You may not be fully apprised of recent developments in the economy of non-arctic latitudes, but I am writing to let you know that all is not right. As we enter the giving season, I must warn you of a gathering storm that threatens both of our livelihoods: the so-called 'sharing economy'.
You are the original creative marketer. I'm a huge fan of your rigorous brand management. Your jingles are top-notch; infectious. Your product tie-ins and your commitment to marketing to the most impressionable audiences - unrivaled. No one but you could have so effortlessly captured the ever-elusive 1-5 year-old demographic. A coup, really.
So it is with great respect that I approach you, one savvy marketer to another.
The 'sharing economy', also known as the 'collaborative economy', is set to eat into the red-glittered edifice that you have so carefully cultivated for centuries. There's a new generation of consumers who have little interest in purchasing new things during the giving season. Through social media and location-aware apps, they are circumventing the normal methods of laying hands on products. They're not buying them at all. They are sharing them. And while 'sharing' may land one's name on your 'Nice' list, it's anathema to our business as usual.
The Internet has proven an efficient aggregator of supply and demand. From hotel rooms to transportation, idle assets to old commodities, the Internet has birthed a peer-to-peer economy. It has gone the distance toward rendering obsolete what we, as creative marketers, used to help drive: unabashed consumerism. The euphoria of the gift under the tree, if you will.
Today's consumers are A-ok with renting, borrowing, hiring and sharing goods and services. Their comfort with strangers and the Internet have enabled instant access to literally anything in the physical world without actually ever owning it e.g. 'don't buy a new power drill, I have one, rent it from me direct over social media, $5 a day'. So 'tis the season to binge watch all the Home Alone's you don't own on Hulu, create holiday playlists from music you don't own on Spotify, share that angel food cake you 'like' so much on LeftoverSwap and regift those 'awesome' stocking stuffers on Yerdle.
Consider the auto industry, which has taken collaborative consumption to a whole new level. Who needs to buy a car anymore, or have one delivered by sleigh? Uber, a service non-existent five years ago, is now valued at $40 billion. $40 billion, Santa. With a 'B'. That's more than American Airlines.
The travel industry has probably been the most affected by the specter of collaborative consumption. Why stay at a cookie cutter hotel when you can rent direct from a homeowner? You know a bit about crashing into the homes of other people, so you probably won't be surprised to hear that Airbnb has a valuation of $10 billion. According to the Wall Street Journal, Airbnb is already larger than Hyatt Hotels Corp. And Airbnb, quite literally, owns NOTHING. No hotels, no beds, no seasonal X-mas decorations. And it's only getting worse, Santa. A recent study sponsored by Airbnb found that 60 per cent of adults agree that “being able to borrow or rent someone's property or belongings online is a great way to save money”. That'll keep you up on a cold arctic night.
On a smaller scale, many of today's new companies are challenging how consumers behave. Your best and most devoted clients, who used to require things like parking garages and shopping malls, have new options. With RentTheRunway, they can borrow a la mode clothing. With Parkatmyhouse, they can pay to park on someone's driveway or in their garage.
An economy which relies on re-using rather than selling creates big challenges, Santa, and certainly makes big brands feel a tad uneasy. And this trend toward collaborative consumption isn't going anywhere. There are at least 200 companies that are already part of the movement.
So the main line item on my wish list this year, Santa, is that we figure out how to put a kibosh on this whole idea of the 'sharing economy'. I think you must agree by now that it is all quite a risky business. Where will we be without the child's gleeful exclamation that "It's NEW, and it's MINE!"? Who wants to give a child a present that's rented? Surely not you, Santa Claus...
Ly Tran is Director of Digital Strategy and Architecture at Proof Advertising in Austin, Texas