The Rise of the Sharing Economy in the Outdoor Industry
The sharing economy is a new way of distributing goods and services beyond traditional buyer/seller relationships
As technology increasingly infiltrates society and companies shift the way we think about traditional industries, new economies are arising, changing the way that consumers buy and use products and services. One such new economy — as evidenced by the rise in companies like Uber, Airbnb and Rent the Runway — is the sharing economy.
Built on the idea of collaborative economy, the sharing economy is a new way of distributing goods and services beyond traditional buyer/seller relationships. A number of startups are entering this space across industries spanning concepts from ridesharing and apartment/home lending to peer-to-peer lending and reselling, co-working and talent-sharing.
This economy, according to PWC, is projected to grow from what was a $15 billion economy in 2014 to $335 billion in 2025.
At this week’s Denver Startup Week, members of the outdoor industry in Colorado gathered to discuss the ways the sharing economy is beginning to infiltrate their industry — making the outdoors more accessible, affordable and sustainable for all.
The businesses that were represented on the panel are entering the sharing economy from a variety of angles. This included: Wayfinder Co-Op, a co-working space and co-op for outdoor industry startups and entrepreneurs; Gearo, a software platform built for retailers to manage and list rental inventory; REI and its new Boathouse at Cherry Creek, which is providing on-site boating and paddling rentals at the state park; Under Canvas, a “glamping” company which sets up luxury camping sites outside of National Parks; and Slope Threads, a ski clothes rental brand.
Increasing the Accessibility of the Outdoors
The reason that each of these companies sees the sharing economy as a model meant for the outdoors lies within the concept of accessibility. “It’s all about democratizing access to the outdoors, that’s why the sharing economy is so trendy,” says May Lilley, the VP of marketing at Under Canvas. “It reduces the barriers to entry and the onus is on the outdoor industry to get more people outside.”
Some of the barriers to entry to the outdoors for a lot of people include the cost of gear, the transportation and storage space required to store large gear, and according to Shannon Ronan, activity center manager at the REI Boathouse at Cherry Creek, the primary and most consistent barrier is time. What this is referring to is the time it takes to commit to an outdoor activity, and that for many, the time spent actually using equipment for an activity versus the time it sits in storage may not justify the investment.
By adding the ability to share, borrow or rent equipment — as nearly all of the panelist companies are doing — it decreases nearly all of these barriers, allowing for people to try out gear, use it for a single trip or limited amount of days and be able to return it at the end — all at a cheaper price point than purchase.
Time also extends to co-working. “A long-term lease or purchasing an office space is similar to having a ten foot kayak collecting dust in the garage. It’s about using your time a better way” says Chris Baker, co-founder of the Wayfinder Co-op. “[Wayfinder] is driven by entrepreneurs and professionals that value their time and want to grow their business.”
This sharing economy is changing the way that consumers interact with companies and is something that is often seen as threatening to the traditional retailers in the industry, but something that could also help them reach new markets.
“Traditional retailers have been struggling to connect with the generation that wants things automatically,” says Justine Barone, CEO of Gearo. “But they have seen a large increase in retails just by having the ability to rent online. You can increase accessibility with technology.”
The Sharing Economy Consumer
The fear of some traditional retailers is that rental and sharing economy models will cannibalize their business, however, with the debate of accessibility, it may actually be bringing their products to new consumers. But who are these consumers?
“We had an assumption that millennials were our bread and butter, but that’s not the case,” Lilley says. “It’s families.”
This was echoed by many other panelists as families require more gear, which means more time, more storage and more money. The sharing economy (particularly within the outdoor industry) also nicely lends itself to family vacations. For Gearo and Slope Threads, traveling families may not live in a location where their desired activity even exists (skiing in Texas, for example), and renting, thus makes a lot more sense than purchasing.
However it doesn’t end there, other consumer groups include GenZ, who are seen as “digital natives” and used to getting products on-demand through technology and might not have the money to spend on gear and equipment; millennials, who are valuing experiences over products and are starting to have families of their own and are introducing their children to the value of these outdoor experiences; and to the growing urban consumer; who might not be close to recreation areas or even have the space to store gear and equipment.
A More Sustainable Business Model
The last piece that this economy reaches — which is a big one for the outdoor industry — is sustainability.
For Under Canvas, its entire approach is rooted in this. This includes the use of pull-chain showers that use 87% less water to similar hotels, compostable and sustainable materials; the use of solar power; a zero-waste goal; and a development approach that teaches guests to reduce and eliminate their environmental footprint.
But more generally, the sharing economy, because the consumer is reusing rather than buying new, there is an inherent sustainable aspect. While this doesn’t completely eliminate the waste and carbon footprint of outdoor brands, it’s certainly a step in the right direction.
REI is expanding its on-site rental business with the new Cherry Creek boathouse as part of the sharing economy, but Ronan noted that the co-op and retail company has been seeking sustainability in other ways as well. The retail brand, through its yard sales and repair shops, encourages its members and customers to extend the life of its gear and equipment. “Keeping things in use, that in the long-term is what drives sustainability,” Ronan says. The new boathouse is just another extension of this.
For Wayfinder, the shared use of a physical space is all about increasing energy efficiency — as well as sharing money — as each of the members of the space is sharing a building, rather than owning separately where energy cost and use would be much higher.