Counsel Exchange Economy

FUTURE SIGNS LOWE COUNSEL LOWE AND PARTNERS NOVEMBER 2011

Exchange Economy: The Rise of Barter Society


Continued economic uncertainty is forcing people to evaluate alternatives to the traditional economic system.


Demand is growing for tools that allow people to exchange goods and services without using money.

Swap party in Beijing


Drivers

- Rise of Social Networking and the Information Exchange - Share Economy - Global Recession - Institutional Corruption and the Power Imbalance between regular consumers and the Financial Sector - Shift in Consumer Values - The rise of the Less is More philosophy - Push for Waste Reduction and Sustainability


Barter Networks are providing a real alternative in tough economic times.

Greek consumers squeezed by large wage cuts, tax increases and growing fears about the Euro are looking for creative ways to cope with a radically changing economic landscape.

A growing network in Volos, Greece uses a so-called Local Alternative Unit, or TEM in Greek, to exchange goods and services — language classes, baby-sitting, computer support, home-cooked meals — and to receive discounts at some local businesses.

“The most exciting thing you feel when you start is this sense of contribution. You have much more than your bank account says. You have your mind and your hands.“ [1]

— Maria Houpis, Co-founder of the Volos bartering Network.

Bartering Networks in Starved Economies


From Burning Man to NeighborGoods

While representing the oldest form of commerce, exchanging goods and services without the use of money is becoming increasingly popular and desirable.

Experiments in the emerging field of neuroeconomics suggest that exchange produces as much pleasure as consumption. When people exchange with other people, their oxytocin levels rise – in other words, transacting feels good.

Pioneering events like the annual Burning Man festival in Nevada demonstrate what can be achieved without traditional money.

“The spirit of giving at Burning Man is amazing, it really alters the dynamic and creates a sense of community, a community not oriented on status or background. Its totally refreshing and without sounding too gushy it did really change my life”

— Carl Cox, DJ.


Help Thy Neighbor

Neighborgoods has a simple proposition – we all have things we rarely use i.e. tools, BBQ’s, ladders ect. This Platform connects those with unused or rarely used goods with those who need to use them.

Saves money, creates connection and builds community: win win win!

Instead of presenting a thread it also presents potential for opportunities for connection.

Implication: How could your brand facilitate local exchange systems for your products?


Share the Land

Landshare is an online platform that connects those who share a love for locally connected food. It connects people with disused gardens to keen gardeners who want to work the land for cultivation of food.

Both owner and gardener can then share the ‘fruits of the land’ quite literally.


Most people are realizing that owning is sometimes not the best choice

Clothing and toy swaps are a great way for a brand to assist struggling families and foster community.

ThredUp – Mothers exchange clothing, books and toys online.

[2]

“It’s a cultural shift. People are pulling out of that hyper-consumerism of the early 2000s. It’s just really expensive to own stuff. We lease and rent so many big-ticket items, and now this idea of doing it with smaller things is really resonating with people. I think the current state of the economy has provided an interesting lens in which to see this movement.” [3]

— James Reinhart, Cofounder and CEO, ThredUP

Clothes and Toys Swap


BookSwap

The Guardian media group recently launched a national Book Swap with a 15,000-volume giveaway with books left in public places where readers are able to chance upon them.

The Book Swap encourages readers and writers to give their own favourite reads away.

“In an increasingly virtual age, book swapping offers a rare treat: a real book, left by a real person, simply celebrating how wonderful they found it to be.” [4]

— Laura Barton, Writer for The Guardian Newspaper.

[5]


A Global Barter Economy

The internet revolutionized the exchange of goods and services.

People are now able to bypass middlemen, thus reducing costs and connecting the end consumer with the source supplier.

“I think a few years ago it was more for fun but we've seen a real shift in the last year, and especially an increase in the last few months, where I think people are really doing it to get by.” [6]

- Jessica Hardwick, founder and CEO SwapThing, September 2008

[8]

[7]


Barter for Education and Healthcare

Trade School is a pop up classroom in New York City’s Lower East Side.

In exchange for instruction, teachers receive everything from running shoes to mix CDs.

OurGoods, a barter network for New York creative types helps users trade the skills or the things they own for the things and skills they seek.

“Barter asks both parties to talk about value. I’ve traded my work dress for my personal website, for a photo shoot, fencing gear, laundry access, research assistance, and designer bike attachments.” [9]

— Caroline Woolard, OurGoods co-founder

The Woodhull Hospital in New York introduced a unique scheme allowing artists, who often don’t have health insurance, to trade their art for health care.

- e.g. photographers taking pictures of new babies to give to the mother as a thank-you for choosing Woodhull hospital.

“An actor might put on role-playing sessions for staff, helping them rehearse how to break bad news to patients and loved ones.” [10]

— Amy Duquette, the Artist Access Program Coordinator at Woodhull hospital


Bartering Apps

Yapik is a location-based mobile app tailored to college students – providing an easy way for students to locate and barter goods and services within their local campus.

Barto is a location based mobile app that allows people to exchange or barter everyday items or skills/services of equal value.

Taskrabbit is a collaborative consumption service that allows you to post tasks you need completed and have other members (who have been vetted), complete them within the required time– it’s a great source of supplemental income with some people are generating over $5,000 per month.

