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a kayaker can justifying spending more
on a higher-end boat because the price
difference can be recouped by renting
the kayak out to a community.
“If market forces play out as ex-
pected, quality becomes less heavily
juxtaposed against price,” says the
PwC study. “In fact, the durability and
the resale value of higher quality goods
may make them a more economical
investment in the long run.”
That shift, in turn, “could put
the squeeze on ‘cheap chic’ and
other mass market goods made
to appeal on price point above
all else,” the research firm contin-
ues. It also seems to suggest an
early candidate for disruption are
entry-level providers within big-
ticket categories – particularly
items with infrequent use. While
these entry-level products may
be cheaper relative to competi-
tors, they can still require a sig-
nificant up-front investment, so
renting becomes reasonable.
Not that entry-level sales will
be the only sales displaced. Within
the outdoor recreation industry
specifically, participation surveys
show that avid users also are often
multi-sport users. The most active out-
door participants, according to Outdoor
Industry Association, take part in about
seven traditional outdoor activities. It’s
not hard to imagine, in today’s reality,
how an avid climber who also backpacks
or mountain bikes occasionally might
forego the purchase of a tent or bike
when she can save money by renting
those items a few times a year from
Ayoopa or Spinlister. Or rather than stor-
ing a stand-up paddleboard in a small
closet year round, she rents a board two
or three times a summer.
So how do existing brands and
channels adjust for any potential dis-
ruption? Contrary to the hype, the
rise of borrowing doesn’t mean retail
will be decimated. Within the outdoor
recreation industry, too many avid or
regular participants simply enjoy their
gear too much to give up ownership.
“I don’t think the experiential
economy will kill the product economy,”
says Brown. “I started a company that
does peer-to-peer outdoor rental, but I
personally own a ton of gear.”
The sharing economy, rather, is
“simply a heads up for companies to
take a fresh look at the brand, their
products and their operations in the
new ecosystem,” say PwC researchers,
“and weave sharing into the omni-chan-
nel experiences they are creating.”
A first step is to re-evaluate the val-
ue proposition from being solely a pur-
veyor of product to an enabler of ex-
periences (something not at all foreign
to outdoor brands). Some automakers,
for instance, by starting their own car
sharing programs or investing in peer-
to-peer start-ups, are in the process
of reframing themselves as providers
of “personal mobility services” rather
than just manufacturers of vehicles.
“Other services in my life have
trained me to want these on-demand
experiences,” says Brown. That model,
he says, can be applied to outdoor
experiences, whereby the customer
faces very little to no barriers to entry
– unlike the personal guide experience,
which can be costly and intimidating.
“There’s no planning, no equipment
investment, none of that. You just show
up, have this great experience, and
we’ll take care of the rest,” he contin-
ues. “From that experience, you can
upsell people on product.”
Retail brands also can inject them-
selves into the peer-to-peer process.
Firms can carve out new revenue
streams that are adjacent to core capa-
bilities by creating or facilitating a peer-
to-peer or other like-minded marketplace
– possibly leveraging their social media
presence – or by becoming a provider
that feeds into an existing system, as
Kelty has done with GetOutfitted.
“By stepping in as a facilitator, a
company can better manage the qual-
ity control aspects of its ‘shared’ goods,
ensuring consistency of the brand expe-
rience,” PwC researchers recommend.
For brands, there’s also an oppor-
tunity to use the sharing economy
to promote sustainability messag-
ing among consumers, who are
growing more environmentally
aware. Patagonia and Levi’s, for in-
stance, have partnered with Yerdle
to distribute unsold merchandise,
thereby finding a marketplace for
these goods instead of disposing of
them in a landfill.
There’s even a way for retailers
to re-assess their physical footprints.
Start-up sharing site Storefront offers
an Airbnb-type of exchange for mer-
chants. The platform connects those
who have shops or empty real estate
in highly trafficked areas with mer-
chants seeking to push their wares.
Listings range from full retail stores
that can be used as pop-up shops to
shelf space in boutiques, and locations
range from neighborhood shops to sub-
way stops to hotels.
As with any innovation, the rise of a
sharing economy faces its fair share of
speed bumps. Anyone who has followed
the news surrounding car-sharing sites
such as Uber understands that much
still needs to be hammered out in terms
of government regulations, taxes, secu-
rity, liability and employment law.
But if nothing else, sharing, peer-
to-peer and collaborative consumption
remind us that value chains do change
and business models cannot be taken
for granted, particularly in the modern
digital era. Companies that are willing
to stay nimble, explore new ways to
bundle and unbundle product and ser-
vices and tackle new challenges will be
the companies in the best position to
capitalize on new and emerging oppor-
tunities. Those that don’t? Well, ask a
record company executive circa 1998.
“It may sound grim, but if your busi-
ness can’t figure out how to disrupt itself,”
PwC researchers warn us, “someone else
out there will do it for you.”
Inside
Outdoor
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Summer
2015
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