For a long time, regardless of whether it is used frequently or not, we must buy what we want to use. Having frequently used items, such as refrigerators, or products that may be strange to share, such as toothpaste, is justified. However, for things that are used only occasionally, ownership is not only costly, but it is often the only way to gain access to it. Product approach.

Today, technology has created a brand new online platform and has provided buyers and sellers with a better communication platform. This makes resource sharing unprecedentedly cheap and easy. Consumers can rent cars in less than an hour through Getaround, live in local houses through Airbnb, or use Uber to take someone to another place.

The growth of the sharing economy is very rapid. PricewaterhouseCoopers predicts that by 2025, the five major areas of the shared economy, human resources, finance, automobiles, travel, and music and video playback, will generate annual revenue of 335 billion U.S. dollars, far higher than today's 150. One hundred million U.S. dollars. The Deloitte report shows that the sum of global capital invested in start-ups of the sharing economy in 2015 exceeded 12 billion U.S. dollars, which is more than double the amount of money invested in start-ups in the social media field.

For sellers, the sharing economy turns ownership into revenue, allowing products to be used all the time. People who drive just like commuters can rent cars to other drivers during work hours. For the buyer, the sharing economy provides convenience, value (the purchase of products for short-term use rights is cheaper than buyout of ownership) and a wider range of product and service options. This economic model provides opportunities that can be enjoyed without ownership, which has been widely welcomed among millennial consumers who grew up in economic recession, have awareness of saving, and valued experience more than physical products.

Does the sharing economy model work in the fashion industry?

Apparel and accessories products often have high-priced, low-use properties. Products with such attributes have proven to be very popular in the sharing economy. Professor Arun Sundararajan of the New York University Stern School of Business stated: "It is not uncommon for the price of a piece of clothing to reach three-digit or even four-digit dollars," but these garments are generally worn occasionally only occasionally. According to an online second-hand single ThredUp report, only over $8 billion worth of clothes have been worn in the US wardrobe alone.

Therefore, in the past few years, several fashion companies have entered the field of the sharing economy, and through their own models to try to grasp this huge market opportunity.

Fashion rental service

The leasing model allows consumers to borrow products for a certain period of time, and the leasing cost is often only 10% to 20% of the retail price of the product. The most well-known in the field is the United States-based Rent the Runway. Since its inception in 2009, it now has more than 5.5 million users. In addition, competitors in this field include Girl Meets Dress in the UK, Chic By Choice in Europe, Glam Corner in Australia, and Gwynnie Bee (Big Size Fashion) and Borrow For Your Bump, which focuses more on the market segments. .

“A person buys a suit, a pair of shoes or an evening dress, in order to get a simple, inexpensive way to get the product's function. If you can rent, that person can also enjoy the same function in a short time. Services," said Duke University professor Michael Munger.

With the pay-per-lease model, leasing companies also reduce the cost of products, allowing consumers to enjoy premium brand products that they often cannot afford. Greg Portell, a partner in the retail and media department at AT Kearney, said: "You don't spend $700 on a product that you wear only once or twice. You may, however, spend $100 to rent it once."

With more spending power and choice, and less burden, consumers can constantly update their wardrobes through rental websites, keeping them in sync with the changing trends in fashion. "You can wear the fashion of the moment and you don't need to pay the high cost of making yourself guilty of buying a dress that you wear only once or twice," said Trisha Gregory, co-founder and CEO of Armarium. The fashion rental service based on mobile applications was launched in April this year.

This choice is particularly tempting for consumers in the new millennium and Z era. Many of them frequently upgrade their "styling" from inexpensive, fast fashion retailers. Robin Lewis, CEO of the retail strategy publication "Robin Report," said: "They probably know that quality is not the best, but they also wear a weekend, and quality is not something they care about. It is a one-off," he said. Explained.

“You used to wear a piece of clothing to go to work and then repeat it once again on the weekend to meet friends. Now that you’ve exposed this outfit on Instagram, you’ll need more choices,” Rent the Jennifer Hyman, co-founder and CEO of Runway, told BoF.

However, unlike Airbnb and Getaround, which establish links between the platform and the third party who owns the product, and users can detect assets that they are not using, the fashion leasing company must wholly own and own the products it leases.