[11]

[12]

TaskRabbit


Local Currency Systems

In an attempt to keep money within the local neighborhood, Brixton, an area in south London, has launched their own currency ‘the Brixton pound’. Not exactly an exchange economy but demonstrative of peoples wish to keep wealth local and also to bypass the established middlemen.

“You have to establish trust with the community. We want to hit home the idea of localism. It is crucial we engage all ethnicities and social classes; we don't want it to be 'us and them’. It's something concrete for people to understand – a bit like being part of a secret club.” [13]

- Tim Nichols, the Brixton pound project manager


Exchange Travellers

Couch surfing and home swaps have emerged as a popular way to travel with hundreds of sites around the world catering to every taste and budget.

Air BnB founded in August 2008, lets users seek out non-hotel travel accommodations listed by other users, has recently been valued for $1.3 billion and tops the list of start-ups most likely to succeed.

AirBnB Home Rental Site


Time as Currency

A unique pop-up ‘time store’ in Netherlands uses time as currency, allowing groups and individuals to pool and trade their time and skills (labor) for commodities.

“The current distrust of existing financial and economic systems and the radical cuts in art funding are an important driving force behind this parallel micro economy based on trust and solidarity.“ [15]

— Time/Bank Website

“The ongoing effects of the recession have left us all cash poor. Our time and skills, however, offer renewed forms of assets.” [16]

— MaryLou Costa, Writer for MarketingWeek [14]


Common Threads

Patagonia in conjunction with Ebay recently launched the Common Threads. Aimed at reducing waste, the initiative allows people to sell and/or exchange their used Patagonia products.


Implications

Consider developing alternative, non-monetary ways for people to purchase your products or services, such as doing work for local communities.

Help your customers to connect, share and exchange their unwanted products or skills with other like minded individuals.

Set up barter networks as a way of encouraging connections between local communities.

Introduce a skills exchange service internally within your company as a way of encouraging community and connection.

Enable people to pass on or exchange your products when they are finished with them instead of throwing them away.


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1. Rachel Donadio. (2011). Battered by Economic Crisis, Greeks Turn to Barter Networks. Available: http://www.nytimes.com/2011/10/02/world/europe/in-greece-barter-networks-surge.html?_r=1&pagewanted=2&ref=world.

2. Agency Nil, http://www.agencynil.com/

3. Caroline Woolard. (2010). OurGoods: New York's New Barter Network. Available: http://www.good.is/post/ourgoods-new-york-s-new-barter-network/

4. Closet Infinite, http://closetinfinite.wordpress.com/

5. Thred Up, http://www.thredup.com/

6. Stephanie Schomer. (2010). Bye Bye, Baby Gap: Trading Children's Clothes With James Reinhart of ThredUP. Available: http:/www.fastcompany.com/magazine/151/fast-talk-james-reinhart.html

7. Rachel Donadio. (2011). Battered by Economic Crisis, Greeks Turn to Barter Networks. Available: http://www.nytimes.com/2011/10/02/world/europe/in-greece-barter-networks-surge.html?_r=1&pagewanted=2&ref=world.

8. Laura Barton. (2011). Book Swap is great: pass it on. Available: http://www.guardian.co.uk/books/2011/sep/16/book-swap-great-pass-it-on.

9. A. Pawlowski. (2008). No cash? No problem, if you barter. Available: http://articles.cnn.com/2008-09-02/living/bartering.rise_1_barter-section-craigslist-trading-goods-and-services?_s=PM:LIVING.

10. Barter Card, http://nz.bartercard.com/

11. Amazon Trade In, www.amazon.co.uk/trade-in

12. Leo Hickman. (2009). Will the Brixton pound buy a brighter future?. Available: http://www.guardian.co.uk/environment/2009/sep/16/will-brixton-pound-work

13. Zopa P-2-P Lending, http://uk.zopa.com/zopaweb/public/about-zopa/big-idea.html

14. Grameen Bank, http://www.grameen-info.org/

15. Virgin Money, http://uk.virginmoney.com

16. Zopa, http://uk.zopa.com/zopaweb/public/about-zopa/big-idea.html


17. Lydia Lin. (2009). YouBike program kicks off. Available: http://www.chinapost.com.tw/taiwan/local/taipei/2009/03/12/199746/YouBike-program.htm.

18. Redbox, http://www.redbox.com/

19. US Cellular – Battery Swap, http://www.uscellular.com/uscellular/batteryswap/index.jsp

20. Partner and Spade, http://partnersandspade.com

21. e-flux. (2011). Stroom Den Haag. Available: http://www.e-flux.com/shows/view/9581

22. MaryLou Costa. (2011). Can alternative currencies see us pay our way out of economic decline?. Available: http://www.marketingweek.co.uk/disciplines/market-research/can-alternative-currencies-see-us-pay-our-way-out-of-economic-decline?/3030531.article

23. Matt Buchanan. (2011). An iPhone App for the Post-Rapture Barter Economy. Available: http://gizmodo.com/5804183/an-iphone-app-for-the-post+rapture-economy?tag=itp

24. Yapik App, http://yapik.com/

25. Caroline Woolard. (2010). OurGoods: New York's New Barter Network. Available: http://www.good.is/post/ourgoods-new-york-s-new-barter-network/

26. Meghan Young. (2010). The Woodhull Hospital Trades Art for Health Care. Available: http://www.trendhunter.com/trends/woodhull-hospital

Entertainment & Humor

Counsel Exchange Economy