The Changing Face of Retail: The Rental Revolution is Upon Us
The sharing economy has rapidly transformed many industries, with ridesharing and home sharing becoming commonplace. Now, the rental revolution is taking on retail, with the emergence of UK businesses and marketplaces which allow consumers to rent, rather than buy clothing and apparel, accessories, electronics, furniture and more. Research shows that the retail rental market is poised for massive growth in the coming years across the UK, with many major brands such as John Lewis and IKEA already exploring the many opportunities that rental delivers.
According to a report by the Market Research Network, the online clothing rental market was valued at USD 1.19 Billion in 2020 and is projected to reach USD 2.29 Billion by 2028, making it an upward trend that retailers can’t afford to ignore.(1)
Convenience and Affordability Are Driving Adoption
Why rent when you could buy? Well, the (mostly) millennials and Gen Z who are behind the trend cite cost-effectiveness, sustainability, and convenience as major factors behind fashion rental. It’s a no-brainer for influencers who want that Insta-worthy snap, or the perfect capsule wardrobe. Brands like Rent The Runway, MyWardrobeHQ and By Rotation give customers access to designer brands and trends that they might otherwise not be able to afford, not just for special occasions, but for everyday wear too.
Renting provides variety, flexibility, and affordability, compared to buying new items for each use. The rise of rental reveals changing mindsets around ownership, especially among millennials and Gen Z.
The rental retail revolution extends beyond fashion
Thought the rental trend was all about fashion? Fortune Business Insights values the global furniture rental service market size at $72.50 billion in 2022, projected to grow from $77.81 billion in 2023 to $142.91 billion by 2030.(2)
UK platforms like Fat Llama offer rental of tables, beds, kitchen appliances, and more for events, home staging, or trying out a product. Businesses such as Room Service By Cort offer longer term rentals that allow people to rent the furniture to fit their space – great for renters who wish to design a space temporarily, but don’t wish to be left with furniture they don’t want or need when it’s time to move on. The temporary nature appeals to those not ready for long-term commitment to big purchases. While furniture rental is already commonplace throughout north America and continental Europe, it’s a trend only just taking off in the UK, with plenty of opportunity for growth.
Electronics rental is another growth area. With frequent model changes and launches of new smartphones, laptops and gaming consoles, renting provides access to the latest gadgets without the constant investment of buying to keep up with the latest model. UK company Grover lets users rent tech products on flexible monthly plans, with customers able to swap devices as new releases hit the market. Grover saw business rise over 150% in 2021, as demand increased.(3)
Sustainability and access trump ownership
Sustainability is a major factor influencing the rise of rentals. The Ellen MacArthur Foundation estimates clothing utilization could increase by 80% with wider clothing rental adoption. Renting extends product lifecycles, reduces waste from unused items, and promotes circular models.(4) Retail rental also enables the sharing of expensive purchases. As climate consciousness grows among UK consumers, the eco-benefits of access over ownership will further boost rental volumes.
Opportunity for retailers with the rental trend
The rental market addresses key consumer needs around affordability, convenience, flexibility, sustainability, and novelty. Adding rental services alongside traditional sales can offer a new revenue stream that retailers had not previously considered.
Rental kiosks and services within stores, as well as digital channels, will be the future for visibility and convenience, part of the retail experience of a new era. And of course, a seamless rental experience for both parties will demand data-driven operations, advanced logistics, and strategic pricing for the optimal user experience.
Personalisation and delivery will be critical
UK retailers FatFace, Oasis and John Lewis have already experimented with clothing rental schemes. Meanwhile, disruptors like HURR are exclusively focused on the fashion rental market. Traditional retailers cannot ignore this shift in spending and consumption. Though its early days, it seems like younger generations in particular are happy to trade access over permanent ownership. As attitudes advance, UK retailers must adapt models to align with this preference for rental access over traditional acquisition.
Rental will play a role in retail's future
The message is clear: the future of retail will be, in part, driven by rental marketplaces. While furniture and electronics rental in the UK is still to fully take off, fashion and apparel rental is already making significant waves.
UK companies that can incorporate robust rental services and circular models will gain an advantage in attracting modern, conscious consumers. The time is now to tap into this rapidly scaling business model and offer British customers flexible, affordable rental options that are available on demand.
References:
- https://www.linkedin.com/pulse/global-online-clothing-rental-market-size-unleashing/?trk=article-ssr-frontend-pulse_more-articles_related-content-card
- https://www.fortunebusinessinsights.com/furniture-rental-service-market-106643
- https://www.pymnts.com/news/retail/2021/grover-brings-tech-rental-service-to-us/
- https://archive.ellenmacarthurfoundation.org/assets/downloads/A-New-Textiles-Economy.pdf