Monthly Archives: October 2012

The new economy – Collaborative Consumption

As mentioned in an earlier blog post, I am a big fan of

It’s a winning combination for both the ‘host’ and the tourist. The site provides property owners with a global forum in which to secure bookings and earn an income, while at the same time offering travellers choice, a unique alternative to the traditional hotel room or backpacker hostel and the chance to live an ‘authentic local experience’ in their destination of choice.

Even better, it is social – full of user generated content with reviews, recommendations, links to Facebook and curated ‘wishlists’ from travel bloggers helping the tourist select their ideal accommodation based on the experiences and photos of others.

Airbnb has reportedly grown by 400% over the last year and I can understand why. It is so simple to use.

But what I have only recently realised is that airbnb is just the tip of the iceberg of a new economic phenomena known as ‘collaborative consumption‘. Enabled by web technologies, it is a contemporary and social form of consumption that involves bartering, sharing, renting, lending or swapping resources instead of buying or owning them.

Rachel Botsman is the co-author of the book, “What is Mine is Yours, How Collaborative Consumption is Changing the Way we Live” and explains the concept in this TED talk:

Perhaps the most fascinating aspect of collaborative consumption that Rachel Botsman outlines is the fact that “technology is enabling trust between strangers.” As she explains, the combined effect of social networking and technology is creating a global village where people can mimic the traditional bartering behaviours of old in a new and evolved way. As a result, we are seeing far more peer-to-peer sharing and reuse of resources thereby extending the product lifecycle for some items.

There are numerous examples of organisations who have adopted the collaborative consumption business model. Some of the more well known include:

Getaround is a carsharing community. This site provides a portal for car owners to rent out their cars short-term to others. The renters can locate and book a car on their smartphone, pick up the keys from the owner and then drive away for the agreed time.

Need an office space? Loosecubes provides a portal in which independent workers can rent out a ‘cube’ within an office or workspace. Not only do you receive the hot desk, but the chance to meet and work with other professionals.

Snapgoods is a site where neighbours can borrow or rent items from each other – from lawnmowers to backpacks. The owners simply post an image of their good and a neighbour can reserve and borrow or rent it when required.

Swapitbaby is an Australian site that offers parents the chance to swap toys, clothes, prams or other baby/kids merchandise via a credits/points system.

These online communities are a fabulous example of how social media and new technology has connected and empowered consumers, allowing them to sidestep the traditional B to C (business to consumer) channel and create a whole new network of consumers sharing their resources. Green, affordable and fun, their credibility and trustworthiness is boosted by the reviews, ratings and links to other social media platforms such as Facebook.

So what does this mean for brand managers and marketers who are traditionally focused on stimulating individual demand for the purchase of new products and services rather than sharing or recycling? Does collaborative consumption shrink the marketplace? Is this something that marketers should be scared of?

I don’t think so. In the current environment of rapid technological advancement and increased consumer empowerment, the best marketers need to be adaptable, forward thinking and innovative. While collaborative consumption may seem a little intimidating or challenging, marketers need to consider the fact that it also offers a number of opportunities including access to new markets – ie. people who may not have initially purchased a brand’s product but ‘trial’ it via collaborative consumption – and a powerful source of word of mouth advertising.

Perhaps the biggest challenge for marketers will be changing their paradigm and rethinking how to promote products and build brand reputations in line with an extended product lifecycle, new emerging key influencers and a ‘we’ versus ‘me’ mindset.

An interesting challenge!

Have you used these sites to rent, share or swap? How do you think think marketers can adapt? Love to hear your thoughts.

Until next time.


World of Mouth. Really?

Positive word of mouth is one of the most powerful forms of marketing and coveted by brands. Why? Because it offers consumers a ‘borrowed experience’, that helps them navigate the purchase decision making process. It is so powerful because it is a referral from a trusted source – a friend, family member, colleague or peer – who have no commercial gain in recommending a product or service.

There is a great deal of comment about how social media has transformed the nature of word of mouth in the modern world. Erik Qualman, author of Socialnomics has called social media a “world of mouth” speculating that it has widened the source of recommendations by connecting consumers and amplifying word of mouth on a global scale. Social media has also been referred to by others as “word of mouth on steroids” or “word of mouse”.

But is it really? Can we really trust the reviews and comments posted by social media users? Are they motivated by a genuine regard to share recommendations to others in our social circle which has been widened by technology or is this connection being hijacked by those motivated by self interest, commercial gain or organisations themselves? Has ‘cash for comment‘ become mainstream and taken out of the hands of radio and television personalities and placed at the disposal of the common person?

