The rise of rental economy: How millennial consumers are guiding the market’s future
Today's dynamic consumer ecosystem has resulted in various shifts and transitions in the services that new-age companies offer. In the last decade itself, we have seen the rise of the sharing economy across the world, with the renting economy steadily taking centre stage.
In India, rental services were in demand even before the pandemic. However, over the last year and a half, it has become evident that companies have to offer flexible solutions like rental and subscription, especially in a retail landscape, where millennial consumer patterns guide the lines for the market's future.
The appeal of rental offerings
The renting economy is suited to consumers who move around a lot and like to stay flexible for that reason. In addition, renting rather than owning makes for a compelling proposition for younger consumers in times as we have seen in the past two years.
For example, young working professionals might view making big-ticket purchases as an unwise choice, especially now, given a degree of uncertainty.
Additionally, growing preferences for change and convenience have created a demand for rental or subscription models across industries. And it has heralded a whole new ecosystem for rentals and subscription models for all kinds of products.
The success of consumer categories, such as transportation services, electronics, furniture and appliances, is a direct result of companies switching over to rental or subscription models for their services.
Rental as a way of life
An important phenomenon to note is the reduced inclination to spend on material goods and instead prioritise experiences such as travelling, trying new cuisines, and other leisure activities among younger generations.
Earlier, these expenses were considered discretionary but are now seen as a way of life as consumer priorities continue to shift. While lockdown restrictions have affected this trend during the pandemic, we can expect it to continue as sectors open up.
Secondly, with urbanisation and constant migration, young urban Indians often switch cities for work, making rental or subscription services a viable option. When in a new city, these consumers tend to rely on online platforms for various services, as seen with ridesharing, accommodation, and food delivery services.
As more companies incorporate rental services into their offerings, more millennial and Gen Z consumers are shifting their behaviour from buying to renting, disrupting the traditional retail business model as we know it.
Flexibility is the need of the hour
During a pandemic, one may have expected an unfamiliarity with renting, coupled with the fear of sanitisation issues, to be deterrents to the rental market. However, this was proven wrong, especially for the furniture rental industry and the players who took active steps to ensure global safety and sanitisation standards.
Additionally, the ‘new normal’ led to various industries adopting working from home, either full time or in part, resulting in significant demand for furniture at home. In this context, furniture rental offers consumers the flexibility to pick products according to their needs and wants and keep up with changing trends and requirements.
A step towards conscious consumption
The option to rent also appeals to the environmentally-conscious consumer because products that would have typically ended up in landfills are refurbished and given a second lease of life.
So, every time they rent, they help reduce furniture waste and lower their overall carbon footprint. All this while still enjoying products that are beautiful and as good as new.
Overall, the renting economy has created a remarkable place for itself and is here to stay. Thus, making it critical for companies to adapt to the rapidly changing preferences of their audiences. And, those who adapt quickly are guaranteed to succeed.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)