In a much-anticipated move in early October, the city of San Francisco passed a series of new regulations governing the activities of home-sharing site Airbnb, making one of the most popular examples of the “sharing economy” legal.
The new law, which goes into effect in February, has such a light touch that Airbnb’s competitors, including traditional hotels and motels and the vacation-rental site HomeAway, weren’t all that happy.
But it is seen as a win for the sharing economy because it sanctions Airbnb’s model of ordinary people staying with other ordinary people, instead of trying to find room in a hotel for much more money.
Many people these days, many of them millennials, don't seem to value ownership as highly as their parents do. Bikes, driveways, cars — even clothes and accessories — are often seen as something to share, barter for, or rent rather than own.
This attitude is being furthered by technology and entrepreneurs willing to assist in its execution. What does that mean for retail?
Nothing new here
The sharing economy is nothing new, of course. There have always been plenty of things — taxis, housing, even canoes — that you pay to use on a temporary basis. But this disruption-happy era has helped fuel ideas of how to expand the concept. And many millennials, strapped for cash and thinking creatively about how to save money, have realized there are some things not worth owning.
Not just for taxis anymore
It’s been customary for some women to save their wedding dresses, perhaps in hopes that one day a child or grandchild would take a turn in it. But these days — perhaps due to the divorce rate, changing styles, maybe a downturn in sentimentality or tradition — it’s increasingly common for women to unload their wedding dresses onto to marketplaces like eBay or to rental sites.
“We have a section on the site for wedding attire,” Tracy DiNunzio CEO and founder of clothing swap site Tradesy told The New York Times. “We have seen three brides wear the same dress.”
Of course, consignment shops and second-hand clothing stores are nothing new. But the web and mobile apps help make shopping for used items especially convenient for people on both sides of the transaction, with huge selections, Pinterest-quality visuals, and easy-peasy ordering and shipping logistics.
Actually, anything
These days, actually, you can share pretty anything. Through sites like Pets to Share, pet owners can find people who want to hang out with their cat or dog at prices much lower than doggie daycare or dog-walking services. Like Airbnb, Pets to Share receives money from the owners and the renters, and everyone’s happy.
Cameras, power tools, musical instruments, KitchenAid mixers … if you can own it, you can share it or rent it. Through TaskRabbit, you can even get someone to come over and put together your Ikea furniture.
Who’s sharing
The conventional wisdom is that millennials are the sole participants in all aspects of the collaborative economy. Indeed, a recent study by the brand association Crowd Companies and cloud platform provider Vision Critical found that half are between 18 and 34 years old. Research for the report, Sharing is the New Buying, included a survey of more than 90,000 people in the United States and United Kingdom. Some 75% use social media and most live in urban areas.
But the study also found that people are using sharing services for reasons of convenience and finances, and not just an overwhelming sense of social responsibility or concern for sustainability, as many believe.
What brands can do
This attitude toward maximizing value in what you own or renting objects you can’t afford, can’t store, or simply would rather not own, is difficult for retailers, always striving for sales growth, to grasp. There are ways for brands to participate, but it may take a fresh perspective.
Patagonia, for example, has taken its Common Threads Partnership campaign, where it touts its sustainable manufacturing methods and repair options, to eBay. Of course, many people sell used clothing on eBay, but by having a separate storefront on the site, Patagonia depicts the act of unloading unwanted clothing as one of recycling and sharing. At the same time, the company is able to emphasize how well-made and long-lasting its products are.
That was exactly the opposite, by the way, of Lululemon’s reaction earlier this year when it discovered that customers — many of them its biggest fans — were selling their yoga gear on marketplaces like eBay.
Customers who missed the strict 14-day window for returns and tried to re-coup their investment by selling unwanted items on re-sale sites found themselves blocked from buying from the Lululemon website. The retailer said it needed to be in charge of selling its own goods, in order to appropriately educate and interact with its customers. (Days later, no surprise, Lululemon relented.)
There are many ways for brands to connect with the sharing economy. Retailers have partnered with Uber, TaskRabbit, and other sharing-oriented startups. Wal-Mart Stores Inc. offers shoppers the opportunity to trade with each other in its used videogame business. And while many car companies are petrified that sharing cars means no more buying cars, French company Peugeot is establishing a ride-sharing service.
“If you have a candle,” as Aerosmith frontman Steven Tyler says, “the light won't glow any dimmer if I light yours off of mine.”