Is a shared closet in play or not?

Around 2014~2015, the wave of the sharing economy took the country by storm, and the development has reached the present day, the competition of the shared bicycle has come to an end, but in many segments, many sharing models are still running, and the shared closet is one of them, for example, on September 7, 2018, the shared closet platform "Clothes Two Three" once again It has won the strategic financing of Alibaba Group, and has also been included in the "2018 China's new consumer industry unicorn list".

In 2014, the goddess pie came out, the concept of shared closet also gradually popularized, in 2015, the clothes two three on-line, take the membership monthly system, the dues for 499 yuan / month, in three years, clothes two three before and after the Alibaba, Softbank China Capital, Sequoia China, IDG Capital, GSR Ventures, Zhenge Radicals, and other top-tier investment institutions, the cumulative amount of financing reached hundreds of millions of U.S. dollars. The cumulative financing amounted to hundreds of millions of dollars. Since then, Doraemon, Magic Closet, that clothes and other domestic local clothing rental platforms have also emerged.

Shared closets cater to the reality of consumerism. According to Baudrillard, consumerism stimulates the desire to consume through the implied structural meanings and symbolic values created by symbols, codes, and scarcity, which is a kind of "subconscious domination and domination of deep psychological modeling". He believes that the essence of consumerism in a consumer society is the ideological domination of all people through a sense of pseudo-freedom and pseudo-equality, and that people delight and paralyze themselves in the illusions and landscapes of glamour.

Therefore, it has been said that contemporary young people are indulging in the sensual pleasure of "chopping" on the one hand, and suffering from the pain of high commodity premiums and their own low purchasing power on the other.

In a way, the shared closet is a compromise to alleviate this pain. The so-called shared closet is an online rental program that allows you to spend a small amount of money per month to choose the clothes you want to wear in a similar way to online shopping. The lower rental price allows more consumers to rent and enjoy new fashions, and consumers can not only "rent" this form of ownership but not possession of their own pleasure, but also not because of the purchasing power of the overdraft and feel the pain. It seems to be a better catering and fulfillment of people's consumption needs.

Not just for the masses, but for a niche market.

But the reality of the development of shared closet does not seem to be optimistic. Clothes two three development has been a few years now, although many capital favor, but the volume of users is not large, after the industry's shuffle, the rest of the shared closet products have entered the red sea, and is still in the capital competition for products such as Goddess Pie, Clothes two three, Clothes Bank, Tote Wardrobe and so on. And Doraemon, magic closet, love beauty carefree, have clothes, that clothes and many other brands have stopped operating. At present, there are less than 5 domestic shared closet brands left, shared closet there is no play?

To answer this question, you need to start with the business model and user needs of shared closets.

In my opinion, this kind of clothes rental sharing culture, will be based on the women's market is increasingly strong demand for rental clothes and the existence of, to know, the United States to share clothes can also be popular related to its consumer soil, in the United States the second-hand market of the consumer culture is mature, renting clothes is very common, but in the country, with the change of seasons, the popular color iteration, the demand for women to change the purchase of clothes has always been very strong. For women in China and the U.S., one thing remains the same, there is always a lack of a beautiful dress in a woman's closet. But on an economic level, white-collar incomes limit their desire to keep changing into new clothes, so occasional sharing and renting can also be considered a relatively strong hidden demand.

However, when it comes to shared closets, there is still uncertainty about whether it is cheap enough to share and maintain, whether it remains usable after multiple rentals, and whether there is enough of a market and frequency of use.

Of course, for high-income groups, most of them tend to buy clothes directly rather than sharing them with others, and they are also more worried about the risk of infection and disease. Therefore, for the sharing of closet products, to occupy the market and expand the market scale, it is necessary to occupy the user's mind and change the user's concept.

But the fact is that people can share non-private, rigid products such as bicycles and rechargeable treasures, but for clothing and other more private items, people have not yet formed the concept of sharing private and personal items. In other words, people are more willing to buy rather than rent for privacy and material luxury to improve their standard of living. For items that need to be worn on the body, the more intimate they are, the less they are willing to share them with others.

That is to say, sharing clothes it does not have the immediate demand attributes of items such as net car, bicycle, etc. It is more of an episodic and temporary demand from a niche market, and in some cases, the demand for B-side leasing is established. For example, for occasions such as travel photo shoots, wedding dresses, performance dresses, evening dresses, and special uniforms, interviews for recent graduates, etc., it still has a certain demand - when people's demand for style and quantity of clothes is greater than the demand for wearability and material, they will still choose to share their closet. So in the end, the shared closet does not meet the majority of people's pursuit of clothes and ideas, but matches the needs of a niche market.

Risks to the business model

From the business model point of view, the current mode of shared closet is mostly B2C and B2B2C. the former refers to the platform self-supporting, clothing is purchased by the platform, and then rented to consumers, and the latter refers to the cooperation of merchants stationed in the business, directly docking clothing brands and consumers. Do not ask the platform to buy out, on the platform for a long time in the way of leasing profit, the two sides revenue sharing.

From the consumer side, consumers based on the purchase of monthly rental clothing services, the platform is responsible for packaging express, responsible for dry cleaning and ironing and bear the return postage. In terms of the industrial chain, it specifically involves the source of goods, selection and procurement, cleaning and maintenance, warehousing and transportation. However, it is necessary for the platform to build its own laundry center to control the cleaning process, and it is also necessary for the platform to build its own warehouse, which is distributed by a third-party logistics company, and the platform bears the logistics costs.

