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Posted by JP Gownder on August 30, 2010
Product strategists should check out this article in today’s New York Times about online borrowing. Think of it as a Web-empowered peer-to-peer product rental program. The article describes how Web sites like SnapGoods allow private owners of products to rent them out for temporary periods of time to consumers who want to use – but do not (or cannot) own – those same products. It’s a product rental marketplace, smaller than but resembling a product sales marketplace (like eBay).
This peer-to-peer product rental approach to sharing complements another sharing technique that has been around for a while: timesharing. Vacationers who own 1/8 of a condominium in the Bahamas get to use it part of the time, as do their fellow timeshare partners. More recently, the Web enabled Zipcar to grow to over 275,000 users by 2009. Zipcar users make reservations to use vehicles in their neighborhoods on an hourly basis.
Much like the resurrection of layaway buying, product sharing is a response to economic difficulty: Consumer debt combined with less availability of credit is reshaping elasticity curves. Buying and renting out is one rational response to this new ethos; renting items and not buying them is the complementary response. This is yet another example of, as James McQuivey has written, how technology has shifted the product landscape toward consumers’ needs and away from industries’ needs. Today’s ethos of frugality and minimalism makes product rental seem to fit the zeitgeist.
This movement is also reminiscent of mobile phone sharing in the developing world, particularly in Africa. On the other hand, recently Africa seems to be catching up in individual ownership. This says something about mobile phones as a product. Some products are more plausibly sharable than others: While renting an Xbox for a weekend of gaming sounds fun, renting a toothbrush never sounds appealing. Mobile phones are ideally individual, not public, devices, linked to specific users, their settings, and locations. So sharing products probably has limits that vary by specific product categories.
What might the peer-to-peer product rental market mean for consumer product strategists?
I’m interested in learning what product strategists think about this emerging rental marketplace. Could it affect your product strategy in some way?
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