20.–23.01.2021 #immcologne

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The model for tomorrow?

Renting furniture instead of buying

We rent living space, cars and tools, and now we rent furniture, too. The sharing economy is constantly growing and, with it, the demand for rented furniture. This trend is primarily driven by young people who do not want to be tied down, but do not want to sacrifice their interior style either. How exactly does rental furniture work? What makes it so attractive? And which providers have already spotted the trend?

Renting furniture as a concept of Sharing Economy

The "rental furniture" offer currently seems to appeal above all to young, flexible prospective customers. Photo: La Miko on Pexels

The sharing economy: sofas and tables on a subscription

Minimalists strive to own only a small number of things. Rental furniture is simply the logical consequence of this philosophy. After all, we also hire cars and technology. Buying furniture can be expensive, and it ties the purchaser down. And who knows what will be on-trend tomorrow or where life is heading. Rented furniture, which can be easily ordered online, is enough for the moment.

Most furniture rental services operate on the same principle: A sofa, table or mattress is rented for one or two years. At the end of the rental period, the customer can decide whether to extend the contract, return the item of furniture or purchase it. A sum is payable every month during the rental period. The longer the rental period, the lower the monthly fee. A furniture subscription – with delivery, assembly, collection, and care and maintenance included.

Millennials prefer to rent

Rental furniture is primarily aimed at millennials, the generation born between 1981 and 1996. Compared to older age groups, where and how they work and live is much more flexible. If a better offer beckons, they pack their bags. Added to this are the growing numbers of fixed-term employment contracts and short-term leases, which make it difficult to furnish a home for the long term.

The shortage of living space in cities is also fuelling this trend: Young people are hardly buying any furniture because they simply do not have space for it. According to a US study, they prefer to spend their money on technology, clothing or experiences like dining out in a restaurant. Just 4.5 per cent invest in furniture. Sustainability, flexibility and keeping up with the trends are what matter to them. This

Challenges for the furniture industry

consequences of this. First and foremost, young people prefer to buy furniture online. It seems that it is no longer important for them to see the item in the store – if necessary, they can simply send it back. Having a strong customer orientation is becoming increasingly important: Customers want short delivery times, goodwill if they do not like their purchase, a constant stream of new trends and limited offers.

In addition to this, brand loyalty is declining: Young people in particular place more value on individuality. They choose the best product for them; the brand is less important in their decisions. This trend poses a huge challenge for companies: How can they create customer loyalty when customers are so elusive?

Rental furniture seems to solve part of this problem: The monthly subscription with a minimum term represents a new kind of commitment – all while promising a high level of flexibility. Customers have access to a large range of furniture without having to own it – just like streaming services or car sharing.

A study by Connox in 2019 found that just 2 per cent of participants had rented furniture, but 48 per cent would do so. So, the willingness is there, but not enough people are aware that the option is available. What is needed are major players who are willing to enter the field. They can then use their market presence to raise awareness. Two big names have already made their first forays into rental furniture: the mail order company Otto and the furniture manufacturer IKEA.

Millennials rent furniture from Startups

The younger generation values flexibility and prefers to order furniture online. Photo: Ketut Subiyanto on Pexels

Rental furniture: the first trials by IKEA and other big players

Otto has been renting electrical appliances for several years under its Otto Now brand. It offers an extensive range of products: electric scooters, coffee machines, exercise machines and smart robot vacuum cleaners. For a while, tables, chests of drawers and more besides were also available for hire. However, the rental furniture is currently no longer available (correct as of September 2020).

The Swedish furniture chain IKEA launched several trials for rental furniture schemes in 2019. A range of furniture and various packages were offered in Germany, the Netherlands and Switzerland, among other countries. Renting is said to be firmly embedded in IKEA’s corporate strategy, but the project is still in the planning stage.

Rental furniture ensures flexibility in furnishing

Rental furniture ensures flexibility when the demands on the furnishings change. Photo: cottonbro on Pexels

Rental furniture as a new business idea

The idea of renting furniture has also inspired start-ups to enter the field. Two young women from Berlin launched a rental service for designer furniture under the name Lyght Living. The start-up was bought out by Furniture Leasing and is now known as Lyght Living Furniture Leasing.

Roomovo and Readymade were not quite as successful. Both of these start-ups launched on the market in 2018, but they ceased trading after a relatively short period.

Does this mean that the trend for furniture sharing is just hot air? Despite the growing willingness to rent instead of buying, the market for rental furniture in Germany does not seem to be lucrative yet. But if we take a look at other countries, we can get a sense of the direction that things are moving in.

An international perspective

Mobility has been a major issue in the US for a long time. People go where the work is. So it is no surprise that companies like CasaOne, Feather and Fernish are successfully renting furniture. Young people in Germany are similarly mobile, question established structures and value flexibility, individuality and sustainability. They are tomorrow’s customers, and renting furniture could become the norm for them.

The coronavirus pandemic is also triggering changes: Millions of people across the world have sought refuge in the home office, and many of them would like to continue working from home. The Japanese lifestyle chain MUJI has recently responded to the trend: It has been renting office furniture for home use under its new IDÉE brand since June 2020. A new concept that could also take off here in Europe.

Read more about the latest trends in the furniture and interior design industry in our article “ How will we live in the future? ”.

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