Temporary living: the rise of furniture rental
Consumers are less concerned about putting down roots. Is rented furniture the solution?
This feature is part of a larger package on sustainability. The rest of the series can be found here.
At some point, most people, if not all, endure a move. And with that comes a list of familiar challenges: deciding what items will make it and what items will ultimately be thrown away or donated, packing everything in boxes and coordinating with movers to transport everything from point A to point B. With the daunting reward at the end of unpacking everything once it finally arrives.
This is exactly what Michael Barlow and his now-fiancée experienced when they finished education at Northwestern and planned a move to Los Angeles.
“We said, ‘Wow, what makes moving so sh—y?’ for lack of a better word,” he told Retail Dive in an interview. “It’s really all the stuff you own and how much money you are actually spending on moving stuff that you aren’t necessarily excited about owning.”
Barlow found limited choices when it came to moving, one of which was getting rid of his existing furniture to buy new furniture once he got to his destination, an option he didn’t particularly love. And so, Barlow’s frustrations led him to take matters into his own hands: in 2017, he co-founded and became chief executive of Fernish, a direct-to-consumer furniture subscription service.
Furniture rental isn’t new
Other players have cropped up alongside Fernish, including direct-to-consumer brand Feather, but more recently larger retailers have begun testing similar services. Last month, West Elm announced a partnership with Rent the Runway to offer consumers the option to rent soft goods like pillows from this summer onwards, and earlier this month Ikea announced plans to expand its furniture leasing service to 30 markets. It’s also important to note that Fernish was selected as one of 18 start-ups to participate in Ikea’s Bootcamp Program, an accelerator programme in its second year.
Furniture rental isn’t a new concept. Cort Furniture Rental and Rent-A-Center have been around for years. Although the latter markets itself as an alternative financing option and is geared toward a different demographic, Michael Kim, vice president of data and analytics at Aarete, thinks “the underlying story is the same, there are just options”.
Barlow’s uncle previously ran Rent-A-Center midwest out of Chicago so he was able to capitalise on that knowledge.
“Rent-A-Center would be an old-economy brand,” he said. “They’re great, they make hundreds of millions of dollars a year in revenue, but their target population, their target customer is very different than our target customer. They’re not an aspirational lifestyle brand.”
And while Craisglist and other resale sites offer quality-name furniture options for a lower price than the original sale price, there’s no quality standard for the product or delivery option.
“If you’re on Craisglist, the biggest issue is finding a way to pick it up and deliver it, but you also don’t necessarily know the quality or care what’s put into the product that you’re going to be getting second-hand,” Barlow said.
The reason furniture renting and leasing options gained traction in the last couple of years, analysts say, is primarily due to timing and the next generation of consumers being more willing to pick up and move than past generations.
A 2017 Coresight Research report emailed to Retail Dive found that urbanisation bolsters the demand for product rentals, “as the generally younger, digitally connected populations in urban areas face limited space in their homes but enjoy greater access to rapid delivery options and local collection points”. The report also found a shift in consumer behaviour regarding acquiring temporary pieces rather than investment pieces. A different Coresight Research report from the same year found that 11% of consumers in the US would be willing to rent furniture compared to 9% in the UK, and digging deeper, 13% of consumers living in New York said they would be willing to rent furniture compared to 20% in London.
“I know that there are stage gates my life will go through,” said Michael Brown, a partner in the consumer and retail practice of global strategy and management consultant A.T. Kearney. “Why don’t I acquire my furniture in a way that aligns with those stage gates in my life? I think it’s a popular option that’s here to stay, just like we see leasing cars, just like we’re seeing occasional renting of apparel, like Rent-the-Runway. We’re seeing all of these types of ways we can access products without owning them.”
But in addition to today’s consumer being more willing to simply experience something, even temporarily, rather than owning it, and having the desire to move more freely, Brown said it’s also “consumers’ desire to have the best” when it comes to product quality and brand recognition.
“Some of the new programmes that we’re moving more toward are starting to view furniture as a fashion accessory, not something that I have to buy and own for 15 to 20 years,” he added. “I can change it. It can be temporary. It allows me more frequency of changing the look and feel of my house and not the cost of buying new furniture.”
