Better than Buying: Barter Economy Matures from Niche to Trend

By and

Once derided as an eccentricity of the environmental movement, the recent economic crisis has helped transform the sharing economy from a niche trend to a full-scale phenomenon. In the coming years, sharing cars, bikes and even clothing may become as viable as buying.

From the perspective of the fashion industry, Johanna Lassonczyk is an ideal customer. She is young, places value on her appearance and, for years, has regularly bought new brand-name clothing and accessories.

From Lassonczyk's own perspective, the fashion industry is in pretty bad shape. That's because the industry has lost her, at least as a loyal buyer. The 31-year-old has recently started swapping instead of always buying new things. "At some point I had so much in my closet that I didn't know where to put it all," she says. The self-employed entrepreneur has recently started attending so-called swap parties. The last one was the "Xmas Event" hosted by the website "Swap in the City" at Cologne's E-Werk concert hall. The motto of the event was "Bye-Bye Shopping! - Hello Swapping!"

It's a straightforward principle. You clean out your closet, gather the things that no longer fit or you don't like anymore, and take them with you to a swap party, where you pay an entrance fee. In return, you receive a credit in the form of fake coins. The clothes are prepared by professionals and, two hours later, displayed as if they were new items in a store.

To make sure the events don't end up looking like flea markets, a jury of organizers only accepts brand-name items. While they wait, visitors listen to lounge music, drink cocktails and receive makeup tips, before they eventually have the chance to swap their credits for other used clothing, bags or shoes.

A Reaction to the Financial Crisis

"Swap in the City" was established in reaction to the financial crisis, offering consumers a platform with which they could curb their shopping urges without having to do without new things. "Germans' consumption behavior has changed considerably," says Harel Shalev, the managing director of "Swap in the city." "This is exactly why platforms like ours can be so successful."

Even though Germans are decidedly in a buying mood, given the strong economy and economic successes, a sort of parallel trend is developing at the moment -- still small, yet interesting. US trend expert and author Rachel Botsman calls it "collaborative consumption," and in her book, "What's Mine is Yours," she invokes a renaissance of sharing and swapping.

The trend is especially exciting to younger generations in Germany, people who have little disposable income to buy things and enhance their social status, and yet don't want to do without anything the consumer world has to offer. They share living space, clothing and cars, and they run community gardens and tool swapping clubs.

Some already see a sharing economy taking shape. Time has declared this new form of consumption to be one of the 10 great ideas that will change the world. But does the movement truly have the power to offer a response to the Western hyper-consumption of the past, one that is both environmentally conscious and hedonistic?

Web Professionalizes Sharing

Apartment sharing centers, reading groups, ride sharing and flea markets have been around for a long time. The new thing about collaborative consumption is that it can achieve a broader impact with the Internet as both a stage and a platform. The web professionalizes swapping and allows it to develop into an independent branch of the economy.

People can swap services through the Berlin company "exchange-me." For example, a person can use the site to offer Spanish lessons and find someone else to dig up his garden. Payment is made in an imaginary currency, which is credited to a virtual account. On another site, Snapgoods, which uses the motto: "Want it. Get it. Give it back," users can borrow vehicles and other items in the neighborhood for short periods of time and then return them.

On Nachbarschaftsauto ("Neighborhood Car"), car owners can turn themselves into minor entrepreneurs and earn a little extra money on the side by renting out their vehicles. Why should cars stand around, unused, for an average of 23 hours a day? "We believe that the traditional model -- owning your own car -- has become fragile, and that modern technology, coupled with social networks, will further support this change," says Nachbarschaftsauto founder Christian Kapteyn.

The site 9flats brings together people who want to rent out their private residential property for short vacations and others who are tired of the anonymous atmosphere of run-of-the-mill hotel chains. What brings them all together is the experience that the Internet is a place where they matter-of-factly exchange information, text or music. "It offers people a very practical way to recognize that you don't have to exclusively own things to be able to enjoy their benefits," concludes a study by the Heinrich Böll Foundation, which is aligned with Germany's Green Party. So why not share ownership? All of the many "social" Web offers would bring together people into a new, rapidly growing relationship economy, which is driven by the principle of reciprocity: Help me and I'll help you.

Changing Consumption Habits

Sociologist Harald Heinrichs has studied, for the first time, the extent to which the concept of the "sharing economy" is already being applied in Germany. "These alternative forms of ownership and consumption stopped being a niche phenomenon a while ago," says Heinrichs, an expert on sustainability at the University of Lüneburg in northern Germany. He assumes that the sharing economy will continue to develop, "because particularly younger people, who use social media intensively, seem to have changed their consumption habits."

In his latest study Heinrichs concludes: "Shared consumption, in the sense of common organizing and consumption via the Internet, is practiced by 12 percent of the population." This share could grow, partly because enthusiasm increases as the age of target groups declines.

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1. Hometown Money: print your own barter cash
metroeco 01/12/2013
We've traded millions of dollars of Ithaca (New York) HOURS since 1991, among thousands of residents and 500 businesses. Interest-free loans up to $30,000 have been made, and grants to 100+ local groups. The book "Hometown Money" explains step-by-step how to start and manage community cash. http://www.paulglover.org/currencybook.html
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