AIN’T NOTHING GOING ON BUT THE RENT
Sometimes it can feel like there’s too much news. This week alone has seen new developments in the ongoing Debenhams saga, a boardroom coup at Superdry, falling sales at Boots, and Philip Day launching a takeover bid for Bonmarché. It is, to quote a journalist of Paperclip’s acquaintance, “a competitive news environment”.
So we’ll forgive you if you missed AO.com’s announcement that it is trialling a £2-a-week washing machine rental scheme. It is a subscription service – so no usurious APR or extra charges – and that in itself brings significant benefits; for too long, operators such as BrightHouse have used the rent-to-own model to charge lower-income consumers over-the-odds for basic household goods. The disruption of this scheme causes will be a good thing.
AO.com is banking on being able to leverage its delivery network and buying muscle to reduce costs – and if that means a better deal for consumers then so much the better – but the initiative has wider implications too. Is the much-vaunted ‘sharing economy’ about to go up a gear?
There remains a suspicion that the rise of the sharing economy is more theoretical than actual. Uber trips are in truth replacing bus journeys, not car ownership. There’s very little real-world difference between songs bought outright and those being streamed via Spotify. And isn’t Airbnb just a modern interface on an age-old marketplace?
If renting-not-buying is ever to be widely adopted, washing machines are precisely the sort of product – used daily, but a significant purchase – that will be at the vanguard of the shift. The theory that millennial lifestyles make renting more attractive is about to be tested; if AO’s scheme is a success, we can expect the range of available products to expand, and other operators to enter the market too.
There are reasons to be sceptical, and we have been here before – many readers will remember a time when every high street was home to a branch of Radio Rentals – but there does seem to have been a shift in consumer attitudes. Think about how many people you know lease rather than own their car, and you get a little insight into how mindsets are changing.
This leaves the question of how retailers will need to adapt to a world of renters rather than buyers – how deep a change will depend on how widely renting is embraced. Big-ticket items seem sure to have a rental market. But will richer people embrace rental as a way of regular upgrading? Will AO eventually stop selling appliances altogether and just focus on leases? Will handbag rental become more widespread as people seek to freshen their look? And clothes? Will “retailers” even be the best names for the companies that thrive, or will they be more akin to finance houses with logistics operations tacked on?
The implications for retailers are at the same time huge and unknowable, but any shift towards renting will have a profound impact on the shape of the sector. The successful retailers will be the ones that shift to give consumers what they want, whether that’s in exchange for a one-off payment, or for a reasonable monthly fee . . .Go back to category