The automotive rented for the final touring trip, the night costume that allowed us to go to the tremendous elegant ceremony with out spending an astronomical amount of cash, the very costly tools we would have liked to shoot our quick movie, the ergonomic chair we used the time we had been caught removed from dwelling due to the pandemic and we needed to work remotely – and our again nonetheless thanks us.
These are simply a few of the doable use circumstances of the rental economy, which remains to be too usually confused inside the nebulous universe of the sharing economy. In this publish, we’ll attempt to make order amongst the human and skilled occasions that all of us expertise with rising frequency – and we’ll attempt to outline the boundaries of the market that revolves round the many facets of rental. Let’s begin with a couple of clarifications.
What is the rental economy?
Let’s begin from the starting: what distinguishes the rental economy from the sharing economy? To reply this query, it’s initially important to acknowledge the two classes to which the digital platforms of the so-called sharing economy belong.
- On the one hand, there are types of sharing of products and providers, actual materials, and immaterial exchanges which are primarily freed from cost (the excessive case is that of the reward economy): there isn’t any financial transaction however solely a sharing of experiences or data that enables customers to narrate, take part in the similar good, and optimize prices in a perspective of eco-sustainability
- On the different hand, there are business actions that supply a service in alternate for an financial consideration: the platforms are then configured as a spot the place providers and merchandise are provided to fulfill a selected want of the client, by customers who behave like actual entrepreneurs
And now again to the query of the title: sure, the rental economy represents the new frontier of the sharing economy as a result of, the truth is, what we name the sharing economy is usually not primarily based on free sharing in any respect, however on rental. For this purpose a extra appropriate expression would maybe be “pay as you go,” the place the time period “rent” (like that of vehicles) remembers the idea of cost for the providers provided signifies that the provider of this provide isn’t all the time and solely a structured firm, but in addition a single non-public particular person.
Rental in the Italian context: fixed development
And in Italy? While it lags behind most overseas nations, the use of rental machines and tools, capital items, work programs, and even enterprise models is now a acknowledged necessity in most sectors. In this sense, the contribution of technological improvements, financial contexts, present traits, and the evolution of the sociological context that has been pushing in direction of a tradition of use moderately than possession in any respect prices, is key.
However, the Italian market nonetheless lacks a system of particular guidelines that may legally body the rental and the firms who’re entitled to supply it professionally.
So far, we’ve got described the context. Now, let’s shift the focus of the dialogue to the public and have a look at the causes which have allowed the rental economy to determine itself lately.
Secrets of success for the rental economy
In 2011, amongst the most influential traits that had been altering enterprise fashions and client habits at the moment, Mintel included totally different types of “rental.” Consumers had begun to guage whether or not it was price taking the danger of shopping for one thing – assuming all the obligations of possession, accepting doable upkeep actions, and the dedication of an usually appreciable monetary funding versus the different of renting the similar services or products.
In basic, there are totally different causes behind the option to hire, that are decided by the social and financial context, worth system, and the issues and preferences of various audiences. Let’s take a fast look..
The social and financial context: the want for perspective
According to Mintel, throughout the final recession (2007-2013), the adoption of non-traditional buying fashions apart from these of conventional buy accelerated. This was when the conventional goal of dwelling possession started to fall off the high of individuals’s checklist of priorities. In Great Britain, the so-called “renting generation” emerged in these years. In 2011, college students and younger professionals had been dealing with each day housing issues, a lot in order that 86% of them weren’t planning to purchase a home in any respect, as they may not afford it in the first place. Since then, in the UK, the state of affairs appears to have radicalized: millennials are renting, even for very lengthy intervals of time.
The hyperlink between financial uncertainty and housing hardship is probably emblematic of the correlation between the results of the sharing economy and austerity that Trebor Scholz mentioned in his article, “Platform Cooperativism vs. the Sharing Economy.” In 2014, Scholz got here to 2 conclusions:
- the shock waves of the coverage of proscribing consumption and eliminating waste (applied following the 2008 financial and monetary disaster) had deeply affected the sharing economy, serving to to remodel it into its present varieties;
- the sharing economy needed to be subjected to a extra cautious reflection earlier than it might be thought of as a method to ecologically sustainable capitalism (supply: medium).
If we take a extra vital perspective, there’s a rising demand for placing the sharing economy into perspective (supply: Putting the sharing economy into perspective, Koen Frenken, Juliet Schorb).
Cultural motivations: Rental as an eco-sustainable enterprise mannequin
Much weight has usually been given to the central intention that will transfer each shoppers and manufacturers engaged in rental: the want to behave responsibly in direction of the planet. Car sharing platforms now have fleets of hybrid or electrical vehicles in lots of circumstances, and clothes rental has loved some success as a result of it was perceived as a method to stem the environmental injury brought on by the vogue trade and to return assets to the group.
At the base, due to this fact, there could be environmental causes: renting would encourage the extra environment friendly use of all varieties of capital items, resulting in a lower in the use of pure assets and air pollution in the manufacturing of those items. This would permit shoppers to get well their funding and improve their wealth, even partially, in accordance with a mechanism typical of the rental round economy. In addition, a sharing economy, and to a distinct extent additionally a rental economy, would stimulate social cohesion.
Products and providers of the rental economy – use circumstances
At the daybreak of the sharing economy, manufacturers and establishments confronted with quite a lot of vital transportation points, particularly in an city context, inaugurated rental and sharing options. New York City’s bike-rental service shortly grew to 10,000 bicycles, whereas in France there was a growth in automotive sharing (supply: Mintel).
