In April 2019, AO World announced it would be beginning a trial of an appliance rental service in England and Scotland, offering the rental of white goods starting from £8 a month, seems to be prefiguring wider changes where consumer behaviour seems to be less enthralled by the prospect of appliance ownership.
Within that affordable sum are appliance insurance, repairs and the recycling of any old appliances. After five years, customers will be able to replace an appliance with a new one and have the old one sent for refurbishment or recycling.
Like other subscription models, AO’s shares in the fact that customers can cancel at any point with replacement items if needed. The rental service is guided by their mission statement that everybody should have access to reliable and quality appliances. The company have also put their money where their mouth: offering appliances without exorbitant interest or sneaky hidden extras. While also being a high-flying competitive business, they also have a long history of supporting communities, and AO Smile provides charitable donations to local community projects.
Of course, many opportunities to rent white goods already exist in Britain – none, however, seem to be as competitive as AO.
History of appliance rental
This is not an entirely new idea. In 2014 Dutch appliance rental service, Bundles went into partnership with Miele. Bundles offers the consumer the chance to subscribe to use high-quality washing machines, tumble dryers and dishwashers in an arrangement that can be cancelled at any moment, unlike a contract with a mobile phone company.
Subscribers can either pay a fixed monthly fee or a usage fee, how much or how long they plan to use the appliance. It is also possible to have a subscription for detergent, energy, and dishwasher tablets too.
One advantage of the rental model is its enhanced sustainability. Miele products were intentionally chosen because of their high quality (as opposed to cheaper throwaway models), as well as the fact that they are made from sustainable materials.
Bundles connected the appliances to the internet to offer customers precisely targeted recommendations on using the appliance for increased longevity, replacing or repairing the appliance if necessary, and reusing the materials if they proved not possible to repair.
Consumer and behavioural futurist Will Higham considered the significance of the renting mindset:
“The sense of the importance of ownership itself is starting to ease away. This is a generation that grew up with constantly upgrading their mobile phone, and now you can rent things, download things, subscribe to them – I can access a car but I don’t need to own one.”
There is plenty for prescient manufacturers and retailers to reflect on. Scandinavian giant Ikea is getting in on the action, trialling strategies such as renting out office furniture, with a view to potentially renting out kitchens in the future.
The rental or subscription business model offers consumers access to the latest home appliances with insurance and, consequently, fewer headaches thrown in. In return, it also enables brands to have access to a demographic that would otherwise not necessarily purchase one of their products. After having them in their home, this may influence their purchasing behaviour in the future with greater long-term loyalty. Who knows? The proof will be in the product.
Is renting home appliances right for me?
|Is there a credit check when applying for rental?||In most cases, the application will be subject to the financial status which will include us obtaining your credit file from Experian. You can view your Experian credit report here|
|When can I upgrade?||You are able to upgrade for a new appliance at the end of the contractual period. Some contacts may be shorter than others.|
|What are the advantages of home appliance rental?||– Low Monthly Outlay – Keep up to date with the latest technology – Worry-free servicing, no surprise repair bills – Delivered and Installed as part of the price|
|I am Student/Unemployed/on welfare, am I able to rent from you?||Potentially. The application will usually be subject to your status and which will include us obtaining your credit file from Experian.|
|I wish to cancel my rental agreement and return the appliances; how do I go about this?||Until a written notice of termination is given keeping with a company’s terms and conditions, all contracts will usually continue thereafter for the minimum term at the current rate. Check with your provider.|