What’s better: buy new and spend more or pay less for used goods? Historically, consumers have opted for new items that come with the assurance of quality from recognized vendors, but as noted by Forbes, the rise of social media and Big Data has created a new economic paradigm: The Sharing Economy. Now, requests for goods and services can be instantly shared and acknowledged, changing the underlying dynamics of buying and selling. The result? Companies are left out in the cold. So how can they participate in this new economy and share the wealth?
What’s Mine is Yours
According to a recent post from Forrester analyst Dan Bieler, some companies are embracing this change instead of fighting it. Take the example of German secondhand goods reseller reBuy.de. Here’s how it works: reBuy.de offers previously used goods at far less than the price of new retail items, along with a quality guarantee. Customers are able to search a whole marketplace of goods for exactly what they’re looking for, pay less than they would for a brand new item, and feel good about themselves for reducing consumer waste.
It’s the same reason that the used mobile device market is gaining traction; buyers are more knowledgeable about the impact of discarded phones on the environment and aren’t keen on paying premium prices for “new” models every time they are released (like every year). Online stores that offer big selections, expedited shipping, and quality control are quickly becoming the go-to options.
But what does all this mean for companies looking to break into the sharing market? Bieler argues there are several factors to consider—for instance, the use of social media reviews or reputations as currency. Companies must develop channels for consumers to easily review products and share their experiences. Analytics also plays a key role in the sharing space—for one, as the backbone for automated processes that serve up targeted content to buyers and fine-tune marketing efforts. Secondly, analytics serve as the cornerstone of market evaluation. With the sharing market just taking hold in traditional retail channels, companies are still grappling with a variety of decisions, such as what are the ideal price points, how to effectively convey quality assurances, and how to determine if items are the ideal fit for purchase-based sharing or are better as giveaways to drive brand reputation and adoption.
In effect, companies must leverage a combination of quantitative and qualitative measurements to determine the sharing market breakpoints: where is this space profitable, and where is it better to pull up stakes and move on? Sharing is the new retail market; analytics tools can help lay the groundwork for new pricing and inventory, among other things.