There’s a group of hardware store employees in the San Francisco Bay Area who embody that sage observation that we humans are not “cisterns made for hoarding—we are channels made for sharing.” They also happen to personify a trend that’s reshaping our service-based society, one that increasingly has top consumer brands jumping on board: the sharing economy.
On given weekends, employees of Hassett Ace Hardware in Palo Alto, Calif., join other members of the community for what’s known as The Repair Cafe, an event where the public can bring in a variety of items to be fixed free of charge. Hassett has five employees who help organize crowds and divvy out tools to volunteers doing repairs while a store manager peddles a bike festooned with an Ace Hardware flag between Hassett and the cafe, picking up and delivering sockets, washers, plugs and spackle. Among the 130 items repaired during the most recent event in April (there have been three cafes so far): a lava rock garden fountain and a 200-year-old sewing machine.
The Norman Rockwell-esque scene ties in neatly with Ace Hardware’s current national marketing campaign, which touts the chain’s personal service and neighborly advice. In the purest sense, the Repair Cafe is also what the sharing movement is all about: people serving other people. And it shows that when consumers anywhere are transacting with one other, big brands increasingly want to be riding the bike with the flag on back.
While “the sharing economy” has become a buzzword of our consumer culture, perhaps a better descriptor is peer-to-peer, since these transactions involve people providing their own goods and services to others, the two sides often hooking up via technology. By way of websites, apps and social media, you can find someone on the other side of the world to rent out your apartment for a week (Airbnb), or use your car (RelayRides) or run errands for you (TaskRabbit).
(In contrast, the car-sharing service Zipcar, which Avis Budget Group acquired this past March, is not an example of peer-to-peer, as a company rather than an individual provides the service.)
Marketers have largely been on the sidelines of what the agency JWT calls the “peer power movement,” but that’s changing. Peer-to-peer commerce tends to be direct, emotionally satisfying, personal, green and have a very “now” quality about it—all catnip for brands hungry for more intimate connections with consumers. Several major marketers—among them, Chevrolet, Gap, Pepsi, Unilever—have been sniffing around. Even Walmart, the world’s largest retailer, has tried to find its way in, even though it ran into a buzzsaw of negative feedback and backed off as a result.
The peer economy is already having an effect on user-experience demands. Take shopping for a car.
“In Chevrolet showrooms, we see young car buyers look up the online profiles of our salespeople to pick out someone who has similar hobbies and interests to work with,” says Cristi Landy, product marketing manager for small cars at the General Motors brand. Peer groups have the power to impact brands and effect real change in social views of commercialism, materialism and marketing, according to Altimeter analyst Jeremiah Owyang.
Peer-to-peer is also having a very real impact economically. In North America, 640,000 people took advantage of car-sharing services in July 2011, according to Innovative Mobility Research, but that number is projected to balloon to 4.4 million by 2016, according to Frost & Sullivan. Since its launch in 2007, Airbnb has booked more than 10 million nights. Rachel Botsman, co-author of What’s Mine Is Yours: The Rise of Collaborative Consumption, puts the value of the sharing economy at $110 billion-plus.
Marketing experts suggest that the best way for established brands to be a part of this tsunami is by partnering with peer-to-peer upstarts. Such collaborations can “infuse freshness into the brand’s persona and broaden its appeal,” says Ann Mack, director of trendspotting at JWT. “It’s also an opportunity to learn about the audience, inner workings, strengths and weaknesses of peer-to-peer enterprises.”
That is precisely what the partnership between General Motors and the three-year-old car-sharing service RelayRides aims to do. Using RelayRides’ website and app, customers can rent unused vehicles at a rate set by the owner. Last year, GM tied its satellite-based communications and roadside assistance service OnStar to RelayRides, enabling renters to use the service to check for available vehicles, make reservations and locate vehicles via GPS. (About 6 million people subscribe to OnStar in the U.S. and Canada.) General Motors Ventures has invested an estimated $3 million in the startup.
The pact is part of the auto giant’s effort to position the Chevrolet Volt, Sonic and Cruze as “innovative products that offer what next-gen drivers expect,” says Chevy’s Landy. “The connection with RelayRides also gives us exposure with younger consumers and offers new car buyers a way to subsidize their car payments” by renting out their vehicles when they’re not using them.
