Btwnthelines report december 2013

Betweenthelines Report DECEMBER 2013

REPORT NOVEMBER 2013

COLLABORATIVE ECONOMY AND ITS FUTURE


1.Collaborative economy

• drivers • what will be • what brands can do in colloborative economy situation

2. What is in a future?

• agugment reality and how brands can use it • new social reality and its consequence for brands

In our first report we would like to introduce you developing connection between techologies and society, more specifically web 3.0, web 4.0 and social and economical tendencies. We are going to start with a macro trend that now is started to develop and in a couple of years will become pure reality – COLLABORATIVE ECONOMY TREND . I . What is col laborative economy?

By the Collaborative Economy Coalition: "Collaborative Consumption, originally coined by Rachel Botsman in

her transformative book «What’s Mine is (Y)ours: The Rise of Collaborative Consumption», is an economic model that leverages communities or crowds to rent, share, swap, barter, trade, or sell

access to products or services."


I . I DRIVERS

All picture credits for Altimeter I . Societal dr ivers -Increasing population density and globalization: private ownership borders is becoming smoothers, sustainability responsibility is increasing, people are realizing that some of their needs can be solved in more eco friendly, one time use ways -Peter Pan Generation (see our short-term trend article): new generation that prefer to spend and not saving money and buy goods, refuse to have property in suburbs and prefer to rent apartments in city center, they are easy – going and changing locations, countries. For them is easier to buy some second hand goods or rent them than buy. Daily Mail «Generation refuse grow» I I . Economic -People’s desire of extra income, that gives them feeling of economical independence «The best-known example is Airbnb, based in San Francisco, which has helped 4m people find places to stay since it was founded in 2008—2.5m of them during 2012 alone.»


«Peer-to-peer car-rental services also provide insurance as part of the deal. Mr Clark says it took RelayRides 18 months to find an underwriter for the $1m policy that backs each driver during rentals. (Much of the 40% commission RelayRides takes on each rental goes towards insurance.)» Source 1 Source 2 -Increasing non-cash transaction I I I . Combination of societal and economic – urbanist ic -People are continue to moving to big cities, creating a huge megalopolis communities, changing cities social landscape Source 1 Source 2 -Community developing – as for a whole history of big cities establishment citizen’s estrangement was one of the main feature of cities (In cities there is high people density so that communicate with everyone would cause psychological and emotional exhaustion, so basically this emotional coldness is just a self-defense mechanism) but with people feeling lack of humans touch and sympathy they are starting to collaborate, first of all among friends of friends, neighborhoods and after all – wordwilde via technology Source IV. Techology -Payment systems developing NFC payments -Social media developing Source - WEB 3.0 Web 2.0 vs Web 3.0 and How it is affecting brand's stratigies Web 2.0 -connecting people to people Web 3.0 – connecting people to stuff -sharing, 3d printer -agugmented reality -marketplace experience


I . I I WHAT WILL BE «The rise of sharing requires us to use a new language where «access» trumps «ownership»; social value becomes the new currency; «exchanges» replace «purchases»; and people are no longer consumers but instead users, borrowers, lenders and contributors. All of this means businesses must redefine their role from providers of stuff to become purveyors of services and experiences» - Neela Sakaria, SVP of Latitude See more Currency of new way of exchange: • MONEY (central reserve currency) • ALTERNATIVE: Knowledge, skills, services, material items, time, reputation & social reach See more Collaborative Economy Requires a New Business Mindset: most representative table by Jeremiah Owyang Collaborat ive Economy Requires a New Business Mindset

Company Mindset:

Tradit ional Mindset

Social Business Mindset

Col laborat ive Economy Mindset

How they think:

Brands are in charge.

Deal with it.

Customers are in charge, we’re listening and will engage. We

care about your current experience

with our goods.

We must now care about extended life of good after we

sell it, and the relationshipbetween customers.

(PACKAGING, RENTAL SERVICES SPONSORSHIP)

Strategy they

deploy:

Brand Experience Customer Experience Marketplace Experience


All picture credits for Altimeter


I . I I I WHAT BRAND CAN DO IN COLLABORATIVE ECONOMY REALITY? As percentage of first (directly from brand or official retailers) will be decreasing brands have to find a way to maintain reputation and influence at market, that was created by consumers, where consumers are in charge of prices, experiences and where is no profit for companies.

