4 of 28

Economic process that allows individuals to “make money with underused assets” (PwC report, 2015)

Technology has dramatically lower the transaction costs:

Lower shared-asset prices
Increasing potential amount of consumers

Sharing economy is present in virtually every single category of services:

AirBnb: renting apartments
Uber: private driver
Neighborgoods: renting goods from your neighbors
Turo: car rental

Picture of the Uber App opened on a smartphone with AirBnb website in background - Taken on March 29th

What Is The Sharing Economy?

5 of 28

What Is The Sharing Economy?

6 of 28

→ 9% in Entertainment and Media

→ 8% in Automotive and Transportation

→ 6% in Hospitality and Dining

→ 2% in Retail

In its 2015 consumer report, Price Waterhouse Cooper highlighted the rise of interest for the global sharing economy in the United States

The Sharing Economy Is A Rising Trend

Percentage of adults who have engaged in a sharing economy transaction:

44%

US consumers familiar with the sharing economy

19%

US adults who have engaged with the sharing economy

Of US population are providers of the sharing economy

57%

US consumers who thinks access is the new ownership

7 of 28

Luxury Vs. The Sharing Economy

The luxury industry is slowly getting into the sharing economy through different channels such as, house rentals, private aviation or even ground transportation. Today, 25% of american users of the sharing economy are making $100,000+ every year.

Luxury Vs. Sharing Economy

Comparative table - April 15th 2016

8 of 28

Luxury Vs. The Sharing Economy

The luxury industry mostly answers to the Esteem and Self-actualization needs for its customers. They purchase luxury because it is supposed to be qualitative, but also because it is a symbol in their community’s context. Being an actor of The Sharing Economy is a distinctive symbol as well in a community’s context. There is a match in terms of customer’s value proposition.

Brand Positioning according to Kapferer, 2012

The Maslow Pyramid of Consumer Needs

Luxury & The Sharing Economy

9 of 28

New Consumers, New Value Proposition

Today’s luxury consumers are very different than 20 years ago. According to FutureCast, 25% of US adults making more than $500,000 are millenials

These new consumers are not looking to reach a social status through the consumption of luxury goods or services. They are looking for an experience

Millennials grew up in the digital era and are therefore very comfortable with the idea of purchasing high-end services with their phones

Have a closet full of clothes, but nothing to wear ?

10 of 28

All About The Experience

New technologies have allowed young luxury consumers to “hack” traditional ways of luxury consumption. Thus they are now able to reach new and more high-end types of luxury goods and services.

Six years ago, if you wanted to have a private driver with a black car you had to pay a lot of money and certainly be a millionaire. Today there is Uber, which is an affordable on-demand private driver.

When Sacha, 24 year-old, orders an Uber, he is looking for three main criteria:

“Conviniency” of a one-tap order
“No Cash needed”
“High-quality service”

For Sacha, Uber does not make him feel like a billionaire. Instead, the service makes him feel like a smart consumer who “knows the best way to get around the city”. Thus, as we can see, it is “not about exclusivity” or social status. Rather, it is all about the experience.

Uber driver driving a $130,000 car. The ride costed Sacha $22. Taken on January 28th in London

11 of 28

Third Party Guarantee

→ As Brent Handler (CEO and Founder of luxury home sharing service Inspirato) explained, “the key to drawing in the affluent is to ensure the accessibility of information combined with the services, and verification, established by the luxury hotel model.”

→ According to him, this means having a third party that would guarantee the reliability of the service offered in case the experience would not go as planned.

→ For Instance:

Airbnb secures all of your trips by giving you a full refund if the service received was not as good as promised by the leaser
Uber can give you a full or partial refund of your trip if the driver took the wrong way or if you had a bad experience
JetSmarter (Private jet company in the sharing industry) promises you flight credit if you have delays during your trip

12 of 28

Real-Life Case: UBER

Let’s take a look at what is the Uber experience about (April 22nd, 2016):

Order the car

2. Receive notification of arrival

3. Get in the car once your driver is here

13 of 28

Real-Life Case: UBER

4. Ride in style and comfort (video)

5. No physical transaction. Uber later sends you a receipt through email.

14 of 28

Real-Life Case: UBER

→ Uber provides a true 5 star experience for anyone on relatively low budget

→ My driver had placed a couple of fresh bottles of water and candies in the back in case I wanted some

→ As Frank, my uber driver, told me, “what people like the most about Uber is the superior service compared to regular taxi.”

