Information Technology Reference
In-Depth Information
The temporary ownership movement
The age-old concept of borrowing and renting, which saw a modern twist in
the wealthy segment through the introduction of fractional and collective own-
ership of property like housing and private jets, has been taken yet to another
level by the Internet. Since 2004, when US-based Avelle.com (formerly
Bagborrowsteal.com) and Frombagstoriches.com were introduced to provide
loaning services of luxury handbags and jewelry, the temporary ownership
movement has been quietly making its entry into other markets and altering the
way clients relate to luxury brands and products. Today France has Sacdeluxe.
fr, Japan has Newell and even Australia has caught the bug with MilaandEddie.
com, all with full-serve lending services of luxury handbags, jewelry and acces-
sories which are apparently thriving. These websites are highlighting the sec-
ondary market value of luxury items and changing consumer attitudes towards
ownership. In the context of shortening product cycles where luxury brands seem
to launch cruise and capsule collections every two weeks, the temporary owner-
ship attitude of clients seems to have found a justification. The consequence is
a shift in the value-systems of clients and a change in the parameters through
which they evaluate luxury brands. And the impact on luxury brands could be
either of two ways - the fueling of the desire actually to own the products and
the reluctance to purchase luxury products, likely from different client segments.
The luxury product loaning business, which mainly began with low-ticket
items like the entry-point $400 handbag, have elevated their offering to include
higher-priced items, limited edition products and couture pieces. It is now
common to find the current season's handbags available for rent just days after
their release. Also, there are no restrictions to the brands available. From Louis
Vuitton, Dior, Chanel, Hermès, Prada, Armani, Valentino, Bottega Veneta, Mui
Mui, Dolce & Gabbana, Gucci and Cartier, the brand and style assortment in
the handbag section of these websites is as rich as any luxury department store
floor. They apply a formula of getting the product mix right, ensuring that they
are duly covered by insurance and presenting them in a desirable format. The
websites also feature interactive content like a blog and in some cases a user
community, creating a spirit of inclusion and sharing. Their subscription-based
approach as well as member-only offers including private sale of seasonal
handbags have also contributed to their growing popularity.
Luxury brands, on the other hand, initially showed reticence in accepting this
off-shoot of luxury e-retail and were suspicious of the websites passing off fakes
as authentic products. Also, the lack of direct control over the distribution of the
products, the inability to ascertain the quality and state of the “used” products,
the level of service provided, the packaging and presentation of the products, as
well as the effect of bypassing the shopping environment and experience pro-
vide areas of concern for luxury brands. Since luxury brands cannot pretend that
product-lending services do not exist or that the temporary ownership movement
is not in full swing, they must find a way to overcome its challenges and ensure
