It’s now 15 years since Dido bemoaned the state of her love life in her ubiquitous dinner party album Life for Rent . ‘if my life is for rent and I don't learn to buy, well I deserve nothing more than I get 'cause nothing I have is truly mine’. Whilst one could argue these words still apply to relationships, it feels in many categories, we are ever more open to the concept of ‘temporary’ ownership.
Much has been written about ‘Generation Rent’ and it’s fair to say that the statistics in housing are pretty staggering. The Institute for Fiscal studies found that home ownership fell to just 27% amongst 25-34 year olds in 2016 down from 65% two decades previously. An Englishman’s home, it seems, may no longer be his castle. However, the growth in the ‘sharing economy’ means that the changes are not just about the home - increasingly the car and the dog may also be accessible on a temporary basis too...
Borrow My Doggy now has over 600k members in the UK and Ireland with dog owners paying just over £4 per month and ‘borrowers’ paying just over £1 per month to be members. This seems to work well for both sides – dog owners have less reliance on kennels and those who would otherwise not be able to own a dog due to lifestyle get the unique pleasure of interacting with a dog without the responsibility of ownership.
Now, it seems we’re on the cusp of further changes in the car market too. The UK consumer has already become accustomed to leasing rather than owning their vehicle with figures from the Finance & Lending Association revealing that dealers issued over £30bn in new credit in 2016, double the equivalent figure from 2011
However, new propositions from the luxury end of the market are taking this one stage further. Last year US automotive giant, Cadillac, launched its Book service allowing customers to subscribe to Cadillac for $1,500 per month. Whilst clearly a top end proposition, it offers customers the flexibility to choose which vehicle is right for them on each occasion. Want a sports car for the weekend, need an SUV to take the kids away camping? Simply select the car that’s right for you.
Now Land Rover has announced the launch of its Liquid service in London, offering a slightly different twist on the model. Rather than subscribing, Londoners can access a Discovery Sport to take away in the UK (or even to Europe for £150 a day).
There’s clearly a niche to tap into here – research from the DoT published earlier this year showed that not only has driving licence ownership has fallen steeply amongst 21-29 year olds but also that there was a 36% drop in car trips made per person amongst those aged 17-29 between 1995-99 and 2010-2014. Why go to the expense of owning a car full time if you can simply book one for the occasions on which you need it?
Whilst many of these services are still niche, they are springing up across sector after sector. Feather offers customers in New York and San Francisco the opportunity to rent their furniture. As they put it ‘On average, people move 12 times before buying their first home…That's a whole lot of IKEA furniture...’ .
And it’s not just in durables, services like Rent the Runway or Girl Meets Dress offer consumers the chance to find that unique designer piece for an event. In the Instagram world, it seems no-one wants to turn up with same outfit or even be seen wearing the same dress twice. RTR claim that 71% of their members have discovered new designers and 52% have experimented with a style they otherwise wouldn’t have bought.
It seems that for many, we have reached ‘peak stuff’. Steve Howard from Ikea was quoted as saying " In the west, we have probably hit peak stuff. We talk about peak oil. I’d say we’ve hit peak red meat, peak sugar, peak stuff". This is backed up by recent spending patterns – the latest published data from Barclaycard suggests continued strong growth in spending within the experience economy, revealing an 11.4% and 13.6% increase in spending in pubs and restaurants respectively.
Of course, the sharing economy is not always a guaranteed success. Earlier this year Spinlister (a service which allowed members to rent bikes, surfboards and snowboards) announced it was unable to secure further funding and was shutting up shop. However, with new services springing up almost every week it seems, it certainly isn’t going anywhere soon.
At a time when we have already seen a flurry of bad news stories for the high street with rising rents and rates putting pressure on the retail sector, these shifts in our fundamental need to ‘own’ create yet another headwind for brands to respond to.
However, they also open up new opportunities to innovate and capture new segments of the market and Land Rover deserves plaudits here. Rather than wait for an over the top player to dis-intermediate them, they have seized the initiative – it will be interesting to see how many other brands have confidence to follow suit