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How To Design For The Sharing Economy

How do you create the next Zipcar, Netflix, or Airbnb? Follow these five rules, from Artefact’s Lada Gorlenko.

The definition of ownership is changing. We are becoming less interested in owning products and accumulating wealth through long-term purchases. Instead, we crave experiences, seeking out things without much of a financial or time investment, and have a newfound appreciation of bargains and second-hand possessions (a song about thrifting is leading the Billboard charts as I am writing this). We increasingly consume products and services through renting, sharing, and purchasing subscriptions. Being "socially connected" is no longer just about having a lot of people to share your news with; these days, it’s about having a lot of people to share your stuff with—either for free or at a fraction of the market fee. It’s about collaborative consumption.

Last month, The Economist proclaimed that while "on-demand" consumption is still being defined, the fact that it is attracting the "big boys" like manufacturers, regulators, and insurance providers in search of a model that works for them means that it isn’t going anywhere anytime soon. Collaborative consumption is growing from a trend for the young and urban to a viable alternative for everyone. From renting a movie online (e.g., Netflix) to renting a stranger’s couch (e.g., Couchsurfing), the economy of sharing changes the way we behave, consume, seek new options, and commit to decisions. The phenomenon is not just about getting access to new cars and the latest movies; it’s also about creating a new type of peer-to-peer commerce, making meaningful connections, and establishing a sense of trust among those involved.

The new sharing economy presents unlimited opportunities for us as consumers to reinvent our spending habits. It also poses a number of big challenges for businesses, as it confronts the traditional notion of creating consumer demand for purchases. Businesses will need to reconsider their distribution models that encourage shared ownership, as well as product lines that support multi-user product life cycles.

If collaborative consumption is the commerce of 21st century, how do we support it with 21st-century design catered to the community rather than to individuals?

Most current designs are geared toward individual users and don’t seem to change much for multi-user experiences. Similarly, today’s collaborative consumption model is mostly about how the products are shared, not about how they are designed. How do we bring the two together? Here are a few principles to keep in mind as we navigate the new challenge of collaborative consumption as both consumers and business architects.

1. Identify the right match

That is, which products and services are best suited for collaborative consumption and which are better to be left as to the conventional marketplace? For example, it may seem that size matters; the smaller the product is, the easier it could be passed on to another user. Dig deeper and it’s not true if you consider, for example, shared car services such as Zipcar and Car2Go. Similarly, one may say that digital products are easier to share than physical goods. Again, this doesn’t seem to be the case, with many examples of neighborhood sharing and renting of everything from electrical drills to furniture.

2. Allow for repeat customization

How do we design for recurring customization of a product so that subsequent owners can make the product feel like their own and remove the traces of previous ownership? Software customization is relatively easy: Wipe it out, and it’s ready. How about customization of hardware, beyond changing covers and decals? If a new owner wants to change a particular module or add a peripheral, keeping the otherwise working product, how do we support it? Once again, cars give many examples of re-use and re-customization. But digital products still operate in the throw-away mode once an owner discards a product. There isn’t a sustainable model in place for recycling mobile phones or any other kind of electronics in the same way there is for paper and plastic products.] This makes them much less sustainable than they could have been otherwise.

3. Re-think maintenance to prolong product lifecycle

We tend to look after products we own to prolong their life. When products change hands often, wear-and-tear is a big issue. What are the materials that will make products look new longer? What are the techniques for easy refresh, so that a product is more appealing to new users? How should design of a product change to accommodate new maintenance models? Also, if shared products will tend to live longer, how do we design for easy upgrades of hardware parts?

4. Allow for multi-user scenarios

The previous challenges relate to sequential collaborative consumption where products are passed on from one user to another. However, collaborative consumption also stimulates concurrent usage among different users, such as when multiple users interact with a multitouch surface or similar interfaces. These interactions can also be parallel multitasking, in which multiple users interact with the same device doing different tasks. Consider, for example, a case where one user works on a PC directly while another accesses the machine remotely. Simultasking will reqire a lot of design innovation in order to tackle these collective experiences.

