“Access over ownership certainly has long-term growth potential, but significant momentum and mainstream acceptance will partly depend on the ability of high profile brands to develop relevant, convenient, ongoing services.” Pippa Goodman of the Future Foundation (Theguardian.com, October 20, 2014)


Description

Considering that Millennial consumers are particularly cost-conscious post- recession, they are showing particularly resourceful behaviors in their approach to consumption. Control and thrift strategies have come to the fore as people try to protect their lifestyles in the short term.

The planet’s resources are getting scarce, product lifespans are shortening, objects are rarely used – some 80% of items in UK and US homes are used less than once a month, and self storage is now a $24bn industry in the U.S. People are seeking greater value from products and services.

Consumers are also getting creative in order to find smart solutions that allow them to maintain the same level of consumption. Driven by better awareness that the planet’s resources are getting scarce, product lifespans are shortening, objects are rarely used – some 80% of items in UK and US homes are used less than once a month, and self storage is now a $24bn industry in the U.S. People are seeking greater value from products and services. As a result, they are favoring access to products over ownership. Access and usage are gaining more value in the eyes of these savvy consumers, who are increasingly turning to disruptive models as a way to shop smarter. Aided by the proliferation of online and mobile portals, consumers are trading in and trading up a variety of pre-used, pre-owned goods and offerings in many sectors.

Circular consumption

The Web has enabled alternative consumption services to proliferate. Rental services first gained momentum with luxury items and cars as a smart way to access goods and services for a fraction of the cost. Also, many have been turning to used and recycled merchandise as an alternative to new, more expensive goods. For those who want to clean out their home or their closet and get something in return, eBay and Leboncoin have paved the way for second-hand marketplaces that have made it increasingly easy to buy and sell pre-used goods online. The second-hand luxury market is booming, with a worth of about 3 billion € worldwide — $15 billion if watches and jewelry are included. The stigma attached to second-hand items is disappearing as consumers develop a greater appreciation for the value of well-made older products.

The second-hand luxury market is booming with a worth of about 3 billion € worldwide and $15 billion if watches and jewelry are included.

What’s more, consumers can barter clothing and goods on dedicated platforms or exchange their skills using a time-based currency via timebanking methods. All these new solutions are ways for people to keep their money in their pockets while still enjoying their favorite brands and maintaining their quality of life.

Trading off

Since consumers don’t want to compromise on the quality of experiences in their lives, they are questioning and reassessing what is essential to their happiness and are also exploring cheaper alternatives that could compensate expenses on costly items. In difficult economic times, choice and budget reallocation appears to be the unique solution.

64% of consumers in developed economies are trading down in key categories so they can save money to spend elsewhere (BCG.com, October 2013).

Consumers are boldly rethinking the entire consumption model to see what they can do better on and what they can do without. They are ready to make sacrifices to get what they really want. 64% of consumers in developed economies are trading down in key categories so they can save money to spend elsewhere (BCG.com, October 2013). Indeed, they are raising some expenditure items to the top, cutting out some entirely and swapping others for cheaper alternatives. For instance, common trade-offs include friends living together to split the costs of rent; families choosing food courts instead of fancy restaurants to eat; nights in front of the internet instead of going out to watch movies; and skipping daily pleasures to afford big events like trips, parties, weddings, etc.

Featured examples

 

My Happy Dressing

Credit: myhappydressing.net

Credit: myhappydressing.net

Taking after the breed of online clothing marketplaces such as Videdressing and Vestiairecollective, a new concept is emerging in France: My Happy Dressing. More than just selling second-hand clothing, events are held on weekends in spacious places in the heart of the capital, where both male and female consumers can come and shop in a friendly atmosphere while enjoying services such as young designer fashion shows, customization workshops, live DJs, photography exhibitions, detox bars, organic food trucks, etc.
France France, August 2014

 

Troc Vestiaire & Pretachanger

Credit: Troc Vestiaire’s Facebook page

Credit: Troc Vestiaire’s Facebook page

French online platforms Trocvestiaire and Pretachanger are dedicated to bartering clothes and accessories. The former has 12,000 members and there have been more than 10,000 trades since the launch. For the latter, around 100,000 products have been featured on the platform. At the start there were only women’s clothing, but the offer has extended to men & children’s fashion as well as childcare items. The idea is to barter a 100€ dress against 100€ dress, in order to neither to waste unworn clothes nor money.
France France, December 2013

 

Bib + Tuck

Credit: BibandTuck’s Facebook page

New York-based startup Bib + Tuck is a marketplace where real money is secondary to participation. With its edgy images and cheeky language (“Don’t tuck with us”), the site serves as an exchange hub: members upload images of items they’re willing to part with and designate a number of Bib + Tuck bucks that they’d be willing to accept from other members in exchange. In this way, items and their corresponding assignations of bucks pass from member to member, with no real money changing hands. But it’s open only to the member community, which includes bloggers, stylists, designers and celebrities, as well as ordinary folks who exhibit style savviness.
United States of America United States, January 2013

