Dec 08 2020

The variety of renting and perspectives for furniture

It's not that we don't know about renting or that we don't already use it ourselves. But do we really know all the options? And what prospects do business models with furniture rental offer? Four perspectives on the topic of rental - on the history of renting, on another industry, across the pond and, of course, on furniture.

What began with houses and flats...

Renting is an integral part of our lives today. The origin of the term goes back to the 8th century and has experienced many changes in content and adapted definitions up to now. In the vocabulary lexicon of the University of Leipzig the word "rent" is currently found in the second highest category for use in texts. Remarkable.

When the first house or the first flat was rented is not historically recorded in a reliable manner. The first legal regulations on renting a flat in Germany date back to the time of the First World War, initially still separate legislation. It was not until 1960 that it was successively integrated into the BGB.

Rental offers, in addition to house and flat, have become established over the last decades and are constantly growing - in number and variety. In 1988, the first cars were rented in Berlin - the birth year of CarSharing. Bicycle rental has also developed into a variety of variants and digital bike-sharing systems.

But what about other areas? What rental models are there, for example, in the fast-moving fashion industry and what can the "Möbelians" adapt?

Historically, the rental market began with houses and flats. © Canva

From designer collections to "virtual" wardrobes

Starting with costume rental, through evening and wedding wear, children's fashion, renting has now also arrived in the everyday and luxury segments. The US company Rent The Runway, for example, has developed into a "Lighthouse" as a rental platform since its foundation in 2009 and today offers fashion for rent in collaboration with over 650 designers, including Gucci. 

What began in the USA has now also established itself in the D-A-CH region. The range of services offered by the online platforms ranges from the rental of third-party collections and own designs, to second hand and peer-to-peer exchange in shared "virtual" wardrobes. 

All providers are united by the principle of the subscription system - Subscription. The differences lie mainly in the rental intervals and number of possible rentals, the service packages include logistics and cleaning of the products.

In addition to multiple use, sustainability in rental is increasingly defined by the use of the materials and thus makes its contribution to the development of fair fashion. In the rental system, the product becomes a component of the service. Product as a service - a fundamental feature of the circular economy.

And also a clear plus in terms of building customer relationships - accompanying customers in their developments, recognising their changing needs and requirements and integrating them into new offers.

Also, the rental of clothing has now arrived in the everyday and luxury segments. © Canva

Furniture as a Service (FaaS) - Made in the USA again

The roots of furniture rental based on FaaS are again beyond the "big pond" and have existed for almost 50 years. The size of the country and the traditionally greater need to move due to professional and thus also private circumstances have led to new considerations and concepts in dealing with the use and ownership of furniture facilities. They have had to be managed from an economic perspective alone.

The areas of application are many and varied - from office furniture for classic company offices and coworking spaces to furniture furnishings for student residences, micro-apartments for temporary living and the individual adaptation of one's own home. Property inspections in furnished condition also offer much higher completion rates for estate agents - renting makes it possible.

The long success story of companies such as CORT demonstrates the advantages of Furniture as a Service. It is more than just the sale of products, but also includes elements such as relocation organisation (re-location) and support in the search for a property or flat. The own products as part of the complete range of services from A to Z - more customer proximity is not possible.

Rental Hybrid - the next step

Sometimes it's not the right time to jump, but definitely the right time for the next step. For the furniture industry - from producer to dealer - the option of the next step is to build hybrid business models based on sales and rental. 

This does not require two engines or dual structures, as is the case with hybrid cars. If you want to sell, you must have the right (good) products and know your customers and their needs. The same principle applies to rental.

Certainly, some processes will have to be adapted and redesigned in parallel. But in the end it is the output variables of products and customers as well as the consideration of the need for adaptation of marketing and organisation that are the starting points for implementation.

Sales as a basis, rental as a stabiliser and growth factor - the examples mentioned show learning lessons and the economic advantages for the furniture industry. How exactly does Rental Hybrid work and how does it become a Product as a Service? More soon and here.

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Andre Hempel standard.toggle-bookmark Senior Management
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