Etsy – the spoof video
In today’s mass commodity market, many things, many cheap things, look the same. Consumer preference is moving away from a manufacturing economy towards one that is based on a community marketplace, like the shift from mass market brands on the supermarket shelf to farmers markets. In the community driven marketplace, it is often scarce attributes which define the product’s brand such as local distinctiveness, hand made, designer inspired, locally grown, one off and fresh.
Scarcity has always driven value. Diamonds and pearls, as beautiful as they as are, have commanded exceptional prices because they are in limited supply. The degree of scarcity of crude oil correlates to inflation across global markets. Retail success story Lululemon cites scarcity, a limit of items made, as a key driver of its premium brand values.
If we take a look at community marketplace products and services, we can see some stellar growth. Take for instance Etsy, which grew 71% from 2010 to 2012. Etsy is an online marketplace which sells vintage and handmade products.Etsy are vigilant about protecting the concept of hand made and will delist vendors who outsource their product in a production line fashion. While everything that is for sale on Etsy could be sold on Ebay, Etsy is the go to place because it focuses purely on vintage and hand made.
Etsy now has 20 million members and sales will clock well over $700 million for 2012. Primarily an online presence, Etsy is also launching a pop up holiday shop in New York city’s SoHo neighbourhood.
The Farmers Markets is another example. Their key definition of scarcity is local, seasonal, the personal connection of the farmer and cottage industry. These scarcity attributes are hitting the sweet spot with customers. Research shows there has been an increase of 35% in Farmers Markets over the last 10 years in NSW Australia, an upward trend in a marketplace, where many other products are trending downwards.
If we look at these grass roots, community based marketplaces, we come back to the notion that the marketplace is a conservation, conversations where information and value are exchanged. Etsy CEO, Chad Dickerson, is on record as saying, those vendors who reveal more of their process of how they make things, sell more.
Community marketplaces, by their very nature, create things that are scarce and are increasing in value exponentially. There is also a reaction to the ubiquity of mass manufactured goods, just take a look at the growth in custom motorcycles. Triumph, the UK based custom motor cycle maker has been holding its rate of sales, while competitor sales fell as much as 24%. Australian custom motor cycle marker Deus, http://deuscustoms.com/, now has a business presence in Asia and the US, evidence of their confidence in the marketplace.
Community marketplaces and the value of scarcity are radically reforming the business world. They are toppling many iconic pillars of business and causing the sure and steady erosion of others.
So make yourself scarce. If you have not already done so, ask yourself what is hard to replicate about your business model, and how does that relate to scarcity and the community marketplace.
Hearts and Minds
Founder Thought Leaders Circle