You’ve probably heard the term “Collaborative Consumption” before, but what does it really mean? Very simply, it’s when we share the things we use. It’s a straightforward idea, but a very important one–it’s changed how we think about ownership. As a result, huge changes are brewing for many businesses today. Let’s look a little further.
Collaborative Consumption is not only a description of how we consume, it’s become an entire business model in its own–and even has an entire community dedicated to tracking the trend. Collaborative Consumption means a shareable economy; it’s a shift that has occurred in business practices that allows for consumers to borrow, rent, or share what other consumers or businesses already own. (Internally here at Third Wave Fashion, we sometimes refer to the concept as “non-ownership”.)
Companies such as AirBnb (for housing), Rent the Runway (for dresses), Bag Borrow or Steal (for handbags and accessories), ZipCar (for cars) and a huge number of peer-to-peer swapping marketplaces (like Buymywardrobe, Bib+Tuck, and Poshmark) are changing the way consumers think about ownership.
Consumers have become more willing to capture value by selling things when their usefulness has run out, or to buy second hand, although no one calls it that. (We’ll call it “gently used.”) We’re perfectly happy to rent any number of items, from wedding dresses (Borrowing Magnolia) to neck ties (FreshNeck.)
This matters to brands because it means that consumers are adopting a “Why buy new when gently used will do?” attitude (especially towards luxury goods), they are also looking to buy new items that retain more of their value over time. Fashion brands: if you’re not tracking and profiting from your archive, there’s probably a superfan out there that is.
The trend of collaborative consumption leans on a number of other factors. The top three factors supporting this trend, as we see it, are the contracted economy, environmentalism, and the rise of social living. Consumers are more careful about how they spend their money, they care about not creating needless waste, and they don’t mind sharing. These macro trends make collaborative consumption a definite model to watch.
Bonus: For a more in-depth look at the rise of collaborative consumption, watch this video from TEDxSydney.
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