From an overall point of view, the platform bears the cost of the source of goods, selection and procurement, cleaning and maintenance, warehousing and transportation, etc. However, the profit model mainly comes from three aspects: membership dues, purchase conversion revenue and B-oriented revenue. Among them, membership dues account for the majority. For example, some data show that 75% of the "clothes two three" platform revenue from membership fees.

In the current shared closet platform, in order to share clothes, the first thing you need to do is to become a member, usually paid monthly, for example, in foreign countries, LE TOTE shared closet brand, consumers need to spend 599 yuan a month to become a member, in order to enjoy the domestic and international brand clothing rental services, that is to say, become a member of the membership even if the user did not rent clothes in the month, but will still be charged a membership fee. In the domestic membership price is different outside, in the model is basically similar.

The risk to the profitability of a shared closet may come from the membership fee model, because for many users, a momentary taste becomes a member, but after the impulse period passes, membership renewal and repurchase rates are not ensured.

In fact, from the current shared closet model, people have no shape for this perception that renting clothes = consuming fashion, in the case of the platform user scale is too small, the rental rate is not high, the platform will face the pressure of capital, cost and inventory of its own, but with the growth of the user, the middle and late face the pressure of brand purchasing and supply chain, the need to bear the cost of purchasing, logistics costs, cleaning and maintenance costs and storage Management costs, as well as the need to dock more brands, more popular styles on the shelves, including cooperation with laundries, and even build their own cleaning centers, etc., but the revenue is nothing more than rental income. However, if the cost of investment is too high and the rental income is slow to return, once the capital chain breaks, the risk is immediately presented.

Is there a play or not?

To some extent, the shared closet fits the needs of many clothing brands to go to the inventory at the moment, the current various clothing brands will originally not sold and backlog of clothes in the warehouse to take out and share, in itself, is also a kind of optimization of the allocation of resources. For the platform, that matches the needs of specific groups, and help brands to solve the inventory pressure, to connect the supply and demand sides, the sharing of idle excess resources, excess capacity and so on.

For the shared closet platform, I think there are still many aspects that have not been done. First, the lack of content community. For this kind of shared closet APP, the main focus is the female market, and women are characterized by a stronger demand for shopping, sharing and communication than men, which has led to the achievement of Xiaohongshu, women's exchanges and sharing can promote the platform's activity and rental rate of clothing, and can even be driven by KOL to create explosive categories. However, on most of the current APP, there is a lack of a community for communication.

In addition, the future development of the current shared closet platform, there are a few points to consider: one is the reasonableness of the lease pricing is very important - the lease price if it is too expensive, people will be more inclined to buy, for example, because the clothes, bags and such items are easy to depreciate, sharing many times after the more and more old, the longer, the more difficult to re The more time passes, the more difficult it is to share, and the more businesses and platforms need to cater to the trend of constantly adding new products.

The second is how to reduce supply chain costs - sharing rental clothing belongs to a niche market, the slow increase in the number of orders, and clothing updates, cleaning and disinfection, and other maintenance of clothing costs such as logistics and distribution costs are high, resulting in the platform management and operating costs can not be amortized, coupled with the natural wear and tear of the clothes and intentional man-made damage and so on are very difficult to define the responsibility.

Thirdly, the male market should be expanded appropriately. There is a law of business that many people agree with: from the perspective of the value dimension of the consumer market, teenage girls>children>young women>elderly people>dogs>men. The current shared closet is almost 100% focused on women's clothing needs, and men's clothing is currently a blue ocean market. But in fact, the business of this law identified seems to be a bit old and outdated, men are not no consumer value, but lies in whether you can tap its consumer value. In addition to women, the platform side should expand the category, increase male clothing and tide brand, independent designers and other niche brands to pull the long tail, competition blue ocean market.

Fourth, it is necessary to cooperate with brand merchants to create a pop-up brand to meet market demand. For brand merchants, a one-time sale of pairs in order to meet the demand for quick profits and quick return of funds, and if the depreciation of the clothes sharing does not go out and its own rental frequency has not returned to the capital, will lead to a huge inventory, financial pressures and waste of resources, which in turn affects the brand's demand for cooperation.

As mentioned earlier, the more items are designed to be private, the more people tend to privately possess them rather than share them. If people are not immediate needs at this point of demand, then after the novelty is over, users will easily fall into the fatigue of phenomenal consumption, and over time, user activity will continue to go down.

Hygiene is therefore the biggest concern users have about trying to share clothes, and addressing this concern is something that shared closets need to promise consumers and address. At the very least, the more people are concerned about quality of life, the less willing they are to share the same clothes with thousands of other people, just as many people are more or less resistant to sharing towels and washcloths in hotels. After all, the sharing of clothes is no longer a matter of psychological cleanliness, but a matter of health and quality of life. How to ensure the quality of clothes and service through standardized processes and higher standards of cleaning and disinfection is a key part of the process.

For platform operators, they need to dig deeper into niche market clothing categories - such as travel photo shoots, wedding dresses, performance dresses, evening gowns, and special uniforms and other categories of supply and selection. There is still a market for temporary wear for these special occasions.

Overall, the domestic clothing rental industry is still in its infancy, and how to influence the public's established concepts and cultivate users' minds through operations is the key to its future growth. Overall, it will not become a popular choice, but the shared closet may become a choice in the female consumer market for a long time.