The Gen Z is pushing the world into a “Collaborative economy” which will completely change how we live and work. The collaborative economy is a system that activates the untapped value of all of assets through collaborative models and marketplaces that enable greater access. It’s an emerging trend, especially in the transportation and hospitality sector, with companies like Uber and Airbnb becoming popular, but it’s moving beyond that space. I believe this started way back when services like Netflix came and we suddenly stopped buying entertainment altogether. Stronger customer expectations, forged in the age of Twitter, Facebook and Uber, have changed the game beyond all recognition. Accustomed to fast, digitized services, consumers today demand 24/7 support and expect their voices to be heard. To them, “usage” of a convenient, reliable, customer-focused service is more important than “ownership” of a product.
Why is this happening? The following 3 trends must be understood to explain this phenomenon.
1) The rise of Gen Z and their fear of commitment
Being born in an uncertain world the Gen Z wants choices at ever turn and do not want to be tied down. Why bother owning a car when you can use an app to get a ride wherever you want to go? A debt-free mindset and pro pay-as-you-go models augment this culture even more. While digital immigrants like me like the security of a house and car the Gen Z loves the flexibility and ample choices they have at their disposal these days. As a resulAs explained in a rt, companies must make customer-centricity their new mantra. Understanding the customers’ needs completely transforms the way they design and deliver services.The smart companies are the ones that are out there talking to their customers, seeking feedback and delivering 24/7 support. The new generation of customers, operating in a world of social media and social networking, “are not merely a ‘consumer’ of services; they are an active voice in shaping at every step in the value chain.”
2) Technology and the Internet of Things
Secondly, technology continues to change the world around us, bringing with it opportunities as well as challenges. A few decades ago, it was the birth of the internet and the smart phone. Today, it’s the arrival of billions of sophisticated sensors embedded in products known as the Internet of Things (IoT). Network technologies create the efficiency and trust to unlock the wealth of these assets and share them in ways never possible before. The result is a return to old market behaviours – swapping, trading, bartering, renting and sharing, with the “village square” now wired into the global marketplace. Many models in the collaborative economy are peer-to-peer, matching needs and wants directly. This is a remarkable new stage in industrial development. IOT will enable service providers to monitor a product in real-time, enabling them to optimize equipment for their customers, lower usage costs and fix problems before they occur.
3) Sustainability and Green Economy
The third trend relates to Corporate Social Responsibility. Consumers expect businesses to have a higher purpose than profits alone, and they are especially concerned about the environment. This generation is supportive of the goals of the circular economy, which call for a major shift from the linear “take, make and waste” model to one where goods are designed to be taken back and recycled, refurbished or reused. By selling the ‘use’ of an asset rather than the asset itself, manufacturers will remain responsible for the product and want to ensure that it does not wind up in a landfill following its first life cycle.
As more and more companies embrace the potential of IoT, customer-centricity and circular thinking, I am hopeful that we will see the rise of a new era of sustainable economic growth around us. In this new world, manufacturers in order to survive have now to provide services rather than products, a concept referred to as “servitization”. They can no longer compete on price alone and must find ways to provide added value for their customers.