How the sharing economy is shaping the future of retail
By Dan San | Jan 24, 2019
In 2008, a startup called Airbnb began to popularize the sharing economy. The concept was simple: If you have extra space in your home, list it on Airbnb and people will rent it out. You get paid and the visitor has somewhere cheaper and homier than a hotel to stay. A year later, Uber arrived on the scene and people began sharing their cars and driving services in exchange for cash. In both cases, similar questions around sharing, safety and legality arose.
By 2016, nearly 45 million people in the United States were participating in the sharing economy. A Bloomberg article from the same year estimated that for each dollar spent on UberX, the social value for consumers was $1.60. And the number of sharing-economy participants is only projected to increase to 86.5 million by 2021.
As a startup sales expert who has distributed Meural products to over one hundred retail stores and who has worked in the front lines of retail at Macy's, I pondered the ways in which the sharing economy could impact retail. Here are some of the trends I'm seeing that retail business owners should pay attention to this year:
Sharing Labor
Many part-time retail workers have schedules that are constantly changing; they often end up with inconvenient schedules with little pay to make up for it. As reported by Retail Dive, workers want more consistent hours and more pay. In turn, this means companies are losing money due to the high turnover of workers seeking more stability.
When I worked at Macy's selling women's shoes, my schedule always caught me by surprise. There was a system I could use to change my shifts to some extent, but it would have been extremely valuable to me, and everyone else who dreaded the uncertainty and lack of control of that system, to be able to see when other people were working in order to trade times.
A few months ago, a startup called Forge released a case study detailing how its software aims to help retailers share part-time labor. Employees at the mall who are looking for more hours apply for other part-time gigs at the mall, and employers looking for extra hands hire the part-time employees who fit the bill. While some retailers argue that sharing part-time labor leads to a competitive disadvantage, over 65 retailers in one mall alone signed up for Forge.Article was originally published here.
According to the case study, Forge saved the retailers at this mall over $27,000 in costs associated with full-time employment in the first two months. This example illustrates that sharing labor might be the next big breakthrough in the sharing economy. The key for retailers to tap into the power of the shared economy is using tools that allow a community to form in their retail workforce.
Physical Storefronts
After Amazon almost took traditional bookstores out of business, the company started and has continued to open brick-and-mortar stores. Brick and mortar is clearly here to stay, which has left other e-commerce companies trying to figure out their physical storefront strategies if they hope to expand and grow sales.
E-commerce companies seeking to expand into retail must ensure they understand the costs of pricing and shipping their products for bulk orders to retail buyers. Establishing your own retail space is extremely expensive and it can always be done later, once you've established a solid understanding of how to sell your products in retail.
Opening up a physical store for an online company often proves to be a challenge. Designing a storefront, figuring out distribution and managing part-time employees are all things that can make or break the business. New companies and solutions are surfacing to address these challenges. For example, companies such as Neighborhood Goods and Showfields are creating shared showrooms that are acting as e-commerce companies' first physical presence. b8ta is revolutionizing retail by allowing upstart brands to get exposure to early adopters all while using software to track metrics that matter, like how long someone looks at a product and how many choose to buy.
The sharing economy's enhancement of retail worker conditions and product experiences ensures that retail continues to evolve as our world rapidly changes. For companies that sell physical products, being in storefronts provides a level of visibility, interaction and credibility that sets their business apart in a world with many competing e-commerce stores.
Returns
With $90 billion worth of merchandise being returned after 2017’s holiday season, according to the Wall Street Journal, brands are trying to find a seamless and cost-effective way to deal with returns to enhance the experience of their customers. Some companies like Walmart and Costco have an advantage with the sheer number of physical storefronts they own, but other companies with little or no presence struggle to make the return experience a positive one for customers.
But another company in the sharing economy allows brands without a physical storefront to accept any return at their “returns bar.” The concept is simple: Companies without a physical storefront sign up with Happy Returns. Any customer can then stop by one of the hundreds of returns bars and drop off any product without a receipt. Happy Returns refunds the money and takes care of returning the products back to the right brands.
Allowing retailers to pool services creates a better experience for customers who can take one trip rather than returning items at multiple different storefronts, and it allows companies to reduce costs associated with staffing their own clerks to handle returns. This enhanced experience ensures customers are satisfied and increases the likelihood they will return to do more business. A poor experience may turn a customer away and hurt business.
The sharing economy is changing the way retailers are doing business. Companies that don’t adopt these new technologies fast enough are shuttering stores. But the ones that do are thriving and truly pioneering the future of retail.
Article was originally published here.