Here to Stay: The Sharing Economy as a Consumer Trend
By Cindy Chen*
*This article was written by Cindy Chen, and selected as the winning essay for the Rank-it.ca College Scholarship 2022. Chen is a Master of Arts, Quantitative Methods in the Social Sciences at Columbia University.
The rise of the sharing economy upturned the hospitality and rideshare industries, forcing industry incumbents to adapt to a competitive landscape that they were once dominant in shaping. Now, the sharing phenomenon has its sights set on disrupting consumer products, especially fashion and home goods, through digital rental and resale platforms. Much of this shift is fueled by younger shoppers who value sustainability and actively shop at used apparel shops. According to analytics firm GlobalData, more than one in three Gen Z customers plan to purchase secondhand clothes this year, a stark contrast to the statistic that only one in five Baby Boomers plans to do so. Likewise, GlobalData found that nearly 75% of shoppers aged 18 to 29-year-old prefer sustainability-conscious brands. Amid growing concerns over climate change, I believe that the sharing economy as a consumer trend is a resilient trend and will only gain further momentum in the future.
Digital pioneers in the fashion resale and rental space are reaping the rewards of climbing demand for clothing rental and reselling: Rent the Runway has flourished in the business of renting fashion-forward clothes and accessories for a decade, and digital resale platforms like The RealReal enjoy customer bases with significant shares of the coveted Millennial and Gen Z demographics. Rent the Runway CEO Jennifer Hyman believes that rental will occupy 10% of the $2 trillion fashion market in 10 years. Meanwhile, GlobalData predicts that secondhand merchandise will outsell fast fashion within a decade. Although lockdown orders due to the pandemic have posed a hiccup to retail growth, sustainability remains a cause that consumers value and for which consumers will gladly pay a premium. Product rental and resale are a prominent aspect of the sustainability movement and will likely grow in popularity once the threat of Covid-19 convincingly recedes and life soon returns to a greater sense of normalcy.
Prominent retailers in fast fashion and home goods are already entering this space: H&M announced plans to pilot a “pre-loved pieces” resale program through its “& Other Stories” brand, while Ikea announced plans to offer furniture rentals. As more prominent companies announce their commitment and plans to operate more sustainably, especially as it relates to resale and rentals, it will invite others to join in, thus achieving critical mass in the movement and making the sharing economy more ubiquitous. Another appealing aspect of the sharing economy, its enablement of mass participation and entrepreneurship, will also allow the sharing economy to proliferate as a consumer trend. Since anyone can actively sell, buy, and trade merchandise on a wide variety of resale platforms such as Facebook Marketplace, Poshmark, and Depop, it empowers people to participate beyond a transactional role of a “consumer.” In becoming a “seller,” people are more likely to continuously engage in the sharing economy.
Overall, I am confident that the environmentally-friendly trend of reselling and renting consumer goods, aptly named “the sharing economy,” is a trend with staying power.
References
Lacy, l. (2019). How Sustainability is Changing the Way Consumers Get Dressed. Ad Week. https://www.adweek.com/digital/how-sustainability-is-changing-the-way-consumers-get-dressed/
Kapner, S. (2019). The Rise of Hand-Me-Down Inc. Washington Post. https://www.wsj.com/articles/the-rise-of-hand-me-down-inc-11565947804?mod=e2tw
Thred Up. (2021). 2020 Resale Report. Thred Up. https://www.thredup.com/resale
