Rental has been a growing area of retail in recent years, particularly in fashion, where sustainably-minded shoppers are embraced the opportunity to have a constantly refreshed wardrobe without contributing to the world’s waste problem.
Fashion retail has become business. Rent the Runway, one of the first rental fashion firm’s set up in 2009, even launched on the stock market in New York last year in a $1.7 billion IPO.
Mainstream fashion retailers including H&M, M&S and Selfridges have all vied to get into this fast-growing part of the market.
However, the rental revolution is expanding beyond fashion. Both sports giant Decathlon and consumer tech specialist Music Magpie have launched rental services in the past month.
KPMG UK head of retail UK Linda Ellett believes there is a big opportunity across rental.
“Many consumers are increasingly factoring sustainability into their purchasing considerations and are looking for products and brands that align. This of course only works if the retailer is demonstrating a good re-use of rental products,” she tells Retail Gazette.
But, where outside of fashion, will shoppers look to rent, not buy, products and what are retailers doing to serve those customers?
Furniture and homewares
Shoppers, who have been increasingly homebound over the past two years, have been spending big on their homes during the pandemic.
In fact, homewares has become more like fashion for consumers, with many making “feel good” purchases based on the latest trends.
Rental offers an opportunity to regularly refresh the home, in a sustainable way and without breaking the bank.
It also is a practical, and cost-efficient for those renting their homes to furnish them. It means those who find themselves regularly moving from place to place don’t have to drag their belongings around.
Retailers have been quick to embrace the opportunity of rental in home and furniture with Wayfair, John Lewis, Harth, Fat Llama, Ikea, and Muji all offering rental services to shoppers.
Sportswear and equipment
Whilst this is similar to rental fashion as customers are wearing what they’ve ordered, renting activewear is a new venture for retailers.
While some customers may be put off by pre-worn activewear – which other people have used for vigorous workouts – Ellett says the ability to rent sportswear offers consumers the opportunity to try new sports without needing to commit to the cost of owning associated gear.
“For the retailer it’s a way of creating a new revenue stream, gain new customers, and sell more goods to them as they develop a passion for that sport,” she added.
Last month, sportswear retailer Decathlon revealed a partnership with fashion rental platform Hirestreet which will see it rent out sports and activewear to customers.
It marks Decathlon’s first rental collection, consisting of an exclusive ski-wear and outerwear edit, with 18 different styles of high performance ski and hiking jackets & trousers for women, ranging from sizes: 6 to 16.
“Renting our textile products is a new venture for us, and one that we’re excited to be sharing with Hirestreet,” Decathlon rental manager, Sharon Poulter said.
“It is another way in which we are making sport more accessible – through convenience, price point and flexibility, all while reducing our impact on the planet.
“Renting ski wear was an obvious starting point, but we expect to expand our offer in the future to make getting active even easier and more sustainable.”
Expect other retailers to follow suit, particularly on the equipment side of things.
Music Magpie, which specialises in selling refurbishment consumer technology, started a rental subscription service for smartphones in 2020 and revealed last week that it is expanding the service into new categories such as tablets, games consoles and computers.
The rental service seems to be taking off. In November last year, the service had 13,500 active subscribers – an increase from the 7,500 subscribers reported at the end of July last year.
Monthly rental fees begin at £8.99 per month for a refurbished phone, increasing to £11.99 for a games console and £19.99 for a MacBook.
The service is likely to appeal to cash-strapped shoppers that want high-tech products but can’t afford to make a big purchase outright. A MacBook costs close to £1000 to purchase.
Rental is an area that other electricals retailers have dabbled with Ao.com launching a service back in 2019. The retailer promised to offer washing machines from as little as £2 a week.
Little has been heard about this offer since it launched but as the UK is facing a cost-of-living crisis, now could be the time when such services could thrive.
The rise of rental goods and a circular economy will only continue to gather pace as sustainability becomes further embedded as a business and consumer need over the coming years.
But, it’s not all about sustainability. Rental could also appeal to those that can’t afford to buy products outright or who only need to use products for a limited amount of time.
There is ample opportunity – expect retailers across the spectrum to pounce on it with their own rental services.