5. Understand that reputation is the new currency

Collaborative consumption creates a new system of credit, for both online and in-person sharing. Online interactions are particularly prone to questions about trust: How can you trust a vendor who isn’t completely traceable. Any bank that lends you money has access to your credit score. By contrast, you need to earn the same kind of trust from each and every online community; your LinkedIn reputation means nothing to Ebay. This ought to change very soon. If we want to support collaborative consumption, UX professionals have a huge role to play in figuring out trust verification and the very nature of online verification.

We may not have all the answers yet on how to design for collaborative consumption, but its potential as a key ingredient in a green economy is clear. The practice supports social sustainability by creating communities of people who want to share what they own and by encouraging trust among those involved. It also supports environmental sustainability by enabling products to live longer, reusing parts and materials, and reducing electronic waste. Now, we just have to figure out how to make it appealing to everyone.

[IMAGE: Sharing via Shutterstock]

Kelly Rakowski/Co.Design (Illustration)

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  • Team myBestHelper

    Love the concept of "reputation as the new currency" - it truly is and it fuels the "trust between strangers" we are seeing as the foundation of both the social networks and the sharing economy.

  • Marco Torregrossa

    Thanks for the very spot on article. I am doing some researches on the flip sides of the sharing economy, some of them in relation to eco-design. I would appreciate any input to the points below:

    Rebound effects (e.g. money saved from car
    sharing is invested in long distance travel);

    Vast increase of logistics;

    Can trigger more consumption, if lending is used
    as “test phase” for new products;

    Quicker “dumping” of old products in exchange of
    the newest versions, if product is lend instead of owned.SeeSee a recent presentation I delivered on the topic here:

  • leighjeffery

      Sorry i totally misunderstood your comment. Looks like we are on the same page! LOL! Sometimes i read too fast and miss the point;p duh. 

  • Jamie Moran

     I was actually getting at the same thing that you're referring to - that people will start realizing that they have invested too much time in "social networking" but that it's not as social as...actually being social and networking... in real life. But there is room for social media to fill in the blanks of making those connections, through apps that integrate with action-oriented activities rather than just informing and building awareness. 

  • Steffan Williams

    A really insightful and interesting read into the emergence of collaborative consumption. Perhaps the progression of 3D printing techniques and the predictions of its growth to offer independence in offering personal and community-based manufacture may offer opportunities for companies to encourage peronalisation of products in relation to their evolving existence. 

  • KirstenNelson

    Enjoyed the article, Lada. Very well written and a refreshing positive outlook on the new generations. Collaborative consumption offers a much brighter perspective as we shift into a more technologically centered world.

  • Jamie Moran

    Collaborative networking is starting to take on a more action-oriented approach. Where social media in the last 5 years has focused on communication and awareness, services utilizing the social media channel as a device to actually accomplish goals are becoming more popular. It's moving from the faux-connectivity of social media to real life connections using social media simply as a platform, as seen through services such as Car2Go & CouchSurfing. I think another layer, Augmented Reality, will present some really cool things in the years to come to add to this phenomenon of getting people off their computers and living life, using social media as a driver. 

  • KirstenNelson

    While augmented reality looks pretty cool, it also is a little bit scary IMO. Bit of a double edged sword--much convenience accompanies technology, but are we getting too close to Space Oddesy 2001 kind of situation?

  • Cheryl McCullough

    I feel the same way Leigh does. While I played in the street until my mum called me in for dinner, kids nowadays wouldn't even know what to do in the street coz they're too busy playing video games and sulking in their rooms!!!

  • leighjeffery

    " getting people off their computers and living life, using social media as a driver.-----> do you really think so jamie? I feel like we are heading into a world where people only know how to be themselves online.. which will lead to more and more social isolation. I've met so many young people who appear to have amazing lives on facebook, but in real life sit and drool on themselves waiting for the next quick photo opportunity:D  Great article btw, Lada,,, this one comment just caught my eye:) thanks for the amazing information!