However, as with anything new, getting consumers to make a change and disrupt their lives is a major challenge for any company, but especially DTC brands. And for a digitally native brand selling furniture, an item many consumers want to try before they buy, even more challenges can arise. To mitigate these hesitations, Fernish has formed partnerships with real-estate companies to present its products in a showroom setting, in space consumers may actually choose to live. This takes a page out of several direct-to-consumer brands’ playbooks, primarily Burrow, which in addition to its two New York showrooms, Burrow House and The Local, formed partnerships with coffee shops, retail stores and co-working spaces across the country to showcase its pieces to a larger audience.
“What we’re doing makes so much sense for the way people are living these days, but at the same time, how do you show that and convince [consumers] and educate them about something that’s new that’s happening in the marketplace when there’s so much noise out there, especially in furniture,” Barlow said.
In 2015, the EPA reported that 12.05 million tons of furniture waste was produced, 10 thousand tons were recycled, 2.35 million tons were combusted with energy recovery and a whopping 9.69 million tons ended up in landfills.
Barlow noted that getting the most out of a piece of furniture’s “useful life” before sending it to a landfill is critically important to the company and to its suppliers as well. Refurbishing and redistributing furniture is Fernish’s way to play a role in combating furniture waste, but Barlow also said the problem stems from low-quality furniture entering the marketplace in the first place.
“It’s very important to be conscious of the quality of product you put into circulation up front to be sure you’re able to refurbish or refresh that product in a like-new state and give it to a second-cycle customer,” he said. “Think linear consumption patterns of buy, use, throw away, the world kind of has to move to a more circular economy model where you have buy, use, refurbish, re-use, refurbish, re-use … then maybe donate. But getting three or four lives out of a piece makes people more conscious of the quality of the product they put out in the first place.”
Even though Barlow admits sustainability isn’t necessarily the top reason Fernish consumers decide on a furniture subscription service, it ranks high nonetheless. “At the end of the day, it’s a reason we built the business around and we’re accomplishing both goals here: putting quality products into circulation and not letting them end up in landfills before the end of their useful life,” he said.
But will it be enough to curb the millions of tons of furniture waste ending up in landfills every year? Brown says it may help a little, but it’s not a complete solution by any means.
“There’s a lot of calculations in moving this furniture around and uses of it and eventually it’s going to meet its end of life, so no matter what, it’s going to end up in a landfill anyway,” Brown said.
Worth it to rent?
While consumers generally use services like Rent the Runway to access something for a special occasion for a night, a piece of furniture sits in their homes much longer. It becomes part of their life and it’s something they live with.
“It’s interesting and the entire sharing economy – why not share furniture?” Ray Hartjen, marketing director at RetailNext said in a previous interview with Retail Dive. However, he added that “sharing a sofa, it’s a used sofa, it’s been used before and it shows the wear and tear … there’s perhaps a difference there”.
For some of the players offering lower-priced items – like Ikea – Hartjen said buying and assembling it at home yourself may provide more benefits in the end.
So who really benefits from this model? Kim suggests that a lot of data would initially point to millennials and the younger generation primarily because of their willingness to adapt to change, but suggests it could benefit a larger audience as well.
“To me, it’s more demographics that have pretty seismic lifestyle changes, so that could be new parents, younger millennials or it could be people transitioning from jobs,” he said.
But Barlow, who acknowledges Fernish’s core customers are generally young professionals longing for greater mobility, suggests that a renting option may provide an opportunity to consumers who cannot necessarily afford to spend a lot of money on higher-end pieces of furniture and only want the piece temporarily.
“We can actually talk about the population of people who might not have access to a Crate & Barrel-style product because of the price point associated with it,” he said.
And while expanding its target customer base is a long-term goal of Barlow’s, he’s content that his company is beginning to see results from the goals it set out to achieve: creating a model more aligned with the way today’s consumer is moving and promoting a more sustainable lifestyle.
“Success means needle-moving progress in both the buckets we set out to solve,” he said. “Solving a problem and creating a service that fits a lifestyle of a generation of consumers that need it and … keeping low-quality furniture from ending up in a landfill before the end of its useful life.”