and January 2015 show that digital marketing reach an all-time high. Hence it validates the fact that consumers no longer look to just one brand on their customer journey. They interact with brands across various channels until they find exactly what they want. This rise is largely indebted by the rise of millennials purchasing power over the past decades. An infographic by Goldman Sachs highlights millennials’ desire for access instead of ownership, giving ways for a new set of services that provide access to products without the burdens of ownership. Forbes has also summarised why this new generation matters …
1. They aren’t influenced at all by advertising.
Only 1% of millennials surveyed said that a compelling advertisement would make them trust a brand more.
2. They review blogs before making a purchase.
33% of millennials rely mostly on blogs before they make a purchase, compared to fewer than 3% for TV news, magazines and books.
3. They value authenticity as more important than content.
43% of millennials rank authenticity over content when consuming news.