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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

Frichti: Quick commerce and food tech

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.

The hot trend that has reached all product categories: renting rather than buying.

 

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.

This service, launched in Berlin, makes it easier for consumers to acquire clothes from its “Conscious exclusive collections” for a set period. With this action, which is due to last throughout this year, H&M wants to contribute to recycling and reusing, but also to motivate consumers to embrace these kinds of actions, which are beneficial for customers in terms of savings, and for the brands in terms of cutting down production expenses and for the planet.
  • 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.

Decathlon, for its part, has created a monthly subscription system that gives the consumer access to a range of products without having to buy them. Decathlon studied the behavior of 70 volunteer families to measure their interest in such a system. They were offered three subscription formulas: 20 euros per month for a maximum of 400 euros of equipment, 40 euros for a maximum of 1,000, and 80 euros for a maximum of 2,000.
The subscription cost the families six times less than if they had had to buy the products. Concerning Decathlon, this model is potentially three to ten times more profitable than the current model. The subscription system allows consumers to try different products without having to keep them forever, and the company emphasizes the positive impact this initiative will have on the environment.

Retail in vivatech 2022:  A glimpse of a future without human connections

    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.

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    Sources:

    https://www.washingtonpost.com/business/2020/01/27/top-five-reasons-more-people-are-choosing-rent-rather-than-buy-home/

    https://stephanelarue.com/32-des-francais-prets-a-louer-des-appareils-multimedias-plutot-que-les-acheter/

    https://www.elle.fr/Societe/News/Louer-des-appareils-multimedias-plutot-que-de-les-acheter-une-option-qui-seduit-4031374

    https://www.cbnews.fr/etudes/image-louer-plutot-qu-acheter-tendance-lourde-70269

    https://www.sia-partners.com/fr/actualites-et-publications/de-nos-experts/le-retail-par-abonnement-un-veritable-levier-de

    https://www.cbnews.fr/etudes/image-louer-plutot-qu-acheter-tendance-lourde-70269

     

     

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