It’s quite an unusual concept, to question the value of money as a construct in our everyday world, and to imagine ways of living without it. While alternative currencies have been around since long before money as we know it was created, we’re seeing increased enthusiasm in the developed world not just for substitute currency but also the creation of new currencies.

At Crowd DNA we feel that this renewed interest is in part due to the resourcefulness that economic hardship produces, in part due to internet enabled connectivity and part a new hacking mentality in the west.

When times are tough, money is tight and lack of trust in state control is pervasive, it is natural for people to voice their ideas for how they could ‘do things better’. With networking capability having reached new heights in developed society, the potential for these voices to be heard both locally and globally has sparked new ways of thinking, doing and bending the rules. As anti-establishment ways of thinking are adopted by do-gooders in society, the idea spreads that hacking the system is the optimal solution for living well.

Through times of great social and economic struggle we’ve witnessed regression to alternate currencies from communities both urban and remote, developed and not. During the Great Depression in the USA, rabbits tails and wooden discs were traded by businesses; Curitiba in 1970s Brazil saw the government boost the economy and the local community by distributing bus tokens as currency in return for litter clearing. Ithaca Hours is the New York based, oldest alternate currency in the world and very much still in use – one Ithaca hour of time is now worth US $10. Alternate currencies have allowed communities to survive in hard times, but they have usually been considered a short term solution, inferior to wider, state controlled fiscal policies and mint-produced money.

Over the past few years we’ve seen a big grassroots refocus on the idea of currency and playing around with it. We have trading in alternate currencies of time, skills and goods popping up like the Camden Time Bank, The People’s Supermarket, Freecycle, GoodGym, fashion swapshops and The Brixton Pound to name a few. In wildly unpredictable financial markets, people are redefining value skills and knowledge that they can provide and are in need of within communities, whether they be on or offline. They are practising unconventional transacting. We also have people creating new, virtual currencies such as Bitcoins and Linden dollars, which can be exchanged for US dollars.  We look to explore why.

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Our society is getting used to a non-conformist ideal. Average Joe and Jane aren’t convinced anymore that slaving to the system is working for them. Having played by the rules, they’re not reaping the rewards. They may have been made redundant, daycare for the kids has been shut down and their high street clothes are falling apart. Our consumerist values have shot us in the foot. People want to find other ways to acquire stuff, whether that be advice or a new garden bench, and they want more real connections to others. Economic Anthropologist Keith Hart calls money ‘an instrument of impersonal relations’; we are now focusing on creating networks of people sharing ideas, skills, time and starting initiatives to make things better, on a much more personal level.

Bartering and exchange isn’t just a way of getting free stuff, and importantly this explains why the rich and the poor are taking part in such initiatives in equal measures. It’s now acceptable to be anti-establishment, to hack the system, to love thyself and they neighbour but not the government or God. The word ‘hacking’ has gone from conjuring pictures of criminals committing fearful activity online, to alluding to playful, clever and creative ways of bending systems, using connectivity to achieve personal and social good. The Guardian newspaper even has a part of its Technology section dedicated to hacking (and we don’t mean the NOTW type).

Sugru, the moldable silicon product that allows you to fix and amend household items, tells us to ‘Hack things better’ in its strapline. It has become iconic in creative communities interested in this idea of living life differently. Their website is all ‘Power to the (handy) people!’ sentiment.This is not about dodgy deals or making do - it’s about making the choice to go against the grain of our ‘given roles’ as consumers by buying less.

Interestingly, this has happened at the same time as the act of handing over cash has become less visible and tangible, as we substitute our coins and notes for contactless payment cards and mobile wallets (here). The idea that financial exchange is becoming more invisible is interesting in light of the popularity of alternative currencies of exchange, where no money at all changes hands. Radical ideas such as Burning Man festival in the Nevada desert, whereby ‘participants’ do not buy or sell anything, but barter everything from sun cream to yoga classes are now inspiring the masses. It’s partly about self-sufficiency, and partly about being dependent on others to get by, and this pre-historic model of living is increasingly attractive to modern urbanites.