Although the present rental market remains to be in its early phases, the momentum in the sector over the previous yr is sufficient to threaten even the largest retailers, forcing them to rethink their enterprise fashions. Among the merchandise that buyers hire, along with vehicles and different technique of transportation (bicycles, mopeds, scooters, and many others.) we discover gaming programs, garments, instruments and know-how, and tools and equipment.
Women usually tend to hire furnishings, clothes, and jewellery, whereas males appear extra taken with renting tools and online game consoles. In any case, items are largely rented on an as-needed foundation (supply: World Economic Forum).
Lights and shadows of rental in the attire sector
According to GlobalData, rental in the attire sector might be price £2.3 billion by 2029.
Clothing rental, popularized by firms resembling Rent the Runway and celebrities resembling Gwyneth Paltrow and Ralph Lauren, till not too long ago was considered a sustainable different to quick vogue (an trade that, in accordance with a World Economic Forum report, generates 5% of worldwide emissions).
However, even when marketed as a doable answer to the environmental disaster of vogue, clothes rental presents a number of vital points which are nonetheless not totally clarified. Many are asking for a extra exact and articulated analysis of the penalties of those processes.
According to Dana Thomas, writer of Fashionopolis: The Price of Fast Fashion and the Future of Clothes: ““We should think of renting like second-hand shopping. [It’s] not something we do all the time, instead of buying our clothes and swapping out outfits nonstop, but on occasion, when the need arises, like proms [or] weddings.”” (supply: Renting garments is ‘much less inexperienced than throwing them away, The Guardian).
Rental and furnishings: the IKEA experiment
In 2019, Ikea started renting furnishings as a part of a broader effort to construct an environmentally pleasant enterprise, testing rental inside its inexperienced and social accountability initiatives.
Starting with workplace furnishings resembling desks and chairs for company prospects, IKEA additionally plans to hire total kitchens. This technique, which we may consult with as “leasing,” is a part of an natural effort to advertise providers able to extending the lifetime of a product, with a view to designing and promoting items that may be repaired, reused, recycled, or resold. An progressive “circular model,” in the phrases of Torbjorn Lööf, CEO of Inter Ikea (supply: Kitchen for hire? Ikea to trial leasing of furnishings, The Guardian).
Digitization and rental: the instruments for constructing a helpful relationship
If we’ve got used the time period “digital platform“ a number of instances – in the sense of {hardware} or software program infrastructure for the distribution, administration and creation of digital content material and providers – it was no coincidence: the sharing economy, and due to this fact the rental economy, has turn into established, regularly buying an more and more exact construction by means of the use of new applied sciences.
And if, because of the proliferation of apps on our smartphones, acquiring (or providing) what we wish for brief intervals of time has by no means been so easy, it’s good to keep in mind that the sharing economy, the reward economy, and the rental economy, which as we speak exists in technically superior manifestations in quite a few packages and functions, really has very historical origins.
The turning level: the systematic and strategic use of digital know-how
The turning level in the current historical past of the sharing economy – inside which the rental economy is creating – comes with the mass adoption of latest applied sciences, which permits the rental economy to broaden additional.
Digitization makes a variety of transactions easier and cheaper. We expertise this every day with rental, lending, and sharing platforms, which permit us to have a clear and concise overview, in actual time, of the availability of assorted items, and to make reservations and funds simply and instantly. This offers us entry to a variety of merchandise and providers with out having to purchase something or being tied into long-term contracts.
One instance out of all, repeatedly cited, is that of Airbnb, which in the rental sector exploits the chance of easy, quick, and theoretically frictionless connectivity: vacationers can hire a property or a room wherever and anytime with only a few clicks.
The danger of depersonalization of the brand-client relationship
It can nonetheless occur as we speak that some rental service gamers, in an effort to achieve a aggressive benefit, are inclined to focus predominantly on value leverage. But focusing virtually completely on comfort, providing limitless entry or hourly charges, can result in the temptation to delegate rental features fully to digital instruments. The danger right here is to lose sight of what needs to be the primary goal of any model: constructing a helpful relationship with prospects.
Being versatile – which is certainly one of the key elements in succeeding in distinguishing oneself – should not refer completely to a nonchalant and in some methods irresponsible use of the new instruments. It can’t be the solely high quality during which the rental firm should make investments. If digitization represents a unprecedented growth alternative for the total sector, the revolution that adopted digitization solely partially offers with know-how.
Digitization to allow a steady dialog with the buyer
In rental, the want for personalization can’t be ignored: the user-consumer have to be fastidiously recognized as a result of rental is nourished by a continuing dialog with the varied topics who oversee worth all through the provide chain and who information the buy selections of providers by bringing collectively all the firm elements, buyer aspect (supply: rentalblog).
Digitization allows a steady dialog with the buyer, and in rental, this side is especially important: in its processes, at each stage, it’s clear that the buyer is the protagonist at play. It is the buyer who validates (or not) the digital answer adopted, utilizing it – with satisfaction or issue – to hire services or products. And it’s all the time the buyer who, by means of critiques and private suggestions, has the energy to affect, even to a substantial extent, the actions of the model.
Technological innovation, which has irreversibly modified the playing cards at stake, has introduced folks again to the focus in organizations, imposing higher funding and consideration on the CX aspect. Users-consumers have turn into more and more conscious and able to vital use of the technological options obtainable to them. In their evolution, they have decisively shifted the steadiness of the human-machine relationship in direction of the human ingredient.