NEW YORK -- Top retailers are shifting their strategies to reach shoppers who want to rent home decor instead of buying it.
On Thursday, West Elm announced a partnership with Rent the Runway to offer a selection of pillows, blankets and covers to rent for Rent the Runway's 10 million members. This will be the first time that West Elm will offer rental products and marks Rent the Runway's entry into the home goods market. The company has disrupted the fashion industry by offering women designer dresses, tops and jeans' rentals for $159 a month.
For West Elm, which is owned by Williams-Sonoma, the partnership will help the brand woo Rent the Runway's younger customer base. West Elm, known for its handcrafted and modern home designs, sees an opportunity to build its brand with existing customers and introduce it to new ones through Rent the Runway. The collaboration will allow it to test customers' appetite for renting stuff in their homes with the help of an expert in the space.
Demographic trends have forced traditional brick-and-mortar retailers like West Elm and others to adapt their business models. Growing numbers of Americans are renting everything from clothes to cars, explained Ari Ginsberg, professor of entrepreneurship and management at NYU'S Stern School of Business. And more US households are also renting their homes than at any point in 50 years, according to Pew.
Furniture rental start-ups like Fernish and Feather have cropped up to draw shoppers who switch homes frequently or who don't want to keep their furniture for extended periods of time.
Now, big retailers like Crate & Barrel and Ikea are jumping in to appeal to these customers. Crate & Barrel joined with Fernish last year, while Ikea is testing out furniture rental programs overseas.
"You can either join or get run over," said Ginsberg. "If you don't do it, your competitor is going to."
Beginning this summer, Rent the Runway members will have the option of renting 26 different West Elm "bundles" of stuff like throws, shams and quilts. Members can choose how long they want to keep the bundle and will also get a discounted rate if they want to buy it.
"This allows consumers to change up their style and their looks without the anchor of high-cost furniture," said Greg Portell, lead partner in the global consumer and retail practice of A.T. Kearney, a consultancy.