Can the sharing economy make inroads outdoors?

Services like GearCommons.com and Outdoors.io connect consumers to shared gear — and could help specialty retailers, too.
Author:
Publish date:

Remember how mom always instructed you on the importance of sharing? Well millennials are taking that motherly mandate and extending it beyond their real friends (and even their Facebook friends) to complete strangers across town and across the world.

In a movement known as the “sharing economy,” individuals are letting folks they don’t know from Adam make use of their homes, their cars and if a few select organizations cropping up across the country have anything to say about it, their outdoor gear.

One of the most successful examples of today’s sharing economy is Airbnb, a global outlet for individuals to rent out their homes. Founded in San Francisco in 2008, the organization has exploded to have listings in 190 countries across the world and millions of users. Anyone can hop online, request to rent someone’s home, and if the homeowner accepts the request, they hand over the keys for the designated dates.

Other sharing organizations such as Uber and Lyft are making inroads with on-call taxi services, while others such as TaskRabbit connect people who have any old task with someone willing to perform it.

For users, one big incentive is to save or make money — skirting and increasingly irking established industries — but these sharing apps and databases also provide smartphone convenience, social reviews and ratings from real users — things increasingly valuable to millennials.

GearCommomsSharingEconomy

Outdoor sharing
Visit GearCommons.com and up pops the exhortation “Get gear. Get outside.”

The site, and others like it, allow renters to post any human-powered adventure gear — think camping equipment, kayaks and backpacks — for people in their area (or who plan to be in their area) to browse, request and rent for an agreed price.

To put it simply, it’s a crowdsourced rental business.

Take the example of a woman looking to rent a tent. She browses one of the sites and finds a tent that fits her needs at a price that fits her budget, she can message the owner to ask any lingering questions and request the rental. The owner then has a chance to accept or deny the rental request. If it’s accepted, the renter is charged, the transaction is complete, and it’s up to the participants to make the exchange. Most sites then take a 10-20 percent cut of the rental fee.

So far, only outdoor hardgoods have gained steam in the sharing economy, not that that’s too surprising. After all, who wants to share their sweaty, blood-stained baselayers — or rent them for that matter? But that isn’t to say softgoods couldn’t have their place. Generally, people are willing to pay for lower cost, more regularly used items like a standard winter coat. Michael Brown, one of the GearCommons founders, offers the example of a belaying jacket. He points out that in ice climbing “mostly you’re freezing to death,” making sweat a non-issue, and the jacket’s hefty $500+ price tag is tough to swallow for an item used only on rare occasions.

Pros and cons
The simple setup behind sites like GearCommons and Outdoors.io provides benefits to everyone involved. For one, those renting their gear are able to make a little extra cash on items that were just sitting around, collecting dust.

Meanwhile, the renter gets a chance to try out a new activity for a minimal price. Plus, with the growth of urbanization and the downsizing of living quarters, people just don’t have room to store all that gear. Add onto that the millennial movement toward minimalism, and the sharing economy hits a homerun. “It’s less about owning products and more about having a variety of experiences,” said Outdoor Industry Association Market Insights Manager Lorna Caputo. “Consumers do not want to have to purchase gear for one experience.”

But there’s a deep-seated fear haunting many a gearhead, often preventing them from posting their beloved belay devices and sleeping bags: the possibility of a renter trashing their gear. While those with experience in the sharing economy repeatedly say that shouldn’t be a major concern, it still acts as a major barrier to participation.

“The reality is, bad things don’t really happen, especially when you meet face to face,” said Rob Auston, founder of Outdoors.io. “We haven’t had any issues … but a lot of the larger audience wants some type of assurance that there is some type of protection there.”

