5 secrets on how to be hyper efficient with your rental business
Learn the most popular secrets to become hyper efficient with your rental business
By Fred Kihle, CGO Sharefox.
The reduction in disposable income and the mixed feelings of pessimism and uncertainty among consumers have affected businesses as well. Companies have experienced increased costs, which they often pass on to consumers. Retailers report a decline in sales of durable goods and economic slowdown. However, is this also an opportunity? Will consumers, whether they are individuals or businesses, turn to a model that offers low upfront costs and flexibility? Especially among younger generations the conscious consumption and sustainable purchasing trend is clear.
On the other hand we see companies transitioning into circular business models and constantly lowering their carbon footprint. According to a McKinsey study, the Circular Economy represents a potential for new value creation at NOK 46 billion just in Norway (Source: Switch). McKinsey points to the circular economy as one of the ten most important future industries. We see new rental and subscription models to be a significant part of this,- allowing retailers and retail brands to innovate and transform towards new business models.
“A recession can be a challenging time for retailers and retail brands, (producers), it can also present an opportunity to launch rental services and make better use of existing inventory.
The times of an economic slowdown or recession can be a difficult time for retailers, as consumer spending tends to decrease during economic downturns. However, for retailers with large stocks or inventories, a recession can also present an opportunity to launch rental services.
Rental services allow consumers to borrow items for a set period of time, rather than purchasing them outright. This can be particularly appealing during a recession, as many consumers may be looking for ways to save money while still being able to access the products they need or want.
Retailers can offer rental services for a wide variety of products. This can help to generate additional revenue and make better use of existing inventory, which may be difficult to sell during a recession.
Additionally, rental services can also help to attract new customers, as well as a loyalty aspect among existing ones. This can be especially important during a recession, when many retailers may be struggling to keep their doors open. A rental service may therefore complement other initiatives and current business with extra sales of consumption articles, rent with option to buy, or rent with selling out the inventory stock at end of season, with a combined revenue per unit that is higher than traditional sales.
“Circular economy can add $4.5 Trillion in additional economic output by 2030 according to Goldman Sachs (2022)
Circular economy can add $4.5 Trillion in additional economic output by 2030 according to Goldman Sachs (2022). While a recession can be a challenging time for retailers and retail brands, (producers), it can also present an opportunity to launch rental services and make better use of existing inventory.
In Sharefox, we are now seeing this development accelerate. Take rental initiatives like Outdoor sports equipment from FENIX outdoor and their brand Partioaiotta (Fjällräven in Finland), rental of garden tools by retailers such as Felleskjøpet, and subscription models for e-bikes and childrens parkas, e.g. Parkdressen from Norway.
By developing a solid plan, researching the market, and promoting the service effectively, retailers and retail Brands can attract new customers and generate additional revenue. Maybe this can be a catalyst for change and investment in sustainable solutions for both governments and businesses. How does this fit your transition towards a circular economy and sustaining viable business models?