Collaborative consumption is not about not consuming; it’s about consuming differently. It’s about better models of consumption that challenge relationships with “things.”
Collaborative consumption disrupts traditional businesses models. Companies can engage and reap business benefits, such as increased customer loyalty and improved employment engagement, by incorporating collaborative aspects into their retail design.
As the shared economy grows, companies that make products at lower cost but with lower quality will lose customers.
“We’re not talking about selling rainbows on the internet … we want to move a market.” —Andy Ruben, Co-Founder, yerdle
“We’re talking about underutilized assets being brought to bear at the right point of time. No one has to do this out of guilt. You can consume in a better way. It’s just better retail.” —Adam Werbach, Co-Founder, yerdle
In the sharing economy, access trumps ownership. It is a transformative idea about how people relate to goods: Own less and network more to share goods. At the heart of this is a shift in business models. Yerdle, a San Francisco-based, for-profit social enterprise, is pushing the boundaries of conceptions of ownership and consumption.
Norton began by asking co-founders Werbach and Ruben why they started yerdle. Humanity uses 60 billion tons of natural materials each year, Werbach replied, saying we need new models of consumption in order to sustain our world. Prior to World War II, people rented drills, now we often own more than one—and a power drill is used for just 12 minutes on average in its lifespan. We have moved not toward more access of items, but more ownership of items. Yerdle is a response to these inefficient ownership models.
Yerdle’s idea of collaborating around goods is gaining in relevance around the world today. Our things often sit laying fallow, and Yerdle is a way to give these items linear movement through borrowing and donation. To date, yerdle has 20,000 users in the San Francisco Bay Area.
How does this model work with our expectation of convenience? Ruben challenged the audience to reflect on the many goods necessary for children. High chairs, car seats, cribs, toys—the list is immense. Ruben next asked how long those items are used per child. In many cases it is only six months to two years—it’s an inefficient use of space to keep the items, and yet too expensive to buy new items for every child. Yerdle provides the opportunity to own durable goods only when they are needed, pass them on when they are no longer needed, and reacquire them when the need arises again, all at no cost. Shared consumption is about a better model of ownership.
Norton asked about yerdle’s business model and what alternative business models companies in the room should be considering. “One trillion dollars of durable goods are sold annually in the United States and three trillion globally. There is a lot of value here. We anticipate that 25 percent of market value could be shareable,” Werbach explained. Although profit models are a priority, the focus now is on building an effective and efficient system. Yerdle is currently experimenting with new use models, including a “get-it-now” option, which will let members receive goods quickly by mail.
When asked how businesses can engage with the sharing economy, Ruben encouraged them to focus on the potential business benefits. Consumer loyalty is critical in an age when customers can access goods online from a variety of retailers, and companies that provide incentives to share goods will increase consumer loyalty, as Marks and Spencer’s Shwopping campaign, Target’s REDcard, and H&M’s garment collecting all show. Other business benefits include employee engagement through internal collaborative sharing platforms and access to new markets through sharing platforms. Ruben warned that there will be winners and losers: In the shared economy model, companies that make products at lower cost but at lower value will lose.
When asked what makes yerdle different, Werbach responded that there are a number of distinguishing features, the first of which is yerdle’s clear social mission. Furthermore, Yerdle operates with a credit system. Every time a member posts an item, he or she earns credit to access other goods, which Werbach called a currency of reciprocity. Yerdle’s model also looks like other shared-consumption platforms (eBay, Craigslist), which Werbach said is OK: The more common that shared consumption becomes, the bigger yerdle will become.
During the Q&A portion, an audience member asked how yerdle engages existing institutions that rely on lateral movement of goods, like Goodwill. Yerdle encourages society to move items that are laying fallow. The result is not a shift from Goodwill to yerdle, it’s a shift from garages and home storage to both Goodwill and yerdle.
A participant from the University of Oxford asked about yerdle’s plans to expand geographically. Werbach confirmed that yerdle is now looking to new markets within and outside of the United States.