As a result, the rather utopian concept of trusting thy neighbor is giving way to more concrete methods of defense. Shurfing, an Amsterdam-based platform that facilitates sharing among surfers around the world (because, who wants to carry a surfboard to the airport), is working with a Dutch insurance company to figure out a way for citizens of two different countries to be covered under a single insurance clause. Outdoors.io similarly is looking into the possibility of partnering with an insurance company. GearCommons has a built-in security deposit associated with each item, an amount that the owner predetermines. If damage occurs, the renter’s credit card on file is charged for that amount.

Business potential
With the sharing economy generating $26 billion according to Collaborative Lab, it’s clear that the possibility of damage to an item, whether it’s a car or a canoe, isn’t hurting the trend. Pair the revenue generated by the sharing economy with the $3.5 billion rental economy, a 25 percent jump from last year per data from Forbes, and it’s clear that consumers are more interested in trying before they buy, regardless of where they get those items. This presents the possibility for an interesting, and potentially profitable, partnership between the peer-to-peer gear avenues and the more established rental gurus and even outdoor retailers.

Houston-based start-up Ayoopa began under a peer-to-peer model and moved to a purely rental model. Now rental companies across the country can list their items on the Ayoopa site, making a one-stop-shopping outlet for those looking to rent gear.

“What we quickly found out was that while the social component is pretty cool because people get to meet each other, it does cause friction,” said Ayoopa co-founder Wayne Lopez. “When you have the rental company in a fixed location, you don't have to go through the work of where to meet these two times [to exchange the gear].” And of course there’s the added safety benefit of knowing the renter is reputable. More and more retailers are beginning to ship items to the desired location, complete with a prepaid return label, eliminating the in-person exchange step all together.

Both Outdoors.io and GearCommons are phasing in a home for retailers. Often small mom-and-pop gear shops have the equipment to rent, but not the technology to market its availability. By posting their items to sharing economy platforms, the amount of available gear skyrockets, and retailers gain exposure. It’s a win-win.

Auston points out that retailers fill a valuable niche for Outdoors.io. “It’s a different mix between where we focus on peer to peer vs. existing rental shops. Camping is very well suited for peer to peer; it’s just camping gear, not a lot of adjustments or specialization. But think about skiing. Skis require a lot of adjustments and expertise so we’re going to rely on people who do it right,” he said.

GearCommons already is sending feedback to renters, reminding them that they highly rated an item post-use, and then letting them know where they can purchase it should they decide they need it. This presents a great opportunity for retailers to make contact with a new consumer base, get them interested in the gear and possibly score a sale later on down the road.

As for brands breaking into the sharing space: It turns out there’s room for them, too. Eddie Bauer recently donated $10,000 worth of camping gear to Outdoors.io in an effort to raise awareness of the brand and make itself more relevant to younger consumers. GearCommons has tracking capabilities that can determine where a particular brand’s heavy users are located and then target advertising to them.

“Brands can take advantage from a renting standpoint and sales and advertising too,” Brown said. “You can basically help people make informed gear purchasing decisions based on their behavior on the site. It’s completely untapped with a lot of possibilities, [but] people don't really know what to think about it yet. Let’s look back at this in two years and it will sound really, really obvious.”

Sharing future
The folks at GearCommons, Outdoors.io and Ayoopa are hesitant to divulge just how profitable their efforts have become. Each glazes over the numbers, emphasizing instead that their platforms are continuing to grow. “We’ve doubled revenue every month this summer,” Auston said. “It’s not big numbers, believe me. When you start from zero you can double things pretty easily.”

While profits are a keen perk, ultimately the outdoor industry’s involvement in the sharing economy is a chance to ignite a passion for the outdoors in a new segment of consumers. “The whole goal is to get people outside and to remove ownership of gear as a barrier to participation,” Brown said.

--Courtney Holden

Related

ORWM15_YoungRetailers_thumb

The new face of outdoor retail

Throughout the next month, SNEWS will recap its coverage of Outdoor Retailer Winter Market 2015 with select stories from the O.R. Daily we published at the show Jan. 20 – 24. It’s an opportunity for you to catch up on stories you might have missed in O.R.D., and for us to update ...read more