Fashion rental services also face more severe logistics problems. "Uber and Airbnb are just software mature. What they have to do is just connect people and then trade each other," Michael Munger said. However, the products involved in the fashion lease are more inconvenient when they are transferred between users. They also need maintenance and care during dry leases, such as dry cleaning and repair. This has brought challenges and additional costs for business operations.

Rent the Runway has made a huge investment in logistics to ensure that products returned to the company in the morning can be handed out again at night. It is also the largest dry-cleaning trader in the United States. It uses a 160,000-square-foot site to dry up 1,500 skirts per hour. Most of the returned products can be returned to the reissuable state within one day.

P2P mutual rental platform

P2P mutual leasing services connect consumers and let them lease products to each other. "The value advantage is very obvious," Sundararajan said. "There are so many things in my closet and it's good to rent some of them."

However, the challenges faced by this model are also very obvious. "The challenge for each P2P platform is whether it can attract enough users to create enough inventory," continued Sundararajan. In the field of fashion, the variety of products and sizes make this difficult to achieve. Rent the Runway buys all the sizes of each product and will deliver two sizes to the user just in case. However, for the mutual rental model, this problem is difficult to solve. "It's very hard for you to rent a skirt for someone who only has one size," Munger said. "The user is not big enough so that P2P is hard to be self-sufficient."

The mutual rental model also considers how to ensure that the product is in good condition during the transfer of the goods. Some companies have incorporated logistics into their services. In the United States, StyleLend, a P2P service provider, requires product owners to send leased products directly to them. The company places its products in its New York office and is responsible for delivery and dry cleaning services. This is similar to traditional leasing companies.

At the same time, Rentez-Vous, headquartered in the United Kingdom, requires users to clean their own products, and must either arrange the delivery of each product or submit it in person. This saves operating costs, but it greatly reduces the consumer's trading experience.

Industry influence

So far, compared to transportation and tourism, the development of the sharing economy in the retail sector is still relatively slow. According to a report published by PricewaterhouseCoopers in 2015, only 2% of the population in the United States participate in the retail sector in the shared economy, and this figure is 6% in tourism and 8% in the area of ​​convergence.

However, some people believe that if the sharing economy grows in the fashion field, it will have a profound impact on the traditional retail industry. Hyman of Rent the Runway expects that especially the fast fashion business will be greatly affected. Consumers will be more inclined to lease high-quality seasonal fashion styles instead of buying cheap counterfeits from high street brands. Consumers will continue to purchase necessary wardrobe items, such as a good-looking jeans or a classic leather jacket, and then select on the rental platform to focus on special occasions and important fashionable items that will only be worn once or twice. She said: "Consumers are becoming more and more savvy about what they want to hold for a long time and what they do not want to live with for a long time."

"Our service will provide them with a capsule wardrobe," Armarium's Gregory said. "They will stand out from the crowd at the cocktail party or leave a good impression on the job interview or appointment."

“Buying is not about losing, it is for lasting use and renting out things when not in use, and keeping the value of the items going for long,” said Neal Gorenflo, co-founder of shareable news and social networking site Shareable.

Although the sharing economy will have a negative impact on retail sales, “it will still help increase economic activity overall,” Sundararajan said. “With leasing and courier services, your spending on clothing actually increases, even if you buy The number of clothes will come down."

The limitations of the sharing economy in the fashion field

"Logistics will be the biggest obstacle to further development," Sundararajan said. Due to different styles and sizes, the fashion market needs enough consumers and enough products to build a healthy sharing economy platform, such as cars and accommodation. In order to catch up with the trend, inventory turnover also has a lot in the fashion field. In the crowded sharing economy, many companies do not have as much money to do this, and this will make fashion companies lose their appeal in front of venture capitalists.

It is much more difficult to convince everyone to share clothes and share than to convince everyone to share cars and accommodation. The latter's rental services have existed for many years. “The attraction of fashion rental is the feeling of putting on a dress for the first time, a novel experience,” explained Munger. He also said that some consumers may feel uncomfortable wearing stranger clothes.

Lewis stated that "People are still more interested in buying clothes. I can't imagine people renting clothes without limit, and forgetting the pleasure of buying clothes."