Society is going through a key step change at the moment - we’re still in the throes of a major global move to urbanisation - prices are sky-rocketing and living space is shrinking. What with wage levels largely frozen since 2008 - your typical householder has less disposable income and less space to stow their goods.
Several rental-type businesses are already into maturity through technical innovation - most people rent or subscribe to music and video now - via iTunes / Google Play / Spotify / Netflix / Hulu / Sky and the like, and people mostly subscribe to literature now too via Kindle / eBooks.
As the new social / eco-conscious economy looks to cut down on wastage and the various different types of pollution, consumers are increasingly looking away from materialism towards more responsible means of accessing products and services. There’s not just a change in consumption / consumerism, but also a change in how we utlise existing resources. A few of my neighbours for instance make use of Airbnb to get additional income via renting out a spare room. It’s also getting fairly common in Reykjavik that several young professional couples are sharing a house - for the sake of more affordable rents.
Many retailers need to face up to these new challenges and find new means of delivering their services. What with the growing success of eBook monthly subscription service ’Scribd’ I’m surprised that none of the publishing giants have really taken this to heart. I would be all for paying a £9.99 monthly fee for unlimited Kindle eBooks access (a la Spotify) - why hasn’t Amazon done something about this - they already sell, and rent out videos. It’s a no-brainer for media companies to offer different means of accessing / acquiring content - from short-term rental to longer term subscription and yes - outright purchase. The truth is most media buyers don’t realise that when they buy a digital version of something (Kindle, iTunes) it is actually a long-term subscription, they don’t really ever actually own the media (it’s more of a licencing model). I’m really surprised that a major player like Amazon has not yet given its customers similar options with Music and Literature as to what it already provides for Video.
The car rental / traditional taxi business is currently in flux too - with businesses like Zipcar and LiftShare giving travellers different options for getting from A to B. There is of course an enormous legal minefield here in terms of liability waivers, health and safety etc., but Social Networking has enabled all these businesses by allowing people to broadcast and offer up shared ownership / rental schemes - so it will happen regardless, and the legal / safety framework will need to catch up.
Clothing hire / rental - in terms of formal wear - that is to say weddings and black tie events etc. has been big business for years - just ask Moss Bros. But now companies like Rentez-Vous are offering you full wardrobe options - where you can ’buy into’ daily luxury wear for 1/3 of the retail price.
Many retailers will need to review their business models, and combine their catalogues to serve up rental options alongside regular purchase pricing - so we get options for:
It’s incredible how much you can already rent - your home, your furnishings, your wardrobe, flowers, art, car etc. The car industry has long had leasing and lease-purchase. Car manufacturers have similar issues to smartphone manufacturers - in that there are so many new models forthcoming that your purchase is almost instantly redundant. For this reason O2 came up with its ’Refresh’ service, but this is clunky still. O2, Apple, Car Manufacturers et al. should all be providing proper subscription type services - so your subscribe to the brand, and the product gets upgraded periodically and automatically. You will still have different models and different tariffs, but the customer is getting a proper guarantee of long-term service, while the company gets guarantees of long-term revenues.
In the UK there has always been an innate bias towards ownership - ’An Englishman’s home is his castle’ etc. While in Germany, Holland and Scandinavia, renting your home is the norm. I must admit I still have a foot in both camps - I consume both traditional media (Books, Vinyl, Blu-rays) as well as all the different digital media. Also, as a creative professional I like being surrounded by inspirational artworks and artifacts. For many people though this won’t just be a lifestyle choice, it will be a necessity bound by disposable income and accomodation.
It will be fascinating to watch this one evolve and see what old ’typewriter’ businesses do to compete within this new dimension. We’ve already seen a lot of litigation from hotels and taxi firms (particularly in the USA) versus their new sharing economy competitors. They need to stop thinking defensively and embrace the new opportunities just like Avis did by snapping up Zipcar. Most software used to be boxes back in the day, but now it’s nearly all accessed on subscription and SaaS.