Retailing already brings its share of challenges, and now there’s a new consumer movement afoot that advocates borrowing over buying, renting over owning, and buying used whenever possible if owning is necessary.

The trend goes by various names – “collaborative consumption,” the “sharing economy,” the “rental economy,” and “sustainable shopping,” to name a few. But whatever the moniker, the practice reflects a changing consumer attitude toward buying and owning.

No Desire to Acquire

The movement is part of a broader cultural shift toward a more circular economy aimed at reducing waste and carbon emissions by sharing or renting items that are used infrequently, and repurposing, refurbishing, repairing, and recycling products to keep them in use and out of a landfill longer. Supporters say the practice is a superior and more sustainable alternative to the prevailing “take-make-use-dispose” consumption patterns.

This no-desire-to-acquire philosophy dovetails with several other burgeoning consumer trends. One is a growing preference for experiences over “stuff,” in which consumers say they would rather spend money on travel, events, classes, or personal indulgences such as facials or massages, than on material goods.

A simultaneous decluttering movement, popularized by organizing expert Marie Kondo’s books and the Netflix series “Tidying Up with Marie Kondo,” has inspired countless people to get rid of clothing and other household items that “don’t spark joy,” and to buy only products they love, need, and use frequently.

In that same vein, interest in fast-fashion, fast-furnishings, and other single-use or short-lived products is waning. Instead, people are consuming more consciously by supporting companies with sustainable production practices, and buying products that are longer-lasting and higher-quality.

Today’s consumers are also much more open to buying secondhand. A 2019 study from daVinci Payments finds 52% of females have recently purchased used clothes and accessories, 23% purchased secondhand furniture, and 20% purchased used appliances. According to “eMarketer Retail,” there is actually a cachet associated with sustainable shopping; buying used is something to brag about.

Finally, many consumers just don’t have room for a lot of stuff. Young Millennials living in Mom’s basement, or sharing cramped apartments with roommates, don’t have the need or room for many household items. House-hunting older Millennials prefer smaller homes that emphasize outdoor living spaces over storage closets. Even downsizing Baby Boomers are reprioritizing possessions, and jettisoning stuff that won’t fit in their smaller digs.

As a result, all generations are becoming more mindful consumers. According to online news outlet “Vice.com,” shoppers are deciding to simply buy fewer things. It predicts, “Rental and secondhand (shopping) will capture more of the consumer spend away from traditional retail.”

Real-World Retail Impact

Indeed, from cars to condos to camping gear, collaborative consumption has penetrated nearly every industry and is impacting retail sales. Ride-share services such as Uber and Lyft, two of the most widely known and frequently used examples of the sharing economy, have contributed to the decline in the number of teens getting driver’s licenses and delayed the purchase of a first car. The Public Broadcasting Service (PBS) reports the number of high school seniors who have a driver’s license dropped from nearly 89% in 1996 to 71% in 2015.

Members of car-sharing service Zipcar can borrow a vehicle on-demand through an app, use their Zipcar card to unlock it, and then return it to a designated parking spot when done. The company estimates that by 2025, 10% of the U.S. population is expected to adopt car-sharing as their primary means of transportation. It notes that every Zipcar in use removes 13 personally owned vehicles from the road. That’s good news, unless you sell cars.

Shared transportation services are expected to grow as consumers move to walkable communities and work from home more frequently. Though suburban and rural residents are unlikely to give up their vehicles completely, ride- and car-share services lessen the need for households to own multiple cars, especially when the vehicles spend 90% of the day in the driveway, garage, or parking lot. For people who already own a car that mostly sits idle, a new peer-to-peer car-sharing platform called Getaround, allows individuals to rent their personal vehicles to others. The site estimates it has five million users and 20,000 cars registered in its system.

Peer-to-peer housing-rental platforms such as Airbnb, Vacation Rental by Owner (VRBO), and HomeExchange allow someone to temporarily rent out all or part of their home to travelers. Nesterly facilitates intergenerational, long-term room rentals, often with reduced rent in exchange for helping with household chores. Despite pushback in some communities, these businesses are booming – Airbnb is valued at $35 billion ahead of its impending IPO – and impacting hotel and hospitality industries.

Co-working spaces such as WeWork, Instant Offices, and Spaces, rent shared work stations, conference rooms, office services, and amenities on a daily, weekly, or monthly basis, eliminating the need for a costly permanent office for start-ups, small businesses, freelancers, and entrepreneurs.

