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How to adapt to the sharing economy

GeoMarketing's Lauryn Chamberlain tells SmartBrief about the changes afoot in retail thanks to the on-demand, or sharing, economy.

6 min read

Digital Technology



The rise of companies like Uber and Airbnb doesn’t have to spell disaster for traditional brick-and-mortar stores. In many ways, the technology underlying the sharing, or on-demand, economy, can help retailers innovate and be more relevant to consumers in today’s digital world. How? Associate Editor Lauryn Chamberlain has written a report that outlines five key factors for brick-and-mortar business to consider. She tells SmartBrief how brick-and-mortar stores can adapt and even benefit from on-demand apps.

Lauryn Chamberlain

While the sharing economy has disrupted business as usual for brick-and-mortar stores, you have found that this does not have to be the case. What are some examples of business models that allow stores to take advantage of the sharing economy?
As I discuss in the piece, business models that are flexible to include on-demand partnerships and integrations are the future. Some examples of this include Frye’s partnership with Via — Via ride app users could travel for free to the Frye store and then receive a discount when they made a purchase — or even hotels integrating a “call Uber” button into their app.

Over 90 percent of purchases are still made in physical places, but brick-and-mortar businesses need to provide a seamless experience from the moment a consumer starts searching for a store location all the way through to the purchase moment. They also need to deliver increased personalization and faster delivery or faster service. Embracing the sharing economy is one way to do this.

We’ve already seen ridesharing disrupt the taxi industry, Airbnb reshape hospitality and new food delivery services emerge. What industries are next in terms of disruption by the sharing economy, i.e. who should be preparing for oncoming change?
It’s impossible to predict the order in which the sharing economy will disrupt industries; the only certainty is that it will. But in my opinion, a big shift on the horizon will be in travel: While airlines, for example, do offer loyalty programs and a variety of opportunities to pay for upgrades, this is a major industry that doesn’t offer a truly personalized experience, and it often leaves travelers feeling as if they have little to no control over their experience — something consumers are less apt to stand for now than they were even two years ago.

How will this change manifest? I would imagine in several ways. First, I think we’ll see a proliferation of apps that let customers bid for flight upgrades outside of the airline, or to exchange selected seats and amenities directly with each other — We’re already seeing the beginning of this. Secondly, I wouldn’t be surprised to see the prices of on-demand private flights and jet-sharing decrease as adoption continues to pick up. Now, this isn’t necessarily going to be an option for the average traveler, but we’re already seeing companies like JetSmarter allow customers to book seats on shared jets on-demand, and for considerably less money than chartering. As adoption and inventory increase, I’d expect prices to drop further, and I could envision a time soon when wealthy travelers or business travelers would be far more likely to book a seat on a shared jet on-demand rather than put up with airport security, increasingly long boarding processes, and sub-par in-flight amenities. This could really put the pressure on commercial airlines.

I’m sure we’ll see other disruptions in how people travel that I haven’t imagined yet. 

Are there core advantages that brick-and-mortar stores have over sharing economy startups that could put the stores at an advantage? For example, do consumers prefer an in-store experience that might put traditional retailers at an advantage against online startups?
Brick-and-mortar businesses certainly have advantages over online startups in some respects. It’s exactly why we’ve seen so many online “etailers”  — Warby Parker for example — expanding to open physical stores. Customers still do like to see and try on certain items before making a purchase, and there are fun in-store events featuring music, entertainment, or designer meet-and-greets that simply can’t happen online. That’s why I think the future of retail is tied up with on-demand partnerships; using physical stores as a showroom or “warehouse” is still smart business, but the immediate delivery that online customers expect needs to be possible. Whether this means offering same-day delivery in-house through a native app or partnering with the likes of a Postmates, I think “traditional” retailers will have to explore these avenues.

What traditional companies are leading the way in integrating with the on-demand economy? How can others learn from them?
There are several higher-end labels that I think are experimenting with these type of partnerships in the right way. I mentioned Frye, and Zac Posen actually made its handbags a part of a Postmates Fashion Week promotion that benefitted both Postmates by boosting orders and the label by introducing its products to a new audience and turning attention to its New York Fashion Week show.

But as far as companies who have gone beyond the early stages of testing, I would say that there are lessons to be learned from the likes of Target and Kohl’s. Over the past several years, Target has revitalized its omnichannel marketing strategy in a variety of ways. In-house, it has embraced buy online, pick up in-store programs, which cater to shoppers who prize the flexibility to buy and receive products however they want. Target has also done some cutting-edge testing with its smart home open house, and it partnered with Instacart for grocery delivery as well. These are the kind of initiatives brands need to be embracing — even if it requires scaling back the physical footprint, investing in making existing flagships technologically current, and then spending more on partnerships and research.

How will shifts in technology reshape the sharing economy field? Is there a chance the disruptors will face disruption, and how can businesses make sure they are prepared for whatever is next?
People’s desires for experiences that cater to them personally and to be able to live their lives more easily through technology won’t change. That said, there’s certainly the possibility for disruption in terms of how.

Alternatively, could “traditional” businesses take control of this economy back? For example, Ford did launch a pilot car-sharing program with Getaround in the US. The goal is reportedly to make it easier for owners to loan out their Ford vehicles to approved renters. Because Ford is a massive company that, in this case, owns the production, sells the cars, and is empowering on-demand vehicle sharing, might it take some control of that industry back? It’s certainly possible that other companies in other verticals could initiate similar programs in a way that might disrupt the space as we currently know it. 

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