 

Audi Unite

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Automotive brand Audi is redefining the concept of car sharing with ‘Audi Unite’ in Stockholm. The service lets up to four individuals literally “share” a car for up to two years, using an app to manage access. The list of available cars includes virtually every Audi model, from the tiny A1 hatchback to the Q7 SUV, and even the R8 supercar. Just like a rental, insurance and maintenance are bundled into the monthly fee each driver pays, which can be divided among group members evenly or based on how much each person drives. A “personalized fuel card” allows drivers to add fuel costs to that monthly bill as well.
Sweden Sweden, December 2014

 

Wallapop

Credit: Wallapop’s Facebook page

Credit: Wallapop’s Facebook page

Wallapop, may be the next “Leboncoin”. Created in Spain, the service rapidly crossed borders and is now available in France. Wallapop is a free mobile virtual flea market community that allows anyone to buy and sell second hand products. Buyers are able to get in touch directly with the seller, and even meet them to see the item before buying it. But the real draw is how convenient it is: everything for sale is sorted by how close it is to the buyer’s location, so there is no shipping cost. Besides, the product catalog is quite large and varied, with categories ranging from bicycles to furniture and clothing to mobile phones.
Spain Spain, October 2013

 

Armario Compartilhado

Credit:  Armario Compartilhado’s Facebook page

Credit: Armario Compartilhado’s Facebook page

Consumers who have clothes that they use only occasionally or that don’t currently fit can rent them out via Armário Compartilhado. The website rents out clothes against an escrow check as a guarantee that they will be returned to the owner in good condition.
Brazil Brazil, August 2013

 

Quintal de Trocas

quintaldetrocas

Credit: Quintaldetrocas.com.br

Trading platforms are no longer the reserve of fashion clothing as they go to niche segments. The website Quintal de Trocas specializes in trading toys, books and puzzles for children. Set up by a team of professionals, including psychologists, journalists, artists and artisans, the exchange site mainly accepts educational items. The aim is sustainable sharing through trading, giving and recycling. It also provides a platform to meet new people and make friends.
Brazil Brazil, July 2014

 

DaruDar

DaruDar’s Facebook page

DaruDar’s Facebook page

Moscow site Bazaar emphasizes the advantage of free exchange for savvy-minded consumers. Similarly, the Deneg Net (No Money) group in Nizhny Novgorod created a page on the Vkontakte network for urbanites that have tight budgets and can benefit from barter and “disinterested aid”. Free Market communities launched in many Russian cities organize live events for exchanging jewelry, clothes, books, etc., as an alternative to excessive consumption. Vintage earrings, food, computer monitors and cotton candy makers can be found on the DaruDar (“gift to gift”) website, uniting those who believe in the simple joy of giving.
Russia Russia, June 2013

Business & Marketing guidelines

1

Even if price isn’t negotiable, amplify added value or extra offerings. Emphasize how your brand is not only a must-have, but why it’s a better value than other must-haves.

2

Empower your floor sales staff to haggle with shoppers. Making haggling safe = loyal (and pleasantly surprised) customers.

3

Focus on quality, as this is a main consumer driver — along with those of utility, reliability, durability and convenience.

4

Provide choice and flexibility in your offers, as consumers appreciate being able to compare, select extra options, change their minds, etc.

5

Rethink competition outside your sector. Automotive companies may be competing for a share of wallets not only with other automotive companies, but also with travel providers, or with the Olympics, and so on. In this new paradigm, brands must think outside of their product’s category or function and identify what its actual consumers’ benefit is.

Summary

  • The majority of consumers are embracing a range of unusual buying behaviors that will help them stretch a dollar further. From borrowing to renting to reusing to recycling, consumers are adopting a whole new range of strategies — and values — to maintain the consumption of their favorite brands and products.
  • Consumers are becoming users. Instead of ownership, people are favoring usage, the functionality of goods as a way to save money, reduce the environmental impact and waste.
  • Consumers are questioning and reassessing the budget they allocate to their consumption and exploring cheaper alternatives that don’t diminish their overall quality of life. They are thinking about what they can do better on and what they can do without.
  • 64% of consumers in developed economies are trading down in key categories so they can save money to spend elsewhere (BCG.com, October 2013)

Experts that we recommend

olivier-aizac Olivier Aizac
Founder of French second-hand marketplace Leboncoin
gaetan-bourdin Gaëtan Bourdin
Director of French non-profit organization Les Badauds Associés
noah-ready-campbell Noah Ready-Campbell
Co-founder of US Fashion second-hand marketplace Twice
philippe-moati Philippe Moati
Consumption and retail researcher & author of book La nouvelle révolution commerciale (Odile Jacob, 2011)