A recent article in The Age, shamed a number of authors who have been writing glowing reviews of their own work. According to the article, writer R.J. Ellory’s posted reviews of his own book under fake account names saying that it was ‘a modern masterpiece’ that it will ‘touch your soul’. This is a practice known as “sock puppetry” or “socking” – the process of adopting an online identity for deceptive purposes – such as writing reviews, creating an illusion of support or generating comment online. It can also be used to disparage the products of competitors, something R.J. Ellory did – posting negative reviews of books written by fellow authors of the same genre.

Hotels and restaurants have long been accused of writing their own positive reviews on sites like TripAdvisor or indeed penning negative reviews of competitors. So much so that the UK Advertising Standards Authority ruled that the site could not claim or imply that “all the reviews that appeared on the website were from real travellers, or were honest, real or trusted“.

A quick trawl of the internet shows how easy it is to purchase positive comments or reviews. has a special section just for review writers. For just $5 you can purchase a range of reviews, testimonials and ratings from around the world on The site also offers a simple, cost effective solution: “Our team can help your business grow and promote your products by posting positive reviews, articles or blog posts on the internet. It is our responsability to locate specific blogs or websites to promote the products that you need to sell.” Pity about the spelling mistakes – but perhaps that may make the review look more authentic.

These are just a sample of the many sites offering comments for cash and according to research company Gartner, we can expect that by 2014, 10-15% of all social media reviews will be fake or purchased.

On the flipside, what about those savvy consumers who have recognised the power they hold with a few strokes of their own keyboard? I will always remember the original story back in 2009 (a lifetime ago in social media terms!) of the Commonwealth bank customer who tweeted about how their mortgage approval had been held up and after a month of trying to sort out the problem received a priority, personal response from the bank within one hour and 17 minutes of posting their complaint online. There is no doubt that a number of consumers are deliberately posting about brands to elicit discounts, special treatment or ‘jump the queue’. There has even been talk of guests blackmailing hotels with the threat of a bad review if they do not get an upgrade or discount.

So is social media really a ‘world of mouth’ or another beast altogether? From my perspective, I have to admit, I do use review sites in my decision making process – and find them enormously valuable.

Perhaps the solution is to ensure that we all take on the shared responsibility of diluting the fake reviews but actively writing our own genuine ones. What do you think? Do you write or read reviews?

Until next time.

Social Travel

I have just returned from a trip overseas which was dominated by social media. At a time where mobile phone data roaming is so expensive, I deferred to Facebook to stay in touch with family and friends whilst travelling and communicate with friends living overseas to organise catchups and send real time messages rather than sms when the venue had to be changed as it was not open at the time we originally scheduled to meet.

With over 75 million reviews and opinions, and 50 more posted each minute, TripAdvisor was my first go-to social site to consider what to do in each location and also solve problems like – the best way to get to the airport and which moroccan cooking class to choose. But my favourite all-time social media travel resource would have to be Simple to use, it allowed me to book an apartment in France,  ‘live like a local’, meet some fabulous and very friendly Parisians and enjoy space and facilities at a price far less than it would have cost me in a small hotel room.

All through my two weeks abroad, I was also surrounded by social media offline. Where once you might have seen “recommended in Lonely Planet”, you now see green Trip Advisor stickers displayed as a stamp of credibility in the window of restaurants and cafes. On two occasions, I was told that if I was happy with the service, to please write a review online. And even when I was deep in the ancient medina of Marrakech, I saw a “like us on Facebook” sign.

To me, this showcased the power, ubiquity and pervasiveness that social media has all around the world. But more so, it demonstrated how social media has transformed the travel and leisure sector. Is there really any need for a travel agent anymore? In the past they played an advisory as well as a booking role, but I see no need to use those services when I am alerted to great airline prices and destinations through my Facebook friends and can book everything from flights to insurance myself online. Is there really any need for a guidebook anymore? I still see a range of Fodders, Lonely Planets and Rough Guides for sale in bookshops but have no need to spend $50 (and carry the weight!) on a book when I can use my ipad to discover comments and suggestions from just last week on places to see and things to do.

We talk about social media connecting people, empowering consumers and making the world smaller. Nowhere have I seen this demonstrated as much as I did in the travel sector – and whilst I know that there can be some manipulation by providers and even consumers, the overwhelming number of posts by ‘real people’ gives me confidence to trust and listen.

On the flipside, some have suggested that social media can in fact limit the whole travel experience. According to one travel writer,  “the more we connect with the world above and beyond us, the harder it is to be present wherever we actually are”. 

For me, social media enhances the travel experience, especially for independent travellers. Though I will admit that on this occasion, I probably received more recommendations online than from fellow travellers. What do you think?

Until next time.

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