Technology as Primary Booster of Second Hand Economy

The Magic Art of Purging Your Apartment:
This past summer I read the popular book “The Life-Changing Magic of Tidying Up” (yes, it was an exciting point in my life). It helped me to reframe my perspective on shopping and what I fill my home with. Now, I’ll never go to the extremes of this book, such as every day emptying my purse and thanking each item for the purpose it served me; “goodnight wallet, goodnight keys, goodnight moon”. Why won't I adopt these habits? Well, because I don’t want to seem entirely crazy and die alone. However, the book did inspire me to throw away and donate over 40 large bags of “stuff” when I moved out of my apartment before relocating to Italy. I think I personally spiked the Canadian second hand economy by filling a good portion of the Queen St. East value village with my very fabulous things.

Not surprisingly, technology has blown me out of the water in terms of spurring the growth of the Canadian second hand economy. Earlier this year, Kijiji published "The Kijiji Second-Hand Economy Index -2015 Report". The objective of this study was to“paint a portrait of the second-hand economy by taking a closer look at Canadians’ behaviours relating to the sale and the purchase of second-hand products”. Here are some of the key findings of that report, including this table (on right, click to enlarge) which reinforces the emergence of online classified sites as a primary contributor to the extension of product life cycles in Canada.

The Canadian 2nd Hand Economy:
Annual sales of second-hand durable and semi-durable goods in Canada are now estimated to be $30 billion per year. The increasing popularity of classifieds sites such as Kijiji and Craigslist has played a big role in shifting Canadian consumer behaviour. 10 years ago it would probably seem both strange and dangerous to meet someone who you connected with online to buy a pair of concert tickets or used piece of furniture. Now, the majority perspective has shifted to accept this as a regular practice. This social change can also be seen in the growth of similar online communities such as Freecycle or Bunz Trading Zone which provide individuals with new ways to donate unwanted items and with opportunities for community building through currency-free trading.

Environmental Impact:
According to the Global Footprint Network, Canada ranks fourth worst in the world in terms of ecological footprint. One solution to reversing this trend of wastefulness is to increase awareness of the benefits to the environment of reusing rather than discarding goods. By prolonging the life of goods, consumers can maintain a high standard of living while reducing harmful impact on the environment.

Economic Impact:
There has been an increase in purchasing power because consumers now have more choice. With this increased choice and ability to find alternative items at a reduced cost, there is an increase in disposable income. This provides more individuals with the ability to spend money on things that are not considered necessities, such as entertainment. So although some might see the 2nd hand economy as taking away from the country’s economic growth, it’s actually allowing for that saved money to be injected into other (possibly less frequented) areas of the economy. At a time when the Canadian dollar is still struggling, the alternatives presented by the second hand economy have allowed Canadians to either save money, make money and/or continue to make their purchases at a discount.

A Real Economists Perspective
I reached out to Professor Theodore Tolias who teaches Economics and Policy/Strategy at the Schulich School of Business in Toronto, Ontario to get his take on this topic. I asked him whether or not he felt the growth of the second hand economy was positive for the Canadian economy. Here is what he had to say:

“The second hand economy and barter exchanges are good because they offer more choice and make for an economy that is more responsive to needs and preferences. These kinds of 'unconventional' exchanges are often seen as responses to economic adversity and poverty or some short of 'solidarity economies'. They can also be seen as disruptive social innovations enabled by information technology and driven not only by economic need but also by a growing environmental awareness critical of 'consumerism' and of the conventional idea of 'economic growth'. To the extent that 'information' replaces 'money' as we know it and environmental and economic concerns are pressing, second hand and barter exchanges will continue to grow and for a good reason.”
- Professor Theodore Tolias, Schulich School of Business

To Sum it Up
I feel that our increasing use of websites, apps and social networks to trade, sell and buy from our surrounding community members is yet another way that the growth of technology is significantly impacting our lives. Technology and digital social networks have given us the opportunity to discover alternative purchasing, allowing us to save money and make a positive environmental impact. Further making me believe technology is a beautiful thing.