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EDITORIAL Welcome to the pre-loved, retail rental economy

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The circular economy has arrived (Image: Shutterstock)
The circular economy has arrived (Image: Shutterstock)
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Boohoo has embraced ethics and sustainability, IKEA wants your old wardrobe and MusicMagpie will now rent you a re-con iPhone. Retail has changed in so many ways

While Boohoo’s stellar performance in 2020/21 shows just how, if you get it right, you can transform a retail sector online it also shows that the moral and ethical approach a company takes can also help it become a big player.

 

As part of its results presentation yesterday, the retailer outlined – at length – all the steps it has taken following the ‘sweatshop’ scandal that broke last summer and how the company is not only ridding its supply chain of poor labour, it is also becoming a champion of garment workers and the environment.

 

In its annual statement it talks at length about its commitment to ethical and sustainable manufacturing and retail – and, if its profits are anything to go by, it is chiming with its customers.

 

This marks the beginning of a big shift in retail. There has been much talk about ethics and sustainability, but it has been slow to get going. Now, with shops reopening and things starting to move again in the economy, sustainability and ethics are starting to come to the fore.

 

IKEA has perhaps made the biggest mainstream stride in this direction with the launch this week of its IKEA Buy Back service, where it is encouraging shoppers to sell their used and unwanted furniture back to the retailer, who will sell it again. A nice touch is that the company is also attaching notes to the pre-loved goods telling their story and how much joy they brought in their earlier home(s).

 

While something of a gimmick, this is the stuff of the thriving second-hand market. It is the providence – even if that is providence that is just that something brough some happiness into someone’s life – that makes the sale and IKEA has hit on something clever here. You aren’t buying an old chest of drawers, you are buying a small piece of urban history.

 

Another interesting move in the pre-loved market is the news that MusicMagpie is now renting out smartphones. The company, which sells reconditioned electronics and electricals has seen how the subscription model has started to work in retail and has spotted an opportunity: why not make high end gadgets like smartphones more affordable by renting them to users?

 

This may shift more units – as more shoppers can now afford an iPhone 12 – but it also locks them in to the company, much as many of the subscription services on that iPhone 12 do. It also offers a neat way of recycling phones.

 

It will be interesting to see if this is extended to other media devices – games consoles, set-top boxes, tablets, laptops, ebook readers – as there is surely a parallel economy here for these items to be rented. It is a nice way to reuse them and democratises access to digital technology – something very much needed in the post-Covid world.

 

One thing that does stand out from this – particularly around IKEA – the success of this services is predicated on shoppers and those selling their furniture back to IKEA have to go in-store. The move may seem at odds with the growing amount of online shopping that has grown up during lockdown, but it appears that now that shops are open, shoppers are coming back. Supermarkets, in particular, are seeing increasing footfall and online sales, while still high, have slowed.

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