How Millennials and Big Data Are Driving the Sharing Economy
How big data and millennial purchasing habits are driving the sharing economy, exemplified by companies like Uber and Airbnb.
Join the DZone community and get the full member experience.Join For Free
Whatever you need online, you can make it happen in seconds. The sharing economy represents an era where you can get practically anything you need just by opening an app, whether it’s a ride, a room, or a graphic designer to create your new logo. If you want to find the best things to do in Amsterdam, you can do so at the click of a button or the opening of an app.
The possibilities of the collaborative economy are extremely exciting. But big data is playing a huge role in this way of doing business. The sharing economy is only going to grow and grow, but much of this is going to be delivered by big data. And traditional businesses are going to have to adapt to this new reality.
How Data Makes the Difference
Big data is a method of gathering data so you can make informed decisions regarding your customers before you actually get started. This economic model is enabling companies to easily meet the needs of customers wherever they happen to be, rather than forcing them to deal with a centralized location. Uber and Airbnb are great examples of this.
So how is data making the difference?
A common misconception is that the idea of sharing is responsible for driving the concept of the sharing economy. This isn’t true because people have been sharing for centuries. What has enabled the growth of the sharing economy is the role of new technology. Easy-to-use digital technologies allow people to easily purchase products and services on the go, wherever they happen to be in the world.
Data is part of this technology. Anyone participating in the sharing economy is likely to be sharing data, and lots of it. When individuals are entering information into the system, corporations can use big data algorithms in order to make recommendations based on the individual.
A great example is Local Digital's infographic which explores the Aussie political climate using data extracted from Google research tools like Google Autocomplete, Google Trends and Keyword Planner. With the insihhts from that, it becomes easy to provide personalized recommendations and a personalized shopping experience. .
How Big Data Benefits Startups
Big data has also had the effect of enabling startups to make their entry into the sharing economy. Even the smallest of companies have the resources needed to analyze and predict the needs of customers. They have access to the technology that allows them to scale data up and down, based on demand.
Thousands of startups are joining the sharing economy through big data simply because now they can.
Threat Becomes Opportunity
Believe it or not, until recently the big data-driven sharing economy was considered a threat by large companies. They saw their low-asset high-valuation competitors as major threats to their established networks. For a time, this was the case. They decided to try to fight companies like Uber and Airbnb by making them illegal.
But big companies have understood that the sharing economy isn’t going anywhere. Using their superior resources, the answer is not to crush the sharing economy but to use big data for them to get involved in it. Sharing is not just for startups, it’s for everyone.
The Position of Millennials
It would be impossible to talk about the sharing economy without making an effort to understand the position of millennials. With any new technology-based innovation, millennials tend to be at the forefront of it. Millennials were the first to adopt the idea of the sharing economy and it’s become symptomatic of this generation.
But what does this mean for businesses that don’t cater to millennials?
For a while, it meant that this wasn’t something they had to worry about. But millennials are responsible for a trend. They are credited with launching the sharing economy into the stratosphere and encouraging other generations to get on-board. One quick look at sharing economy services like Blablacar demonstrates that the people offering their services are not just young people.
The Sharing Economy is Not Going Anywhere
It’s clear from the growth of companies within the sharing economy that this isn’t something that’s going anywhere anytime soon. Bigger companies are increasingly embracing it because they realize the benefits that it can give to them. But what will happen to the sharing economy going forward?
In short, there’s no possible way to predict this. Theories range from incredible growth to complete stagnation. Regardless of what happens, there’s no doubt that it’s here for the long haul.
Opinions expressed by DZone contributors are their own.