business news in context, analysis with attitude

by Kevin Coupe

Fascinating story in Forbes the other day about how REI, the outdoor gear and clothing retailer and cooperative, “is ‘significantly’ expanding its rental and used gear sales programs and trade-in options.”

According to the story, REI “has historically hosted in-store ‘garage’ sales a few times a year to resell gently used products that customers have returned. But now the company is going year-round with the initiative, dramatically expanding its rental service in terms of both stores and products.

Forbes writes that “REI decided over a year ago to make rentals and what it described as ‘re-commerce’ in used gear sales a key business focus to give customers a more affordable option to buy outdoor gear and allow those with growing children or little storage space to trade in or trade up. But perhaps the most critical driver behind these initiatives is Millennial shoppers, who make up a third of the company’s rental customers.”

What REI seems to be confronting - rather successfully, based on the numbers - is the notion that Millennials have different purchase patterns than their elders. Not only do they want to keep the stuff they own longer than earlier generations, but, as we know from other studies and surveys, there are a lot of young people out there who may not want to own things that they can borrow, rent or lease. Like cars. Or homes.

It seems to me that these kinds of attitudinal shifts have to be factored by marketers into their approaches to wide range of categories. They’re not going to rent food or pharmaceuticals, of course, but their relationships with traditional retailers may be affected by how they view matters of ownership and possession.

We see this with other retailers - Ikea, for example, which also is getting into the rentals business, catering to people who would rather rent furniture than own it. And Ikea, of course, is, at the same time as it invests in the rental business, also investing in smaller stores that will serve as pick-up locations as well as offering consulting services.

It seems simplistic to suggest that everything is changing, and retailers need to figure out if they are going to be able to ride the wave, or be swamped by it.

Except that the reality seems to be that everything is changing, and retailers need to figure out if they are going to be able to ride the wave, or be swamped by it.

Eyes shut. Or Eyes Open. Your choice.
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