The sharing economy is nothing new, however. After all, libraries, car hire and fashion rental services have been around for a long time. But the technical possibilities are new. The highly reliable 5G mobile communications standard will soon allow even larger quantities of data to be transmitted in even less time. The Internet of Things is networking physical and virtual objects, while data science and artificial intelligence are enabling the development of personalized offerings using smart data networks. As a result, it has never been easier for providers and consumers to come together in a fast, intuitive and secure way. And the range of sharable goods and services is steadily growing: from cars, bicycles, living space and clothing, to tools and machines as well as plants.
Sharing is the basis of new business segments
In my view, this brings huge opportunities for companies. This is also confirmed by figures from Forbes business magazine: while the sharing economy only amounted to 15 billion US dollars in 2014, it is expected to rise to 335 billion US dollars in 2025. In China, the pioneer of sharing, the sharing economy could already account for 10% of gross domestic product next year. Since young people in particular have taken to sharing and often no longer use conventional means of purchasing or booking, I believe the sharing economy will establish itself for the long term and sustainably alter our economic system. Consequently, every company – regardless of sector – should consider whether its products and services can be shared as part of new business models. A striking picture can be seen with automobile manufacturers BMW and Daimler, who have created a car-sharing platform in addition to their auto sales. The consumer goods and retail company Tchibo lends out baby and children’s clothing; furniture giant Ikea is testing furniture rentals in Switzerland. There is virtually no limit to how a company’s products can be shared.
The right processes are key
But a good idea alone is not enough. It’s also important to align the entire processes within a company to the new possibilities of the sharing economy. An example: many sharing goods and services are offered on platforms and used before a payment is made. It’s therefore essential to precisely identify users and assess the risks of bad debt losses. These points need to take place reliably, quickly and without any effort on the part of users, since convenience is a top priority for consumers. An interruption in the customer journey promptly leads to an abandoned purchase process. The same is also true for processing payments; these always need to include the latest methods to increase the conversion rate. Providers should also think about subscription models. They allow for planable income streams for companies and are convenient for consumers. Dunning and debt collection also need to be adjusted to the latest developments. Today 20% of all payments are late; the use of modern communication media, individual contact with consumers and the integration of various payment options secure a swift payment of outstanding receivables in these cases, while also improving customer retention. For companies, these are vital factors that ensure their novel sharing services not only enjoy the appeal of consumers, but also lead to a positive impact on business success. Considering the rapid pace of development, one thing is clear: those companies that don’t keep their eyes on the trends of tomorrow and the latest technical possibilities, and which don’t consistently optimize their offers, will quickly be left behind. This should give companies enough motivation to keep abreast of the times.