There’s no denying that sharing is the new way of life. Share your car (Snappcar), share your home (Airbnb), share your goods (Peerby) – the sky’s the limit. Technological development has helped us creating peer-to-peer platforms to connect users and owners. This has made sharing resources easier and more accessible than ever before. Pricewaterhouse Coopers predicts that, by 2025, the five key sectors of the sharing economy (staffing, finance, car sharing, travel and music and video streaming) could generate $335 billion in annual revenue, up from about $15 billion in 2016. For owners, these sharing platforms have given them the ability to turn possessions into actual revenue. For users, sharing platforms have increased convenience and often at a lower price than traditional channels.
There’s one large industry that has yet to benefit from this trend of sharing – the fashion industry. How many items seem to just collect dust in your closet? Did you buy an expensive dress that you can only wear on special occasions? Or a beautiful suit you might wear twice a year? Or maybe you don’t have a suit because you only need one once every so often. Wouldn’t it be great if there was a platform where you can temporarily rent out your suit to someone who needs it? Would this work? Let’s examine.
Like many other types of goods, clothes and accessories are often characterized by having high value but low usage. This makes them seem ideal for sharing. However, sharing clothing does not seem as simple as sharing other products, as transportation and maintenance (e.g. dry-cleaning) create significant operational and financial challenges. Another problem is in regard to cross-side network effects. Every sharing platform faces the challenge of getting enough people to their platform. However, in fashion, a wide range of product sizes and styles is crucial and incredibly hard to achieve. It can be close to impossible to find a dress that is both your size and fits your style.
With these challenges, the fashion sharing economy has not really been flourishing, especially compared to other sectors. According to a 2015 report by PwC, just 2% of the US population have engaged in a sharing transaction in the retail sector, compared to 6% for hospitality and 8% for transport.
However, there are companies that are taking the plunge. In the United States, the platform StyleLend requires owners to send in items they wish to rent out. The company itself handles delivery and dry-cleaning, to ensure items stay in great condition. It is likely that, in the future, sharing clothing will become more popular. On the other hand, wearing a new item for the very first time is, in my opinion, a feeling that’s hard to beat.
Sources:
https://www.businessoffashion.com/articles/fashion-tech/will-the-sharing-economy-work-for-fashion-rent-the-runway-rental
Interesting article & post Willemijn!
Nevertheless, I see two main issues concerning especially fashion sharing:
1) Rating: Platforms such as Airbnb profit from user ratings, meaning the more user rented a certain space, the more testimonials each accommodation receives which in consequence attracts new customers. In fashion, I could imagine the opposite effect: the more people actually wear the item of clothing, the less attractive it gets (e.g., because the item wears out, was dry cleaned too often, etc.).
2) Wrong Customer & Industry Mindset: According to Statista, the overall revenue for the European clothes market is expected to grow by 2% annually over the next years. Especially, the fashion e-commerce is highly competitive with established players such as Inditex, Zalando, ASOS and amazon fashion and newly emerging firms such as aboutyou. Personally, I think that consumers prefer to buy low/mid quality products cheaply instead of “investing” in qualitative products. Consequently, the firms mentioned above strive to increase revenues by providing those products and customers prefer these ones over (sustainable) qualitative products.
Nevertheless, I see a market possibility for extremely high priced and qualitative items in a specific niche market (such as wedding dresses you mentioned in your article). Given the one-time usage and the high purchase price, I definitely see the opportunity for a sharing model there. Hopefully, the firms mentioned above do change the consumer’s mindset to buy cheap low-quality wedding dresses in the future.
Sources:
https://www.statista.com/outlook/90000000/102/clothes/europe#
Hi Willemijn,
I agree with you on how wearing something for the first time is a feeling that’s hard to beat.
However, in other countries it is very normal to rent a dress or a tax for a wedding, for instance. In Morocco it is very normal for a bride to rent her wedding dress, the retailers who rent out these dresses are often very successful too. This concept has even expanded to The Netherlands, where Moroccan brides and wedding guests often rent their dresses. What the owners of these dresses usually do after the dresses become old, is sell them for a very low price. Usually 25% of the original price. Also, in the US it is very common to rent a tux and matching shoes.
Furthermore, not only clothing for special occasions is there is this online clothing library that seems to be very succesful too. It is called Lena-library and its a dutch company with over 300 subscribers, at first they only serviced those in Amsterdam. But it has become so popular that they expanded their services to the rest of Holland. So it seems that it might have potential after all…
Sources:
https://marketingfuel.nl/kledingbibliotheek-lena-gaat-landelijk-met-online-leensysteem/
http://www.lena-library.com/
https://www.weddingwonderland.nl/trouwjurken/trouwjurk-huren/