HUI Research recently presented a report on the developing sharing economy, together with Tieto. The retail sector is currently experiencing one of the most revolutionary phases in its history. Digitalisation is crushing some business models at the same time it is creating many new ones. Awareness of growing global environment problems that are caused by consumption is growing stronger and stronger and creating shifts in values amongst younger consumers in particular. This means that having the biggest car in the garage and most gadgets in the house are no longer self-evident status symbols. Actually owning a particular product will accordingly not be the key requirement in the future. On the other hand, however, people will still want to have access to many things.

For a very long time, we have had to buy the products we want to use regardless of how much or how little we actually use them. Owning items that we need constant access to is logical – a refrigerator – or things that might be strange to share with others – a toothbrush. Owning things that we use only occasionally is neither cost-efficient nor eco-friendly, but ownership is the only way to ensure we have access to the product when the need arises.

The sharing economy has emerged in the wake of the digital revolution as a way of using resources that are under utilised. Digital platforms are utilised to find users for existing resources that can be shared such as empty accommodation, offices at half occupancy and cars that are not being used. Digital platforms have become new marketplaces and have given us numerous unrivalled ways to communicate with each other. The technology has made it easier than ever to create scalable ways to share services and products.

The retail second is being greatly impacted by the growth of the sharing economy. Experimenting retailers are creating new business models that are based on consumers renting products, e-tailing offers home delivery via a sharing service and there are now sharing services for installation and assembly that are either brokered via traditional retailers or entirely new parties.

The Swedish retail sector has great potential to build business models based on access to a product instead of owning it. According to a recent consumer survey, Swedish consumers say they would mostly like to hire tools and machinery, sports/leisure equipment, home electronics and cars and bicycles. The driving forces that prompt consumers to switch from buying to hiring products are that home delivery is quick, that they gain access to a high-quality product at a lower cost and access to a more flexible range when a need arises.

The sharing economy within retailing is in a first paradigm and the question is what is required for its continuing development? We believe that several pieces of the puzzle need to fall into place. Transaction costs need to be lower – both monetarily and in terms of time and energy. In addition, it will require a positive climate of opinion, innovative companies, well-developed delivery solutions and disruptive changes where intermediaries are eliminated. It is also important that laws and rules are adapted in line with a new reality. Employment law is still a very grey zone. Several countries, including Sweden, are attempting to adjust their regulations to the new landscape that has emerged. However, here there is a significant risk that this will slow things down and take time as it is not uncommon for the establishment to try to put a brake on progressive developments. Politicians and bureaucrats tend to “get bogged down” on the supply side and their main concern is the job opportunities there are right now instead of taking consumer demand as the starting point. However, current rules and regulations should not be considered to be some kind of perfect system, they have grown out of historic realities related to technical and economic conditions.

The question is: have we reached peak ownership? Will future consumers be able to imagine hiring/borrowing everything except perhaps their mobile phone and toothbrush? How quickly the sharing economy can grow and how large it can become, remains to be seen, but it will change the sector logic of retailing in the future.

Listed below are a number of interesting examples of new parties that are experimenting and creating new concepts:

• Rent The Runway – sharing luxury clothing (access is the new ownership!)
• Hygglo – rents objects you don’t use every day.
• Bloomon – subscribe to flowers
• Fritidsbanken (leisure bank) – a kind of library for sports and leisure items.
• Scentbird – subscribe to perfume