Peer Power: What's in it for retail?
AS PART OF ITS RECENTLY released "Things to Watch in 2013 Retail Report," marketing communications brand JWT discusses the growing strength of the peer-powered marketplace - a world of collaborative consumption possibilities facilitated by online connectivity and social networking. The JWTIntelligence report says the peer-powered economy, which dates back to the beginning of networks like eBay and Napster, "is about to reach critical mass," and suggests businesses might want to take a closer look at the new behaviors and expectations peer-to-peer (P2P) commerce is creating among consumers.
A year ago, CBS financial contributor Carmen Wong Ulrich described P2P marketing to morning host Gayle King as advertising your sale items or services in the online community, much like distributing a paper flyer in the neighborhood for dog walking services. Ulrich talked about P2P players like AirBnB.com, a nationwide side that bypasses the rental agent and puts homeowners and potential vacation renters directly in touch with each other, and car-sharing sites GetAround.com and RelayRides.com, where you can rent your car - or someone else's car - by the hour.
Of course, user reviews, insurance requirements, background info, maintenance, credit cards and Paypal all figure into the equation, but there appears to be a growing audience for, and some pretty creative applications of, these informal marketplaces and transactions.
Two recently launched P2P sites, for example, are not only taking the dining experience out of the restaurant and into the home, but they're touting it as a way to grow your real-life circle of friends. A mobile app called SupperKing, according to its website, "empowers individuals to display their culinary skills, share their dinner table or find a home-cooked meal in their neighborhood, transforming the typical solitary city dining experience and encouraging urban citizens to share resources and build community." Another site, EatFeastly.com, says it "democratizes dining" by matching hungry eaters with passionate cooks, who offer "authentic meals prepared and served in a cook's home."
Funding and lending site SmallKnot.com, launched last summer, invites locals to support the small businesses in their communities by providing funds for specific projects - a new pizza oven, patio or display counter, for example - in exchange for goods, services, perks or other benefits.
BlaBlaCar.com, operating in nine European countries, matches paying passengers with seats in cars, offering a new, affordable way to tour Europe. The best part is that riders can post how social they want to be, from Bla to BlaBla to BlaBlaBla.
While many of the newer P2P sites are based in larger cities and metropolitan areas, the "transforming" potential of peer-powered marketing is getting a lot of attention. Last month, in an article for The National, London journalist David Mattin said sites like SupperKing and AirBnB are part of "a broader move towards a peer-to-peer economy that represents the start of a historic shift - from formal commercial enterprise - in the way we consume and the way we live."
When it comes to the application of P2P concepts to retail, the JWT report says we can look for established brands to "strike partnerships with fledgling peer-to-peer services as a way to infuse freshness or modernity into their persona, broaden their appeal or get an existing consumer segment to consider the brand in a new light."
JWT notes the examples of Gap and Pepsi Next, which recently did product promotions with the help of TaskRabbit.com, a P2P site where users can "bid" on odd jobs or outsource tasks as varied as photography assignments, gift-wrapping, helping someone move, data entry, furniture delivery and assembly, surveying customers, procuring reservations at a hot restaurant and, in one recent listing, helping someone find the cell phone he left in the back of a Washington, D.C., cab. Think of it as the P2P version of temporary employment placement.
Online apparel retailer Karmaloop earned a spot on Internet Retailer's Top 500 last year for its peer-powered sales force. In 2011, Internet Retailer reported, more than a quarter of Karmaloop's sales came from its social network of 96,500 "representatives" that promote Karmaloop in exchange for merchandise: "Any consumer can sign up to be a representative on the retailer's website. After a rep signs up, he receives a unique promo code that he can share on social networks like Facebook and Twitter, as well as on blogs, message boards or flyers he can hand out. When a consumer enters the code on the retailer's site he receives a 20% discount the first time he uses it and 10% off thereafter. For each purchase made using his code the rep receives points, which can be redeemed for Karmaloop merchandise."
JWT cites Swedishome.com, Ikea's second-hand furniture selling site, as an example of a brand facilitating P2P's "connect and share" impulse. While it might not help sales of new Ikea products, Ikea is "inserting its brand into a process that would likely take place regardless."
Whether or not brands partner with P2P services or add P2P elements, JWT says, the P2P model can suggest new, more innovative approaches: Are there ways to take inspiration from the things consumers like most about P2P services? And are there ways to leverage digital technologies designed to match supply with demand, consumers' rising trust of strangers and proclivity for sharing, micro-entrepreneurs and so forth in order to better cater to consumers or market existing services?
P2P is but one concept in a brave new retail world, something I'll explore further next month in a special report, "The Future of Retail." To that end, I'm calling upon the power of my peers. Share your thoughts and concerns on the subject, along with any new or interesting retail methods, technologies and apps you've come across, via firstname.lastname@example.org.