Even large, blue-chip corporations are adopting a “less is more” mindset and scaling back the amount of office space they occupy. Companies are calculating average daily attendance to determine how many desks are in use each day; for many companies, the daily peak census may only be 75% of the total number of employees, due to absences for business travel, illness, and vacation. In an effort to cut costs, energy use, and emissions created by outfitting, heating, cooling, and maintaining underutilized floor space, many companies are downsizing their corporate footprint.

Rather than assigning each employee a permanent desk, they are designating department “neighborhoods” within the building, and having workers take any available workstation. That makes sense, but it also translates to reduced sales of office furniture and equipment.

Many communities now have bike-sharing services, lending libraries for tools and musical instruments, and “makerspaces” where people can share equipment such as 3-D printers, sewing machines, and filmmaking gear. Through RVshare, people can rent others’ motorhomes and campers.

Clothing Industry Case History

The clothing industry has been significantly impacted by the sharing economy. Peer-to-peer online consignment marketplaces such as Poshmark and The RealReal allow consumers to buy and sell their used clothing directly to others. Rent the Runway provides an opportunity to rent an outfit for a special occasion and return it afterward. (Why own something that likely wouldn’t get worn again?) Clothing subscription programs allow women to practice wardrobe “rotation over accumulation,” something that’s particularly appealing to career women who can access an ever-changing supply of work clothes at a fraction of the retail cost.

Initially embraced by Millennials and Gen Z, the concept is now being adopted across all generations. According to the 2019 Resale Report by online thrift store thredUP, 45% of women bought a secondhand clothing item in 2016; by 2018, 64% of women had done so. The study estimates secondhand clothing sales will double to $51 billion over the next five years, with more than 70% of those purchases shifted from traditional retail sales.

The finding is causing already struggling clothing retailers to sit up and take notice: 87% say they plan to test resale programs, 61% will offer rentals, and 52% will adopt refurbishment programs in the near future.

Macy’s and JCPenney have partnered with thredUP; Lord & Taylor was recently acquired by clothing subscription company Le Tote; and Bloomingdale’s just launched its own monthly subscription rental service. Anthropologie, Urban Outfitters, and Free People clothing brands are now available to borrow through Nuuly.

Even luxury brands targeted to Baby Boomers are getting in on the action. Burberry has teamed with the secondhand consignment platform The RealReal, and high-end fashion house Eileen Fisher recently launched Renew, a site to sell the label’s gently used garments.

Nike has implemented a kids’ shoe subscription service in which members get a new pair of shoes every three months to keep up with growing feet. The returned used shoes are either donated or upcycled. The RealReal and Kidizen have created resale marketplaces for kids’ clothes and gear. According to YPulse, the market for secondhand kids’ clothes will continue to increase as Millennials and Gen Z start families.

Patagonia sells used clothing and gear, provides free repairs, and offers a “Worn Wear” program that accepts trade-ins of its branded items for credits toward the purchase of new or used merchandise. The company’s goal: “to extend the life of gear, cut down on consumption and get more use out of stuff we already own.” It estimates that keeping clothing in use just nine extra months can reduce related carbon, water, and waste footprints between 20% and 30%.

Recreational Equipment Inc. (REI) offers an extensive selection of used clothing and equipment for outdoor enthusiasts, as well as a rental program for everything from camping tents and car racks to snowboards and paddle boards. Its “re-commerce” program has been so successful, the retailer doubled the number of locations offering it to 85 in 2018, and expanded to 115 locations last year. According to its website, REI aims “to engage in a circular economy and reduce waste,” while “helping more people get outdoors and keeping useful stuff out of the landfills.” It’s estimated that 26 billion pounds of clothing ends up in landfills each year.

On the Homefront

The tentacles of the sharing economy are stretching into the home and onto the patio. As the number of residential townhome and apartment communities increase, residents are growing comfortable sharing amenities such as fitness centers, outdoor kitchens, and rooftop lounges that preclude the need to buy a treadmill, grill, or patio furniture for personal use.

Furniture retailer West Elm now rents coordinated bundles of home accessories such as decorative pillows, throws, and bedding sets, and IKEA plans to roll out a furniture subscription service next year. Subscribers to home-furnishings rental startups Feather and Fernish can swap pieces of quality furniture in and out of their homes, including a limited selection of outdoor furniture, such as teak dining tables and chairs, chaise lounges, side tables, and deep-seating all-weather wicker groupings.

These companies provide an affordable way to access good design, and offer a sustainable alternative to cheaply made, self-assembled “fast furniture.” Because they deliver and pick up, the companies eliminate the hassle and expense of moving furniture when changing apartments. Renting is also a good way to try out a piece of furniture before committing to owning; should the renter love it, there’s an option to buy, with previous rental payments going toward the purchase price.

