Month: May 2023

Research on collaborative consumption for low and high trust requiring business models

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Dr Alex Zarifis

Collaborative Consumption (CC) and the sharing economy, where consumers do not purchase a product or service, but share it, is growing in popularity. This is due to a trend away from ownership towards experiencing. The first two areas of the economy that this business model disrupted were fare sharing and renting rooms for short periods. Other areas are also influenced but it is unclear which sectors of the economy will be disrupted next. Smaller niches of the economy, or areas where more public-sector involvement is necessary, such as the elderly and the disabled may not be at the forefront and may be the laggards losing out on possible benefits for years.

This research evaluates the current CC business models and identifies 13 ways they add value from the consumer’s perspective. This research further explores whether CC business models fall into two categories in terms of what the consumer values. In the first category, they require a low level of trust while in the second category a higher level of trust is necessary. Our survey evaluates whether there was a difference between CC business models that require a low level of trust such as a taxi service and those that required a high level of trust such as supporting the elderly and disabled.

Figure 1. Comparative spider diagram of value added by collaborative consumption business models for low and high required trust

The analysis verified that the consumer requires 13 types of value added from the business model which can be separated into three categories which are personal interest, communal interest and trust building. It is important for organizations to acknowledge how they relate to these dimensions.

It was found that CC business models can be separated into those that require a relatively low level of trust such as fare sharing and those that require a high level of trust such as supporting the elderly and disabled, as we can see in the figure here. For the business models that only require low trust, the consumer considered the personal interest value added more important, while in the those requiring more trust the consumer rated the value added of trust building higher.

The findings suggest that changing CC business model from one that requires low trust to one that requires higher trust necessitates a significant improvement in how the organisation builds trust. This can be considered a ‘step’ change in trust-building which would have to be a consideration at business model level. Iterative improvements at operational level may not increase trust sufficiently.

Reference

Zarifis A., Cheng X. & Kroenung J. (2019). Collaborative consumption for low and high trust requiring business models: From fare sharing to supporting the elderly and disabled, International Journal of Electronic Business, vol.15, no.1, pp.1-20. https://www.inderscienceonline.com/doi/abs/10.1504/IJEB.2019.099059 (open access)

Research on the six relative advantages in multichannel retail for 3D Virtual Worlds and 2D websites

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Dr Alex Zarifis


Have you made a purchase from a three dimensional Virtual World (VW)? Probably not, only a small minority have. When VWs first became popular fifteen years ago, people jumped to the conclusion that they were the future, the new platform to socialise online. Their adoption however did not end up being exponential. So why do the experts often think VWs, with their additional functionality are the future, but that future has not come yet? We decided to ask the consumer.
There is a degree of understanding on what each channel can offer but the relative advantage of each channel in relation to the others is less understood. By relative advantage we mean something the one channel, for example three dimensional VWs, have an advantage over two dimensional, traditional, websites. This research, evaluates the relative advantage between the channels of three-dimensional VWs, two-dimensional websites, and offline retail shops. The consumer’s preferences across the three channels, were distinguished across six relative advantages.

Figure 1 The three channels and six relative advantages in multichannel retail
In the figure, you can see at the top the six different relative advantages, and beneath them, how the three different channels perform, in relation to these relative advantages. Participants, showed a preference for offline and 2D websites, in most situations apart from enjoyment, entertainment, sociable shopping, the ability to reinvent yourself, convenience and institutional trust where the VWs were preferred.
We can look in more detail at the fifth relative advantage, that VWs have higher institutional trust compared to 2D websites. Consumers value the role of the VW as an institution in relation to trust. One feature that is appreciated is that the buyer does not receive your banking details. Some participants value the role of the VWs administration in identifying and warning about specific threats.
The findings illustrated in the figure, show that the consumer’s preference varies across the three channels, and six RAs. An organization pursuing a multichannel strategy, can adapt their offerings in each channel to fully utilize these different preferences.
While on most issues VWs are the least appealing from the three channels, framing the comparison with the six relative advantages shows how they have a useful and complementary role to play in multichannel retail. For example, customer support can be done in VWs. An organization, can use these findings to shape their business model and strategy.

Reference
Zarifis A. (2019) ‘The six relative advantages in multichannel retail for three-dimensional Virtual Worlds and two-dimensional websites’, Proceedings of the 10th ACM Conference on Web Science, June 19–21, Boston, USA, pp.363-372. https://dl.acm.org/doi/pdf/10.1145/3292522.3326038

Research exploring the language of the sharing economy, how building trust and reducing privacy concern on Airbnb in German and English

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Dr Alex Zarifis

Several countries’ economies have been disrupted by the sharing economy. However, each country and its consumers have different characteristics including the language used. When the language is different does it change the interaction? If we have a discussion in English and a similar discussion in German will it have the same meaning exactly, or does language lead us dawn a different path? Is language a tool or a companion holding our hand on our journey?

This research compares the text in the profile of those offering their properties in England in English, and in Germany in German, to explore if trust is built, and privacy concerns are reduced, in the same way.

Figure 1. How landlords build trust in the sharing economy

The landlords make an effort to build trust in themselves, and the accuracy of the description they provide. The landlords build trust with six methods: (1) The first is the level of formality in the description. More formality conveys a level of professionalism. (2) The second is distance and proximity. Some landlords want to keep a distance so it is clear that this is a formal relationship, while others try to be more friendly and approachable. (3) The third is ‘emotiveness’ and humour, that can create a sense of shared values. (4) The fourth method of building trust is being assertive and passive aggressive, that sends a message that the rules given in the description are expected to be followed. (5) The fifth method is conformity to the platform language style and terminology that suggests that the platform rules will be followed. (6) Lastly, the sixth method to build trust is setting boundaries that offer clarity and transparency.

Privacy concerns are not usually reduced directly by the landlord as this is left to the platform. The findings indicate that language has a limited influence and the platform norms and habits have the largest influence. We can say that the platform has choreographed this dance sufficiently between the participants so that different languages have a limited influence on the outcome.

Reference

Zarifis A., Ingham R. & Kroenung, J. (2019) ‘Exploring the language of the sharing economy: Building trust and reducing privacy concern on Airbnb in German and English’, Cogent Business & Management, vol.6, iss.1, pp.1-15. https://doi.org/10.1080/23311975.2019.1666641 (open access)