The hot trend that has reached all product categories: renting rather than buying.
Every other Wednesday, h/commerce provides in-depth analysis of the most impactful trends reshaping retail.
The idea of acquiring a good or a product on a temporary basis has long been linked to the consumption of real estate. A few years ago, the trend par excellence was to live in rental properties for a while and eventually acquire a house.
Factors such as the environment and the constant instability of the global economy have completely changed our consumption habits and the way we acquire the goods we have available. As trends evolve, so does the consumption system. The circular economy has entered the market and with it the trend to rent rather than buy
Globalization may also be a factor driving this new behaviour. The current lifestyle of consumers is no longer the same. Especially for those who are now entering the labour market: Gen Z. Age of entry into the labour market is later than before, jobs fluctuate much more regularly, and it takes longer to stabilise in a particular place.
According to Freddie Mac’s 2019 housing survey, nearly 40 percent of renters report that they are unlikely to ever own a home — up from 23 percent two years ago — and 80 percent say renting better fits their current lifestyle. Young professionals who have just moved to a region and baby boomers who are downsizing are particularly interested in this level of flexibility. Many want a minimalist and simple lifestyle, with the ability to move or travel with little notice.
Rental of means of transport : electric bicycles, electric cars and electric scooters
There is also a growing trend towards the rental of electric means of transport. For a few years now, there is a rise in the use of “public” electric vehicles in big cities.
Customers have realized it is more comfortable to rent a car or a bicycle for commuting to work or moving from one place to another and then leave it in the desired location, than going out with their own cars.
There are some mobile applications such as share-now (cars) velib’, velo’V (bicycles) in France that show how economic this action might be. No care insurance, no taxes, no garage expenses.
The positive impact on the environment is an issue worth highlighting. If more and more citizens start using this means of transport, pollution emitted by non-electric vehicles will be greatly reduced.
Renting multimedia products is also becoming a trend
As mentioned above, the consumption pattern has changed, and the concept of “renting” has gone beyond housing and cars.
Consumers can now rent multimedia products. One of the reasons influencing this trend is the advent of inflation and the forecast of an economic recession that may hit the world’s economy to a large extent.
A survey carried out by Ipsos on 1001 people aged between 18 and 54 in France concludes that 32% of French people (interviewed) are willing to rent electronic devices.
While this model allows them to use a product on an occasional basis (14%) and to test a product before a possible purchase (13%), it mainly allows them to “reason out their consumption of new equipment” (58%) and to “save money” (46%).
Renting multimedia products or electric bikes, somehow gives consumers more freedom, as they don’t need to keep these devices for life but have the flexibility to amortise them when needed.
Renting fashion, working materials and streaming entertainment
We are seeing more and more sectors joining this trend of rental purchasing. We see it in the cinema and television sector; where now few people buy films or series, they rent them by paying a monthly subscription on streaming platforms such as Netflix, HBO, Prime Video….
- FASHION RENTING
In addition, there are fashion retailers that allow the rental of clothes for a certain period. We note a noteworthy example that originated in the United States and that has recently arrived in France: Bocage. This brand which specialises in the production and distribution of footwear, allows the consumer to consume less, but better. The firm offers customers the possibility of renting a pair of shoes for specific situations (weeding, for example).
In October 2021, H&M launched the Blockchain-Based Clothes Rental Service in collaboration with Lablaco’s Spin platform.
- MATERIAL RENTING
Large retailers such as Leroy Merlin or Mr. Bricolage, also offer the possibility of renting equipment for certain jobs and returning it once it has been used.
Why is it interesting?
We are gradually observing that having the same product throughout its life cycle is a declining concept; the current trend is to have one product for as long as the consumer wants it.
This has certain advantages, including the savings the customer makes by renting a product, enabling some of them to access products they would not otherwise be able to buy.
On the other hand, the fact that products are depreciated and reused reduces to a great extent the negative impact of the constant production of goods on the environment.
In addition, retailers have seen the business case for adopting this practice into their strategies. It significantly reduces the costs of production, distribution, and all stages of the supply chain when new products must be created.
The leasing of more and more products has gradually transformed the market, from ownership to experience.
Subscribe to our monthly newsletter covering the hottest retail topics. Each newsletter is part of a collection of thematic reports that aims at providing keys to understand new trends and retailers’ strategies.