The Sharing Economy Just Got Larger

For those DPHA members of a certain age, you may recall an Alka Selzer commercial with the mantra, "Try it you'll like it."  Best Buy is taking a page out of Alka Selzer's play book. The company recently announced a new try-before you-buy option on its website.  Those interested are then directed to a third-party administrator's site to lease the TV, iPhone, wearable or other electronic gadget that the customer is considering purchasing. 

Best Buy's motivation is to sell more open box items - merchandise that was returned that can't be resold at full price.  The new program is another means that Best Buy is using to connect with customers earlier in the customer journey in an attempt to capture consumer interest and wallets before they go to Amazon.  The giant etailer currently does not offer a rental program, but that may not be too far off.  Best Buy customers can either buy the product they have leased at a reduced price, purchase a closed-box item of the product they are leasing at full price or return the item. 

This week Amazon launched its new Wardrobe program that will enable its customers to order clothing and accessories and try them on at home.  If the fit is not right or the consumer simply does not like what they have selected, they can return the items freight free.  This is Amazon's attempt to gain more market share from brick-and-mortar retailers by allowing customers to use their own homes as Amazon's dressing rooms.  Obviously, Amazon's risk is a potential huge shipping bill for free returns.  However, just as Amazon is using predictive analytics for household items sold on Prime Pantry that has reduced the cost of returns, the company will use a similar model to control costs for Wardrobe to make more accurate and better product recommendations and thereby reduce the risk that customers will not keep the clothes they ordered.

Best Buy's trial testing program and Amazon Wardrobe are new disruptive attempts to challenge conventional brick-and-mortar retail practices.  What can your showroom do to capitalize on the sharing economy?  What's preventing you from trying?