Unique Experience, Affordable Price

Comparative Table between Uber and Taxi based on my experience and feedbacks from the Uber driver- April 23rd, 2016

→ Uber’s customer service is one of the true added value of the service. People feel protected by it, in case something would go wrong with their experience

Partial refund by Uber Customer Service Team after my driver took the wrong way last summer - June 22nd, 2015

15 of 28

Home-Sharing and Luxury

The home-sharing industry is also extremely exposed to the sharing economy. On one hand homeowners want to optimize their revenues by renting out their properties and on the other hands, consumers are looking for good deals. However, we now see people with high revenues enjoying the benefits of home sharing as they are looking for different types of vacations.

Sylvie, who manages high-end AirBnb properties in Cannes, explained what attracts her wealthy customers the most about the sharing platform:

Flexibility: thanks to the “easiness of booking” and the plethora of choice, customers can chose their getaway location at “the very last minute”

Their experience is superior as they can now live like locals and have an “adventurous” feeling about their trip. It is almost like they were “moving to another city each time they went on vacations”

One of Sylvie’s apartment located in Cannes. The weekly rate is more than 7,000 euros during the film festival - Taken on April 10th

16 of 28

All About The Win-Win Situation

Yves, who owns a villa in Antibes, explains why he rents it to students between september and april and to tourists in the summer:

Convenience: Having a 300m2 villa with nobody inside the entire year because he lives abroad doesn’t has any purpose and it costs a lot. Having the same people during the low period is convenient because it doesn’t request a lot of efforts and it covers the daily costs of the property. During the summer, the rent is much higher so it is generating revenues for him.
Esteem: In a way, he believe that possessing a 1.5million € is a symbol of success to him and to his environment, but letting it been used by other is a way to being part of a sustainable movement. He said “Sharing is caring. I do care”.

David, a student living in Yves’ villa explains that the rent is lower for him than if he was renting an apartment, furthermore, he enjoys the facilities of the house with his roommates such as the swimming pool, the garden, the paintings, the view, etc. He says that “the villa could be described as WOW”: for the happy residents, and for the people from the outside also when they hear about the ratio quality/dream/price.

17 of 28

Mehdi travelling for its first time on a private jet with his girlfriend after purchasing a trip on a connected private jet charter service

All About The Pleasurability

Once again, new technologies have allowed much more people to access what we were thinking by “exclusive luxury previously”.

Ten years ago, if you wanted to travel by private jet, you better have been a millionaire. Today, Mehdi, who is a 28-years-old recent business school graduate travel almost twice a year with an affordable on-demand private jet. This has been possible through technology which allows people to compare the prices of private jet (and actually, it’s sometimes cheaper than a business class).

For Mehdi, flying private makes him feel like having the opportunity to enjoy a moment that elicits envy, status and power. In addition to the rational and emotional values provided by the service, he feels satisfaction and a pleasure during his trips that he loves to share. He also likes to share it on social media.

18 of 28

Shared Luxury, Sustainable Luxury ?

Among US adults familiar with the sharing economy, they perceive many sustainable benefits to it, such as:

The Sharing Economy, PwC

Creates a sustainable value for all Stakeholders :

CUSTOMERS

RESSOURCES

FINANCIAL

SUPPORTERS

INDUSTRIES

SUSTAINABILITY

OF THE WORLD

19 of 28

Ex: JetSmarter, Shared Sustainable Luxury ?