In trendy groups such as Metrosexuals in New York we’re hearing that upcycling is the new craze, and manipulating normal codes of conduct further, the coolest geeks in Silicon Valley and beyond are creating new currencies altogether using code.  Is money disappearing?

Bitcoins for example, are a ‘peer to peer cryptocurrency’, created by Japanese Satoshi Nakamoto that allow unregulated transactions across the internet, their value is unstable and they have no physical embodiment. They exist outside of any centralised financial authority and are untraceable to a large extent. This means that online transactions using Bitcoins achieve a higher degree on anonymity than any other digital option right now. There are also services which allow you to cash them in for American dollars, in much the same was as Linden dollars, the virtual cash of Second Life. Now, what is created online has very real effects on the economy offline - virtual goods are now worth $3 billion (here). Sometimes, mildly archaic ideas turn into new ways of living – many people now earn their full income from exchanging goods in virtual worlds.

Our desire to create new ways of living without money changing hands could be a stab at making life more meaningful and personal, where lives lead are increasingly insular. It makes sense that we’re looking for more qualitative ways to live life. It could be that disillusioned by modern living, we’re harking back to gift economies from more than 5000 years ago, relying on others to survive and seeing the social rewards, rather than focusing solely on acquisition of money for ourselves.

Now, we need to consider how brands could and should be using that germinating idea of alternative currencies to build consumer engagement.

Brands must adapt to human behavioural change, they cannot always create it. The value of being culturally plugged in to shifting norms can’t be underestimated, especially when it comes to topics such as our conceptualization of currency, value and spending, all three of which are being affected by prevalent sharing, bartering and exchanging behaviours.

A recent ethnographic research project we conducted UK wide with young people revealed that reciprocity is vital for brand affinity. Youth want something in return for their creative input, they adore it when brands barter with them, and don’t treat them like passive recipients. Asking something of people is a widely recognised psychological trick to create the idea of a pre-existing relationship – strangers don’t normally ask you to do them a favour, so when they do you attribute them status closer to ‘friend’ than brand – they’ve flattered you.

People have opened up to the exchange of ideas and goods, and hosting this on a global scale. Brands were second to the scene here, and so should be able to recognise that their role is facilitator and not leader first and foremost. People start these initiatives to go against traditional consumerism and so brands getting involved can seem counter intuitive. However brands can achieve affiliation with such schemes through genuinely and humanely helping to grow these ideas, putting real people on the ground, listening and providing infrastructure. Nokia did this when they created the mobile platform for Freecycle, allowing people to access the site any time from their pockets. It’s about brands being a part of a network which will exist and grow with or without them – full of creative, highly motivated people.

Brands have long been interested in how they can amass social currency. They can now definitely tap into our ‘in vogue’ desire to hack the system, to build communities around helping each other out and celebrate doing things differently. It’s not about forgetting about the bottom line, it’s about thinking more broadly about how to provide consumers with things they need, in more inventive and collaborative ways.

 

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As Jane Norman fell into administration last June, observers speculated which high street fashion brand would be next.  In recent years, we have been inundated with news stories reflecting the dire state of the high street.  New research from the British Retail Consortium reveals that a tenth of shops stand empty, where high streets across the UK are experiencing significant reductions in footfall. The decline has been attributed to falling consumer confidence, high inflation coupled with minimal pay increases and the general, all-round climate of uncertainty.   

Yet, during the very same period some online-only fashion retailers (OOFRs) have posted incredible results.  ASOS, for example, saw its international sales jump by 160% in the first quarter, while sales at Net-A-Porter in 2010 were up 60% on the previous year.  Could it be that consumers have just changed the way that they shop? 



In a recent report, we analysed seven OOFRs in particular: Net-A-Porter.com, ASOS, ShopStyle, Arcadia’s Style 369, FarFetch.com, eBay and Etsy.  We looked at each retailer’s strengths, recent innovations, (purchasing through Google enabled TVs come to mind), as well as potential challenges on the horizon.

We can confidently say that the future of fashion retail is by no means dead – it’s perhaps just not how you envisioned it.

Exciting times ahead for the OOFR landscape… Take a look at our work here.

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