How to survive in the big scary collaboration economy: Price, Convenience and Brand recognition

The collaborative economy is becoming bigger and bigger, 51% of North-Americans have used a mobile app or website for a sharing service, and before 2018 over 80% is expected to be part of the collaborative economy characterized by sharing products and services.

The major reason behind this tremendous growth of the collaborative economy can be explained by the focus of these new companies; they truly understand what their customers want and why they want it. Disruptive start-ups enter the market and immediately change the rules of the game which is intimidating many large, established companies. All companies in the market have to adhere to the new rules or are doomed to disappear from existence, with the thought in mind that any new idea might pop-up to transform the rules again. This blogpost will provide traditional companies with strategies to remain competitive and relevant in markets disrupted by collaboration; by truly focusing on price, convenience and brand recognition.   

The major reason individuals tend to prefer sharing over buying is the amount of money they can save, “more than half of traditional purchasers will consider the collaborative economy if it can save them 25%” (Crowd Companies, 2015). However, the majority of the population is willing to switch back to buying after they had a sharing experience. Nearly 70% indicated that they would consider the buying option if it was cheaper than the sharing option, which brings good news for the traditional companies. To compete with collaborative start-ups two price sensitive strategies are suggested: ensure your price is lower than sharing alternatives or create your own peer-to-peer market place where consumers can buy and sell pre-owned goods of your brand. Reaching out for these price sensitive customers will result in lower total costs of ownership for buyers, more customers that are able to buy/use your products and thus more customers connected to your brand. In competing on price traditional established companies with a broader revenue base are advantageously positioned to provide greater value to their customers.

Besides price, convenience is the word most often used to describe a sharing transaction, and this factor poses a threat to traditional companies. Sharing services is characterised by “on-demand, web-enabled instant access to products and services” (Crowd Companies, 2015) which is difficult for traditional companies to provide to all their customers. The solution for traditional companies is to be creative with their resources, Nordstrom for example resells maker goods from Etsy in its retail stores and Waffle House, a common high-way restaurant, partnered with a delivery company to enable easy drop-off locations for parcels. When the same convenience as sharing services provide cannot be offered by traditional companies they should be creative with resources to provide other types of convenience customers may demand, this will eventually result in efficiency, partnerships and authenticity. Especially new technological advances should be utilised to compete with start-ups.

 Thirdly the rescue for your traditional company can be brand recognition, which serves as a promise for quality. Over 25% of individuals considering sharing, would prefer the traditional way of doing business if that would ensure doing business with a well-known brand. Even in the collaborative economy only a small amount of reputable brands tends to flourish, and once they become more famous, they run the risk of attracting negative attention such as Uber with illegal taxi services and AirBnB that is put to a limit or even banned in NYC and San Fransico. It is trust that plays a large role in the buying versus sharing decision since people prefer reputable brands that guarantee quality. The risk of getting negative attention is far larger for sharing brands relative to traditional businesses, therefor established companies should use strong brand recognition and positive brand sentiment to retain customers.

To survive in the big scary world of the collaborative economy traditional companies should focus on price, convenience and brand recognition. The needs of the customer should be the focus, and companies should be creative with their resources to satisfy these needs. Traditional companies that are open to give it a try in the collaborative economy different opportunities exist, such as starting a brand owned peer-to-peer market place, or partnering up with a sharing start up to build comfort and capacity for collaboration.



Crowd Companies, (2015). The new rules of the collaborative economy. [online] Visioncritical, pp.1-28. Available at: [Accessed 10 Mar. 2016].


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