Ultimate luxury is more affordable than you think, JetSmarter

With Luxury Sharing, consumers with high-end tastes but not a sky-high income can rent an experience rather than being weighed down by ownership. "the experience" is more important, as people won't always want to do 'just luxury' or 'just average affordability'. From a company, this change in consumer behavior could generates through a disruptive business model in economies of scale and economies of scope: they have a larger audience.

Reviews of the JetSmarter App, people love it.

“ JetSmarter has changed the way I live my life in such an amazing way!!! I never thought I could experience flying private at this point in my life and I honestly don't know how I could ever fly commercial again! ”

20 of 28

A luxury marketplace for private jet charter creates value, and it’s logic :

A comparative marketplace → Transparency
A private jet flying more → Cost-efficiency
A private jet full for each way → Eco-friendly
A real-time & process-efficient offer → Better service, Better value

Ex: JetSmarter, Shared Sustainable Luxury ?

JetSmarter’s CEO says that flying private “is cheaper sometimes than economy”

How a private jet marketplace based on an App works ?

“ JetSmarter : where Luxury meets Logic ”. Optimizing the resources by sharing them is logic, even in the luxury industry. For example, people don’t fly with private jets for privacy anymore. They do that for the superior customer value delivered, and really not for the “private” of “private jet”.

JetSmarter’s CEO :

"The average private jet flies roughly 250 hours per year, but optimal utilization is around 1,200 hours per year"

"We believe that the market could get three to four times bigger with our efficient utilization models."

21 of 28

The HENRYs are the new luxury shoppers..

Millennials and the new luxury, PBJS 2015

22 of 28

..and the HENRYs prefer renting over owning

PwC, Bain&Co

Younger consumers value experiences over tangible items. They don’t see their purchases as achievements.

The HENRYs put a premium on experiences and finding opportunities to post a enviable experience to brag on their social channels. It’s the new social currency.

They embrace technology to rent luxury

77% of millennials prefer a pared down lifestyle with fewer possession. Luxury brands don’t represent who they are.

They think that luxury doesn’t mean owning

80% of millennials say that there is a real advantage to renting over owning luxury. They believe that shared is the new ownership.

They seek experience, access and inspiration

Millennials interested in luxury are looking for a 360° value to justify a purchase. Function, performance, accessibility, instagramability are crucial.

23 of 28

The HENRYs embrace technology

Sharing through technology drives their personal value.

The Luxury value becomes more interactional than transactional.

By sharing through technology their luxury, they creates a global value.

In this example, it’s not about a Moncler or Fendi product, it’s not about the Alps, the context is “I am wearing the latest winter collection of these two luxury brands while I am learning to ski. So… what do you think ?”

They don’t necessarily want the things they buy to define who they are, as they don’t see their purchases as achievements or trophies in the way the Baby Boomers did.

Instead, they are collecting memories like merit badges and actively seeking unique experiences. They want to create value in their luxury consumption.

24 of 28

The HENRYs prefer to rent than to own luxury

Rent depreciating assets, buy appreciating ones, luxury included. Flexibility first.

If they own luxury products, they will try to render them appreciating by renting them.

Leasing is much more flexible for the customer with a fast-paced life.

HENRYs think that it is more interesting to get the experience of a luxury product once instead of owning it and investing so much more, for the same experience. The owner also generates value by sharing its product.

WiN WIN situation, isn’t it ?

25 of 28

The HENRYs want a simple and superior luxury

Onefinestay provides the best customer-orientation market on the shared luxury hospitality. That is making a difference. The customers love it and use their service instead of going to 5-stars hotels...

26 of 28

Sharing in the Luxury Economy

The future luxury shoppers have come of age during a time of technological change, globalization and economic disruption. That’s given them a different set of behaviors and experiences than their parents.

They’re also the first generation of digital natives, and their affinity for technology helps shape how they shop. They are used to instant access to price comparisons, product information and peer reviews.

They have been slower to marry and move out on their own, and have shown different attitudes to ownership that have helped spawn what’s being called a “sharing economy.”

They are dedicated to wellness, devoting time and money to exercising and eating right. Their active lifestyle influences trends in everything from food and drink to fashion.