Sharing economy for your wardrobe
I think it is safe to say that the sharing economy is here to stay. But only a decade ago, the idea of sharing your things with strangers was ridiculous and technologically impractical.
Today we have tech platforms disrupting almost every industry from transportation with ride-hailing giants Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT), to accommodations by Airbnb (NASDAQ: ABNB), peer to peer loans from Lending Club (NASDAQ: LC), and handyman services via TaskRabbit.
In the last few years founders have been trying to disrupt the fashion industry creating apps and websites with communities that swap, rent and sell clothing.
Supporters of these upstarts argue that challenging fast fashion players like H&M (BATS EU: HMB) and Zara, owned by Inditex (BATS EU: ITX), benefits the environment. By Rotation, a British peer to peer (P2P) rental and sharing community for lightly used clothes presents statistics on their website to bolster this claim: 114 billion items of clothing were sold in 2019, 70% of clothing items end up in landfills and 8% of global greenhouse gas emissions come from the apparel and footwear industry.
Tulerie in the US has a similar P2P rental platform. They vet potential community members via video calls to ensure proper fit.
It could be that from an ecological perspective, it makes sense to share and reuse clothes but from a business perspective, it begs the question if enough people really feel comfortable wearing other people’s clothes.
Environmental critics may argue that those saved emissions from not buying clothes are made up for in the shipping required to send the clothes back and forth from the owner to the renter and back. Another critique of the business model is that these platforms are taking large commissions of up to a quarter of the price of the item, which puts off potential users.
Another alternative to sharing or renting is selling your old clothes. And while it avoids the creation of new clothing, it also takes away from the donation of slightly used clothing to charities and the needy.
Companies like Vestiaire in Paris, owned by Kering SA (BATS EU: KER), and Vinted and Poshmark (NASDAQ: POSH) in the UK facilitate this second hand clothes market. But, again, fees are pretty high and shipping clothes over long distances also creates secondary emissions from their transport.
Only time will tell if the sharing economy for clothing will take off and if these businesses will become the unicorns of tomorrow. If the fees are just right and users become accustomed to the idea of wearing someone else’s clothes, whether for the weekend or forever, then I see a bright future.
Who knows, maybe one day you will upload your wardrobe to the metaverse so virtual strangers can don their headsets and pick through items to rent or buy, with their digital avatar trying them on for size.