Pool-sharing service Swimply connects homeowners with underutilized swimming pools and outdoor living spaces, and those wishing to enjoy a backyard resort. The online platform lists hundreds of backyard environments with amenities such as in-ground pools, hot tubs, outdoor kitchens, bar islands, outdoor refrigerators, fire pits, pergolas, comfortable furnishings, and more, at hourly rental rates from about $50 to $500.

More specialty retailers are testing secondhand shopping and rental programs. Jono Ace Hardware in Jonestown, Pennsylvania, rents Traeger pellet grills, flattop griddle grills, party-sized charcoal grills, and hog roasters. The store uses its demo units for rentals, according to retailer Loretta Ollar. She says the rental program has been successful and often leads to sales of pellet grills and griddle grills after customers try them at home.

Ruff with a used Egg.

Stephen “Ruff” Ruffati, owner of Ruff’s Barbeque Shoppe, tested renting pellet grills in his Golden, Colorado, store one summer, but found it to be more trouble than it was worth. “People don’t really know how to use a pellet grill, so between the labor and the clean-up, it wasn’t always a successful experience,” he says.

However, the retailer says offering pre-owned pellet grills, kamados, and smokers for sale in the store has been a home run. “There is definitely a market for used grills for the same reasons car dealers sell used cars,” he explains. “People want to upgrade to a new car and trade in their old car. It’s the same with grills; there are so many new models introduced and people want the latest shiny new object. In addition, some people can only afford to buy a used car. Others want to own a luxury-make car, but can’t or don’t want to spend the money on a new one. These are the same reasons someone would buy a quality, used grill.”

Ruffati accepts trade-ins only on brands he carries (Big Green Egg, Traeger, Green Mountain Grills, Horizon Smokers), whether the customer originally bought the grill from him or not. The amount of credit he offers on a trade-in depends on several factors, including the condition of the trade-in grill and the price of the new grill the customer plans to purchase.

Ruffati says pre-owned grills sell quickly in his store; he estimates moving 10 to 20 used grills a year. “We don’t get too many because people usually pass them down to their kids, or sell them on their own to a neighbor or co-worker, or through Facebook or Craigslist,” he says.

“But having the option to trade in a grill leads to sales. A lot of retailers look at a sale as the end of a relationship, but we look at it as the start. Many people who buy a used grill actually barbecue a lot; they just don’t have the funds to buy new. But just like someone who buys a new grill, they keep coming back for charcoal, rubs, accessories, wood, sauces, and spices.”

Premium charcoal grill manufacturer Hasty-Bake accepts trade-ins year-round at its Tulsa, Oklahoma, headquarters store, in return for a 20% discount on the purchase of a new Hasty-Bake grill; the trade-in allowance bumps to 25% during its special January trade-in event. The company store also hosts an annual three-day “Scratch and Dent Sale” with savings up to 40% off.

Kitchen Window, a Minneapolis-based retailer of indoor and outdoor cooking products, grills, and outdoor kitchens, rents kits with all the necessary equipment and accessories to cook paella, booya, teppanyaki, jambalaya, stir fry, seafood boils, and more, outdoors. For an additional fee, the retailer will also provide all the food ingredients, and even a chef to handle cooking duties while conducting an interactive class for party guests.

Joymode is a Los Angeles-based subscription rental service that allows people to borrow 10,000 products bundled around themed experiences, such as pasta-making with a pasta machine, dough scraper, and drying rack; a tiki bar with a margarita machine; or a backyard movie night package.

Consumers can rent individual bundles on a pay-as-you-go basis, or subscribe to a Joypass for unlimited borrowing during a three-, six- or 12-month period. Products are cleaned and sanitized between rentals, and delivered and picked up free (the company currently services the Los Angeles and Temecula, California, areas but plans major growth in 2020).

Outdoor cooking-themed bundles are in high demand, according to Joymode CEO and Co-founder Joe Fernandez. He says one of the most popular packages is an outdoor pizza-making kit that includes an Ooni outdoor gas pizza oven, pizza peel, and infrared thermometer, with optional add-ons (for an additional charge) such as a propane tank, dough roller, and cast-iron skillet. Fernandez says the outdoor seafood boil product bundle is an especially hot request during the summer.

Other outdoor cooking packages include a Backyard Barbecue bundle with a portable Weber grill, grill stand, tool set, and propane tank, and a Turkey Fryer kit with an oil-less turkey fryer, and related accessories. Joymode members can also borrow portable fire pits, patio heaters, camping stoves, and more.

