Residential Lighting: Explain the collaborative economy.
Jeremiah Owyang: The collaborative economy is an economic model of shared ownership and access. It means that people are sharing goods and services amongst themselves using online tools to find these things. What it means is that people don’t need to buy things anew.
There are some radical impacts here to the lighting space. Transferable, durable goods could easily be shared, and that has impact both good and bad in the industry. Also, there are on-demand services now, like TaskRabbit, where people can install things, which changes the installation and design process. There are even marketplaces for designers that disrupt traditional design firms.
RL: Where did this come from?
JO: The recession drove some of this behavior. In the first phase of the Internet, only a few people could create websites. Now, with social media, everybody creates content and shares media. So a recession, a desire for sustainability and a generation that grew up on the Internet means we have people sharing four things:
1) Goods. They share furniture with each other, even lighting fixtures. They have marketplaces for used goods.
2) Services. With oDesk and TaskRabbit, people make themselves available to do things, including design. You can access designers from around the world who can help on a whim. High-end sites like PopExpert teach people how to be a chef and do yoga. So you might find designers there.
3) Space. People are sharing their homes and office spaces. This impacts lighting. With some rates starting at $400 and going up to $2,000 a night, you bet they have high-end lighting.
4) Money. The SEC has allowed some crowd funding. Say someone has an interesting new light or lamp idea. With Kickstarter, you can submit money and help fund it. Novice lighting designers and amateurs who want to build a lamp can have “the crowd” fund it. We’ll see new and unique designs emerge.
The big trend is that the crowd is becoming empowered to build, buy and share products. This has significant ramifications for a manufacturer.
RL: What should retailers do?
JO: Identify what customers are doing. You might shift to a rental model and provide product on demand for a period of time. You could offer value-added services, such as insurance. Another model is to become a marketplace. You encourage people to trade lamps and lights amongst each other. You might take a percentage cut and be a kind of consignment store. Enable people who are creating, designing and sharing, and your brand can take a cut.
RL: Is this just a fad?
JO: Three major forces are causing this to happen. The first is societal change and includes sustainability and people wanting to share. The second is economic. The recession kicked it off. But also the population is increasing around the planet, so we have to be sensible with re-use. I’m sure there are idle lamps in warehouses all over the place that could be activated instead of building them anew. The third force is technology enablement — mobile and social tools, which are everywhere. Put these three things together, and you can see that this is not going away.
RL: Any final thoughts?
JO: “The consumer” is an antiquated term. They’re getting what they need from each other. And if they don’t share it, they make it. They’re empowered through the Internet. It means the crowd has become a company. Now, for all of you traditional companies out there, the logical way to benefit from this is to bring the crowd closer to you and enable them.