Might the Chevrolet brand be in danger of peer transactions gone awry—renters trashing automobiles, say, or owners renting out clunkers? “There’s risk in any social discussion or business these days,” Landy concedes. But like other peer-to-peer services, RelayRides attempts to weed out the bad eggs via user ratings and reviews online. “This kind of sharing service is less adventurous than people might think,” she points out.
This past holiday season, clothing chain Gap partnered with peer-to-peer pioneer TaskRabbit, the five-year-old service that facilitates the outsourcing of random tasks to strangers. The retailer signed on with the service as part of a promotion aimed at lending a hand to harried Christmas shoppers, with customers at select New York and San Francisco locations spending at least $75 receiving a $25 TaskRabbit voucher. Says a Gap rep: “Our brand strives to introduce customers to unusual, up-and-coming services in fashion and beyond.”
Pepsi is another brand to have linked up with the popular service. Last fall, Pepsi Next sponsored a contest across 10 cities in which 200 winners got the services of a TaskRabbit personal assistant for an hour.
“We get two to three overtures a month from brands, mainly consumer packaged-goods companies that have an innovative culture,” says Jamie Viggiano, TaskRabbit’s senior director of marketing. Such alliances help keep the brands social and local, and enable TaskRabbit to reach a larger audience, she says.
In those partnerships, the marketer determines how it wants the peer-to-peer relationship to function. But how about when the peers themselves tell the marketer what to do? Enter five-year-old Carrotmob, which is similar to a cause marketing agency—only with a twist. It uses social media to help groups of people, or “mobs,” organize how to spend money with a brand, but only if the company puts its money where its mouth is by way of commitment to social responsibility (call it mob rule).
For example, “mobbers” spent a total of some $3,000 at a cheese shop in San Francisco this past February after it agreed to install bike parking and water-saving technology. Members of an online community of self-identified Carrotmobbers dream up a campaign, sign up a company, then organize their peers to participate. The grassroots concept caught the eye of none other than Unilever, which became a Carrotmob partner last September and is working on more programs for this summer.
Unilever was won over after it took a peripheral role in a campaign last year at Fresh & Easy stores in Pasadena, Calif. About 250 Carrotmobbers agreed to shop on a certain day if the stores installed non-ozone-depleting freezers. On the designated date, whenever a mobber bought at least three Unilever products at the stores, Unilever gave a donation to an environmental group. Lou Paik, Unilever’s shopper marketing manager, says the Carrotmob approach “gives us new ways to achieve our sustainability goals.”
While the peer-to-peer concept might seem cutting-edge, it’s really just a new take on old-fashioned bartering, as marketing experts point out. “There’s no fighting human nature,” says Ian Greenleigh, senior manager of content at agency Bazaarvoice. “Peer-to-peer commerce in the digital age is just a better way to do what we’ve always done, or wanted to do.”
The real difference is in how peer power can bolster a brand, even an entire category—just as Airbnb expanded the travel market with its cheaper, more varied accommodations, JWT’s Mack points out. Brands, she says, might “leverage consumers’ rising trust of strangers and proclivity for sharing to improve the marketing and consumer experience of existing offerings.”
Hassett Ace Hardware in the Bay Area has reaped enormous marketing benefits by way of the Repair Cafe, which has generated major media coverage (including a front-page story in the San Jose Mercury News) and social buzz. The cafe “shows that our store walks the talk of being part of the community and shows we are family-run and customer-service oriented,” says Jocelyn Broyles, Hassett Ace Hardware’s brand manager.
The peer-to-peer nature of the Repair Cafe is crucial to its success, according to Broyles. “It would send a whole different message if people came to our store to pay us to repair their things,” she says. “The cafe involves community members helping other community members, working to fix items that often have strong sentimental value. This interaction results in an amazing local connection, which our brand wants to be associated with.”
One cafe organizer, Peter Skinner, CFO of a local software company, calls the social element of the concept powerful. “Owners waiting around for their turns get to know each other—the common thread is their broken items. Fixers help each other on tricky jobs, people linger and chat around the coffee table,” he says.
Some may wonder whether these brand-supported, peer-to-peer partnerships can scale—but not Unilever CEO Paul Polman.
In announcing the Carrotmob partnership last year, the head of the world’s second largest marketer of consumer goods said: “I envision a 21st century form of business where the everyday consumer is helping to shape the social contract.
“It’s a business world,” he stressed, “that is moving from value-based transactions to values-based partnerships.”
Joan Voight is a contributing writer for Adweek. Follow her @shapelygrape.