The Next Trend Rental Retail?
Sounds super crazy but the rental retail market is booming and expectations are it will surpass $350 billion within the next few years. Online has definitely changed the way many view shopping as buying is not the only option.
A close friend of mine who I have known since my army days always seemed to have these whacky ideas that he believed would happen. Back in 2004 and 2005 he owned a courier company with the main aim of creating an online platform for retailers selling online. Retailers weren't interested like they are today, but he never gave up on that idea.
That idea today is everywhere and only now is his company benefiting from his insight. Talk about a long road with bad timing with ideas as he was right ,but just the wrong timing being way too early. Many of the business ideas we have are not wrong and could be fantastic if only the timing is right.
I did ask him where his head was now and he is all over the renting/leasing idea. My first thought was with cars or houses but his head is on the market turning to leasing everything we use including services.
His head was spinning at the time as his company had to sign a two year lease for a photo copier/printing machine which he felt was ludicrous. A month to month would be more ideal and serve his business needs more as he may need a bigger machine in 3 months time or another model that offers more.
In the Netherlands, IKEA is offering students the rental of a bed, desk, table and chairs for a monthly fee of up to 30 euros ($33.68), while in Sweden and Switzerland it is looking into providing office furniture to companies.
This is already happening and had no idea it was something.
The printing machine is just the tip of the iceberg in his mind however as he feels this could roll out into computers/ gaming machines/ cell phones etc. On the services side why not have a leasing contract for a plumber or an electrician for the house that would cover any repairs required when needed.
I thought his idea made sense even though it is a little out there as buying something straight up is normally the cheapest way. Todays society is changing though as having the latest and best thing is what most people want. Why tie yourself down to a lengthy contract when you could have a monthly deal offering you that very option.
I was looking at stats tonight and funny enough he is right as many of the millennials are renting more items than we could ever imagine. What type of kids have we created as this is all on the current generation. Who would even considering renting every day clothing as I for one wouldn't yet people are.
6 items per month for $88 doesn't seem that expensive except you never own them.
Nielsen reported that over 70% of millennials were prepared to pay more for convenience and why this market is going to only get bigger. Think of babies and gadgets we buy when they outgrow them so quickly. Items that cost over $1000 and you only use them for 6 months like SNOO which is a baby bed for new borns.
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These SNOO's rent for $112 monthly and you only need them for a few months maybe 6 months at most so it does start to make sense.
I think it will take me a while to get my head around this shift in rental retail and if I saw the right deal I may be tempted, but then again it would be a big maybe. A laptop most likely not as so much personal information is stored on it and a recovery expert could possibly recover info you thought was once gone.
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Isn't some of that what you already do with insurance? At least for the repair type stuff. The whole copier thing has been going on forever over here. We buy ours outright I think. Then every five years or so we upgrade.
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I like that you can rent tools at the auto part stores, It doesn't pay to buy a tool you only prob need once. If I were twisting wrenches for a living again, then I could see the value in buying.
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Yes as that makes sense financially as wrenches don't get any upgrades through development. I can see both sides on cellphones as why have contracts for 2 years when monthly would be better not tying you in. Networks would work harder to keep you and there would be better deals all round not ripping people off. Happy New Year and hope things go your way with whatever you are doing.
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