In any consumer space, brands recognize that customer’s tastes change very quickly, and they must strive to not only be taste-setters for their target consumers, but also the space they come to when looking for trendy items. But, what should a brand do when tastes are dictated and discarded within weeks, based on something as fickle as the most viral Instagram page?
Currently, the furniture market is seeing huge shifts in trends, when home décor and styles changing swiftly and consumers struggling to keep up. The pro-consumerist nature of most social media posts has led to a culture where people are always dissatisfied with what they have and are always vying for the latest way to upgrade. The home space is the most recent lifestyle aspect to come under the scrutiny of these consumers. However, there’s a solution most other brands haven’t seen yet: it’s the sharing economy.
Ikea, the world’s largest producer of affordable furniture, is set to enter the sharing market by allowing consumers to rent its furniture!
How soon will this happen?
The sharing economy is estimated to hit a market size of 40.2 Billion USD in 2020, and Ikea will be joining it much before. Currently, it plans to launch its rental services in Sweden, by starting out with smaller furniture pieces like desks and chairs that consumers can swap out without having to change their entire décor scheme. Based on the response they garner, they will spread this to all their global stores.
Renting Furniture in India: Does it work?
Founded in 2012, Furlenco, a furniture rental company in India, makes an estimated annual revenue of 3.7 Million USD. Its target consumers include young people who are living alone and cannot afford to buy expensive pieces of furniture. With trendy pieces and rentals starting at prices as low as Rs 499, there’s no reason why youngsters wouldn’t benefit from this.
One of the biggest plus points of renting furniture is that you do not have to commit to a single piece or style for a lifetime. As a result, cognitive dissonance, a common occurrence that includes feeling dissatisfied immediately after making a purchase, is something that doesn’t happen in these consumers. The fact that they know that they can exchange items anytime when they get bored is what makes more and more people open to renting their furniture.
While affordability is a huge point to consider, another one that plays a role in encouraging consumers to go down the path of renting is the fact that young consumers base their decisions on trends, and when visual trends change in as soon as a few months, there is a larger scope for disappointment or discontent in the long run. So, why not just rent, exchange, and rent again?
According to Ashwin Venkatraman, Furlenco’s COO, their consumers spend monthly an average of 2,500 to 3,000, which gets them a few different furniture pieces. With that being on a fraction of a young 20-30 year old’s rent, it really does not seem like a bad idea to rent!
Let us see how quickly Ikea enters the Indian sharing economy and how it fares! Judging by its well-designed furniture and youth appeal, we guess this brand will do very well in India!