Fernandez says about 20% of customers use Joymode as a way to try products they are considering purchasing. “We love being able to give people access to products in a way that enables them to make more informed purchase decisions,” he says.

Ryan Neeley, Marketing manager for Camp Chef, believes such programs can “only help” the outdoor cooking and outdoor living products industry. (Camp Chef’s portable camping stoves are featured in some of Joymode’s camping bundles.) “If someone takes a product for a weekend and likes it, they might end up buying their own,” he says. “It gives people an opportunity to take a test drive. A good quality grill or smoker can cost hundreds to thousands of dollars, so the buy-in is expensive. If you could try it first, you might be more willing to invest. I definitely would not be surprised if more retailers begin offering this kind of program.”

Oil-less turkey fryer.

To Rent or Not to Rent: The Retailers’ Debate

The sharing economy is only expected to grow as Millennials come into their own as consumers. According to Forbes, more than one-third of Millennials say they would rather rent than own a product.

Lest you think this movement has only a generational fringe following, consider this: Real Simple, a print magazine with 2 million subscribers and nearly 7 million readers with a median age of 52 and $95,000 median household income, suggests “borrowing before buying” in a recent article. It argues, “You borrow a book – why not borrow a weed whacker, stand mixer, or circular saw? Borrowing things like tools and kitchen gadgets saves you from shelling out for something you’ll only use a few times a year, and helps to make connections with neighbors and build a sense of community.”

Financial experts at the online newsletter “HerMoney” also advocate renting infrequently used items to save money and reduce clutter. They recommend renting things such as camping gear, luggage, cameras, power tools, and even portable grills.

The sharing economy is shaking up retail, to be sure, but it doesn’t warrant raising the white flag in defeat. Retailers who adapt to the trend have the potential to increase their customer base, grow sales, and thrive.

According to The New York Times, rental programs are a way to develop relationships with younger customers, by exposing them to the premium products they might want, but lack the disposable income to buy at full or even secondhand prices.

Forbes says retailers can also reach a new group of customers by offering pre-owned products that provide a more affordable entry point on luxury goods. As these aspirational consumers evolve into loyal, long-term customers, they eventually trade up to full-priced products. “eMarketer Retail” explains, “If you have a $1,000 luxury item and can get the same thing for $500 gently used, it brings more people into that market.”

On the flip side, accepting trade-ins makes it easier for current full-price customers to upgrade to a newer, bigger, better model, and may generate more frequent, full-price, repeat sales.

Rental products can often be a pathway to purchase. A study by Enterprise Holdings, the parent company of Enterprise, National, and Alamo car rental brands, finds that customers who rent a car or use car-share services are 55% more likely than the average consumer to purchase a new vehicle within six months. Some are clearly using car sharing and rentals as extended test-drive opportunities.

Similarly, experimenting with a kamado grill, smoker, pellet grill, or pizza oven over a weekend might be a good way for an on-the-fence customer to test out a product before buying. By reducing potential buyers’ remorse, a rental program might actually grow sales. Crediting a portion, or all, of the rental fee toward the purchase price might add even more incentive to close the sale.

Rental fees could become a new revenue stream for the store. Repeat rentals might actually generate a greater return than the margins on the outright sale of the same grill, pizza oven, fire pit, or accessory bundle. Offering pitmasters-for-hire to cook on the rented equipment at a customer’s party, is yet another potential source of revenue. (Avid barbecuers among your customers or staff might be interested in this kind of side gig.) As the pitmaster cooks and engages guests, the party becomes a defacto product demo, potentially leading to sales or rentals by other guests.

However, here’s a reality check about rentals: There is considerable labor involved. You must have enough staff and vehicles to administer the program, handle deliveries, and sanitize equipment between rentals. Also, the potential damage risk on pricy equipment necessitates sizeable security deposits.

But a rental program for small kamados, portable pizza ovens, smokers, charcoal grills, camping, and tailgating grills, fire pits, patio heaters, accessory bundles, and more, might be fairly easy – and profitable – to implement.

As consumers increasingly ask themselves, “Do I really need this?” before making a purchase, retailers must find other ways to get products into backyards and to monetize it. Providing opportunities to rent, borrow, share, trade-in, or buy secondhand grills and outdoor living products could do just that, while also positioning your store as a leader in sustainability.

Like it or not, the sharing economy is taking root, and contributing to the changing face of retail. Smart specialty barbecue and outdoor living retailers need to figure out how to tap into this trend.