Why fashion brands can't ignore the sharing economy
Brands today are learning a lesson familiar to most preschoolers: if you want people to come play, you've gotta share. The $26B sharing economy has taken off, driven by a cycle of consumer demands for better price and convenience, a society that's more connected and experimental, and startups creating platforms for sharing everything from parking spaces to power tools. As more and more of us are getting physical goods and services from each other rather than buying them, where does that leave brands?
You either compete with market trends or create with them. Do nothing, and you fall into the former, which is exactly where most fashion brands are when it comes to the sharing economy. But they shouldn't be, and here's why:
It's your best consumers. There are some 80 million sharers in the US, and growing rapidly. If the number isn't persuasive enough, try the demographics: sharers tend to be 18 to 34 years old, heavily active on social media, and *affluent*. That's most fashion brand's target consumer, to a T.
It's wide open (for now). Goods are among the sharing economy's hottest items, with 46% of consumers projected to be sharers of pre-owned goods by the end of 2014. But while demand is there, brands are not. A lot of success in today's rapidly-evolving market is about getting there early. We know this is happening, so why wait for the uphill battle?
Your brand is there, even if you're not. A quick search of "Louis Vuitton" on eBay returns 37,000 product matches. Tibi's 3,000 matches shows nascent labels are no exception. As brands learned with social media two years ago, opting out isn't an option. To be in control of your own image, you have to get active.
So what should a brand's role be? The short answer: it needs to be driven by your consumer. What core values of your brand or product can be amplified by sharing? (Pro tip: start by looking at how consumers are already sharing your brand.) A few shapes that could take:
Marketing to sharers, by partnering with sharing providers like Vaunte, Rent the Runway, Uber or AirBnB to provide branded products and experiences.
Directly facilitate sharing, by adding a "Pre-Owned" section to e-commerce, which could be 'powered by' a sharing marketplace like The RealReal, or by hosting swap parties.
Supporting sharing, by providing authenticity validation services, or imagery archives from past seasons.
Remember, sharers are sharing because they want to (emotionally) and not because they have to (financially). Cater to why, and you'll be well-positioned in what's quickly becoming the next major brand channel.