Why buy when you can rent? When it comes to the housing market however, not everyone agrees (even though there is nothing wrong with renting!). Renting things like clothes, tools, outdoor gear and electronics are making more and more sense to the conscious consumer living in today’s sharing economy.
“The future of stuff is shared or rented. Instead of having to purchase their own items, consumers are looking for ways to rent or share. The new approach to stuff has numerous benefits, including lower costs for consumers, a large reduction in waste and a larger variety in rented items.”
There are a growing number of startups forging new rental marketplaces for luxuries like boats, extra bedrooms, campgrounds or backyard spaces, calling it the sublet economy. Everything you own can become a source of extra income, and everything you want to rent can be leased from a friendly stranger. This enables the world to share resources, and give each person the power to become a more successful entrepreneur.
When buying goods, the most influential factors that go into the decision making process are convenience, efficiency and affordability. That being said, it should come as no surprise that rental purchasing is beginning to dominate the economy.
“Now, the rental economy is everywhere, and for everyone. There are Airbnb-style marketplaces for cars, for garage storage, for private jets. You can rent someone’s bed for a midday nap, or even take a dip in someone’s pool.” Arielle Pardes
Lending used to be a privilege for those in the circle of trust. Now, with more people opening their doors to strangers, companies need to be prepared to open their doors up to the idea of renting as a complimentary addition to their retail stores. Perhaps used as incentive to purchase in the future (try before you buy), or as an alternative method for income that follows the shift in current consumer behavior.
Today we see mainstream retailers – everyone from Home Depot, H&M, and Urban Outfitters, to Banana Republic and Lowes making the shift and taking their chances with rentals.
The way things are heading, renting could become the future of retail – at least, that’s what the numbers and figures reveal.
The Wall Street Journal reports, according to GlobalData Retail, the rental apparel market has been steadily growing by more than 20% each year, and that excludes costume rentals! In 2018, the market was valued at about $1 billion and is projected to exceed $2.5 billion by 2023.
Recognizing a market opportunity, third-party companies like Rent the Runway, Ruckify and Le Tote are emerging to help both small and larger retail stores enter the rental market.
Thanks to a mass surge in online purchasing, we have entered a time where retailers are struggling to keep shoppers coming into their storefronts. Getting into the rental business, and doing it successfully, involves being careful not to discourage shoppers from visiting stores or actually purchasing items online, but offering an alternative that involves less commitment on the consumer side that can still be done from the comforts of their own home.
“The risk is rental services could take spending away from traditional sales in a sector where changing shopping habits and falling prices have nearly halved the percentage spent on apparel by the average U.S. consumer over the past 30 years”. Sonya Dowsett and Melissa Fares Financial Post
The hope is that once a customer falls in love with an item via a trial rental run, they’ll realize that they can’t live without it (or something similar) in their life.
Or, they enjoy the rental experience offered by a company so much that they become a repeat renter anytime they need a similar product. Many rental services offer both options, and often allow you to put a portion of the amount spent on the rental towards its retail price – a sort of “rent-to-own” notion. The idea, of course, is for rental to complement traditional retail channels.
Studies have revealed that the millennial set prefers renting to owning, well, pretty much anything.
When it comes to their wardrobes, millennials have become more “woke” to social justice and sustainability issues and are very aware of the environmental impacts of consumption. Not to mention, the younger generation generally value experiences over material things when deciding where to spend their income. Renting is just one part of retails radical shift.
The Marie Kondo craze has inspired an entire generation in decluttering as minimalism becomes more than just a trend.
Whatever the case, the bottom line is that consumers are no longer closeted when it comes to choosing to rent their clothing, outdoor and sporting gear, tools, equipment, etc., or turning to second-hand options. Rather than frowned at, it’s become savvy consumer behavior on behalf of both shoppers and sellers living in this sharing economy.