Business

Why You Might Rent Instead of Buy Your Next Sofa

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Before moving to California, the grandson of one of interior designer Phyllis Harbinger’s wealthy clients, who had just graduated from college, decided to rent furniture rather than buy it for an apartment he and his girlfriend found in the New York area.

“They said, ‘We don’t know what we want to do. We don’t want to be married to anything, and we want to be sustainable,” said Harbinger, vice chairman of interior design at Fashion. Institute of Technology. “This generation is very fond of the reuse and buyback mentality to save the planet for themselves and their children.”

Office furniture rentals have a long history, but demand for home furniture rentals is growing, especially among younger consumers who prefer a more mobile lifestyle than was typical of older generations.

Internet furniture startups like Feather and Fernish are offering customers the option to rent furniture for as little as three months at a time, with the option to trade items during or at the end of the contract period if they’re in the mood for something else.

Appeal to a young, mobile client

Feather and Furnish “respond to the needs of people who have a lot of money but don’t have time to shop for furniture and may also not want to make the commitment to owning big, bulky furniture because they expect they’ll have to move again – and this is the younger generation.” demographic,” says Susan Inglis, Executive Director of the Sustainable Furniture Council.

The lease-to-own option that these startups are offering also appeals to people who don’t have enough money to buy right away but would like to have good quality items they can start living with immediately, she says.

Feather’s clients are typically in their 20s and 30s and live and work in cities. The service is well suited for people who have just moved or are about to move, live with roommates and move every six months or a year, Iliz Kaplan, the company’s president and chief operating officer, wrote in an email.

It’s also more affordable for people moving to a new state, which can cost anywhere from $4,300 to $4,800, or even moving down the street in most cities, which averages out to $1,250, Kaplan said. Feather customers “can settle into a regular studio apartment for as little as $105/month or a regular 1-bedroom apartment for $150/month.”

Feather cited a “significant increase” in new rentals since the start of Covid-19 and the emergence of telecommuting and hybrid work, greater financial uncertainty and the need for more flexible living arrangements. “As living conditions have changed in response to the pandemic, we have seen dining items shrink in exchange for more functional home office items,” Kaplan said.

Furniture rental to be more sustainable

Major furniture brands such as IKEA are also exploring leasing models. For the Swedish retailer, the rental experiments are part of a larger plan to move towards a circular business model by 2030, with the goal of eventually using only renewable or recycled raw materials, improving design principles to ensure less wear and tear when products are assembled and disassembled, and repair and re-profiling of used goods or their components.

IKEA began testing a circular furniture subscription model in 2019, but its progress has been somewhat delayed due to pandemic-related restrictions, Kiki Murbek, a circular cycle business designer at Ingka Group Innovations, wrote in an email. Ingka Group is the main franchisee of the IKEA brand with retail operations in 32 markets, representing about 90% of IKEA’s total retail sales.

Based on previous tests in several European countries, in 2021 the company introduced a limited B2B version called IKEA Rental in six markets: Finland, Sweden, Denmark, Norway, Spain and Poland. After testing several contract options, including contract lengths and banking partners, IKEA is evaluating the results before deciding on next steps, Moorbeck said.

Inglis sees the interest in renting better furniture as a reaction to the growing popularity of “fast furniture” in recent decades, which is based on cheaper nomadic materials and often ends up in landfills.

“People are tired of throwaway junk, and the furniture industry as a whole did itself a disservice many years ago by trying very hard to move to furniture that could be thrown away,” she said.

Feather, which currently serves ten major US markets including New York, Washington DC, San Francisco and Los Angeles, allows customers to change furniture items even during the rental period if their space, needs or aesthetic preferences change by offering one piece of furniture for free. exchange per residential customer, and additional changes for a fee. Approximately 14% of its customers currently use the exchange option.

“We are actively working to keep furniture of all kinds out of landfills,” repairing and reinstalling each item multiple times, Kaplan said, noting that furniture currently accounts for approximately 7% of all landfill waste.

While Feather furniture is designed with durable materials and a system of components to facilitate this process, “when items are deemed unsuitable for the next buyer, our first step is to work with our like-minded people at FloorFound to find the furniture. new house. If we are unable to resell the item, we will donate it through our partnership with Habitat for Humanity,” Kaplan said.

Inglis said she expects a sharp increase in the number of retailers offering repair services in the coming years.

Before furniture leasing becomes more popular, customer perception issues need to be addressed. IKEA has heard customers looking for long-term rentals express concerns about how to care for items and what the terms and conditions are if something breaks or is mistreated. This should be clear to both parties.

IKEA has found that the mindset change needed to fully understand the subscription model is easier for younger consumers than it is for older ones. Generation X and older consumers tend to associate subscription with a pre-purchase rental model that has historically made them pay more than buying upfront but also excludes the full repair, maintenance and return services that retailers now provide.

IKEA franchisees will also need to develop a digital product tracking system to be able to move away from the linear sales model and distribute products from one customer to another, as well as expand subscription services.

IKEA already sells refurbished and repurposed products in certain markets and plans to expand this business as a key element of its circular business transformation. In November 2020, he also opened a second-hand pop-up store at a shopping center in Eskilstuna, Sweden, aimed at retailers who sell recycled, organic or eco-friendly products. More than 30,000 IKEA products received a second life in the pop-up store during the first year of the test period, and in December 2021, IKEA extended the program for another year.

“The subscription service for round furniture that we are testing is not only about the products themselves, although they are of course very important, but also about understanding what the customer needs and wants, and the ability to meet those needs that may change. over time,” Moorbeck said.

David Bogoslav, special for CNBC.com


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