1. Rent your products by yourself. Why miss opportunity to get extra profit by renting, landing your products by yourself . Plus consumers more likely will go for this kind of products to brand itself that to another consumer. Toyota Rental Service

2. Prolong brand experience in this new area by organizing and being a sponsor for civil’s initiatives. Citi bank launch bike share in New York Barclay cycle hire in London


3. Provide a platform Kickstarter, ebay, etsy – sharing communities. My Starbucks Idea from Starbucks 4. Create your own product l ive circle Branded currency How to stimulate new purchases: new level of gamification is your own brand currency – earn brand’s «coins» doing brand’s activities so you can buy new products. Best ever example is Nike program On line currency Bitcoin performs better than real exciting currency. TED «Future of branded currency»


I I . WHAT IS IN A FUTURE? As we’ve seen in collaborative economy overview one of the most important drivers is developing of internet. As web 3.0 is almost there, we wanted to go further and analyze in which direction it will go on and what will be next step. I I . I WEB 4.0 As Web 3.0 connected people to stuff, Web 4.0 will go further and connect us to… reality. Fringe between on-line and off-line is already quite thin and with technology development it will become almost invisible. AGUGMENT REALITY is a trend that leads us to this conclusion. The Guardian about agugment reality 1&2 HOW CAN BRAND CAN USE IT?

I . Studies and travel l ing Wikitude - travelling agugment reality application that is intergrated with tripadviser, twitter, Hotels and more.


I I . Printed media and advert isment Dunill agugment reality printed advertisment demo Heinz aggugment reality packaging promo Layar, the world's #1 augmented reality application for iOS and Android Drivers for agugment reality growth - technology Google glass – first affordable step. FORBES «Google likely to shatter the price of glass» News about google glass applications FORBES graphic techologies expectations


I I . I I NEW SOCIAL REALITY AND ITS CONSEQUENCE FOR BRANDS As BetweentheLines Team is really curious we decided not to stop at this half-step-point and try to understand WHAT WILL HAPPEND IF TECHNOLOGY WILL BE ABLE TO INTERRACT NOT ONLY WITH PHYSICAL OBJECTS (LIKE WITH AGUGMENT REALITY) BUT WITH DATA AND PEOPLE'S MIND. During research we founf out that this kind of technologies already exist – like with all other innovations Military segment is the first to adopt it. TECHNOLOGIES AND WAY OF COMMUNICATING With arrival of MEDIA material production gave its place to non material. And new need of area of saving and transaction information. Firstly it were computer to computer network and tham finally Internet arrived. Within 10 years new step was made – social media and social networks. And what is really innovative in them – they have capability to self regulation and organization, they can create goals into their system and new algorythm of making descions. That's what made analytics think that social networks could change non-material production. Concept Power to the Edge was discribed in book by Dr. David S. Alberts and Richard E. Hayes and it can be applied not only to army but for every type of business in this new information era. As everything changes so fast nowadays sucess of business can be depended only at one person. That means end of centralisation and scales of rank. McKinsey&Company «The social economy: Unlocking value and productivity through social technologies» Same can be imagine with a society: no more top, middle class and mass market – consumers already mixing products from different segments, not being ashamed of second-hand and mass market.


They will be more in a community organization, probably connected with their living area principle.

Power-to-the-edge 1) all commissions are delegated to executirs, collaboration instead of scale. 2) innovations will allow to combine

computers and humans minds 3) open information field – fast and everywhere (google glass + all references in social networks)

Future is collective knowledge, that can’t be achieved by one person, so new way of motivate employees is ask them to share

information as much as they can. The whole way of how and why to communicate will be changed, that will affect changes in

people’s value system. SOCIETY «Bobos» - coinage by David Brooks is an abbreviated form of words bourgeois and bohemian – fusion of two social classes that were in «war» for the past century. This new upper class now is a leading power to society and culture. In his book «Bobos in paradise» Brooks describes class inner conflict: bobos were fighting for freedom and multiplicity so hard that eventually their individualism in everything they do and decide leaded to nostalgia for tradit ions, fundamental connections and communit ies. And how to «marriage» individualism and this thirst for groups and deep connections? Local communities with their farm markets, coffe shops where you can meet your neigbours and – all collaborative economy functioning examples are taking their roots from this nostalia. Theoratically that kind of conflicts can lead to massive changes in society structure, but as we see so far bobos found a way to smooth it. And power-to-edge will only help to strengthen connections and way of communication.


WHAT IT WILL BE FOR SOCIETY AND BRANDS

Company Mindset Col laborat ive Power to the Edge

How they think Thinking about ways to prolong product’s life.

Consumer is more than friend – he is a partner.

Service is more important than a

product. Brands should be involved in sharing

ALL information – reputation is the inly

currency. Collective and community approach. It

is not about personalization

anymore, but about helping, creating a

community and brand’s impact in communities.

Strategy they deploy Marketplace experience Community experience.

Skills and services experience.


Other sources http://blogs.wsj.com/cio/2013/08/16/the-collaborative-sharing-economy/ Altimetr.com Dailymail.com guardian.com Forbes.com mashable.com McKinsey&Company.com Allthingsd.com Slon.ru Bobos in paradise David Brooks

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Btwnthelines report december 2013

Marketing