Sport, gardening, events… You sell great products and now you want to rent them out? Discover Lokki's 5 tips for a successful switch to a more sustainable model!
1. Why?
Consume less and consume better. For the planet, for future generations. It is no longer a slogan, it is a fact: each of us is trying, at our own level, at work and at home, to make a difference.
Because rental meets a deep need among citizens to change the way they consume. And because it is one of the answers to our energy-hungry way of life.
Rental is booming among retailers: outdoor, events, DIY, clothing… Every type of shop, from micro-businesses to retail giants, is looking at this alternative to ownership.
But Rome wasn't built in a day (hard worker, that Caesar), and rental means transforming your business model. So before you start, make sure all the relevant stakeholders are on board:
- Head of Innovation
- Store Manager
- Head of Customer Service
- Accountant
Above all, do your homework before you hand in your paper. In other words, make sure you can answer these questions before you start 🤓
- Why do you want to start short-term rental?
- What makes you want to get into rental?
- Have you had any experience in this area?
- How do you picture the customer experience?
- Who will be in charge of the project?
- What do you expect from rental?
- What results are you looking for?
💙 Lokki's tip: A rental project is a bit like a sports team: you need a rock-solid line-up. That means creating two key roles. A rental manager at head office, to drive the project internally and support the stores, especially with staff training. And also a rental lead in each store, to centralise all issues and report them to head office when needed.
2. How?
That's it, you've made up your mind. You too want to "do your part", as the French farmer, writer and thinker Pierre Rabhi used to say, by launching your first rental service. But you still need to understand how.
A pillar of the circular economy, rental is part of a wider process, the second life of products (also called "reuse"), which you need to master before becoming rental business of the year.
This means that beyond the questions you usually ask yourself as a seller, namely the end consumer and the rental location, you also need to plan other steps when building your strategy:
- Real-time management of stock and of available and/or rented products
- Product bookings by consumers
- Quality checks and refurbishment of rented products
- Choice of rental logistics (online shop, physical shop)
- End-of-season resale, through a second-hand resale network
💙 Lokki's tip: Still lost in rental? We've put together a little chart to help you find your way.
3. What?
Rent, fine… but rent what, exactly? Sure, we said that anything you can buy, you can rent. But there's no point offering an endless list if it doesn't match real needs.
You know the famous Pareto principle, which says that 80% of effects come from about 20% of causes? Borrow the idea behind this seemingly abstract mathematical concept to select your products. Offer fewer products, but the best ones! For example, start by renting out your 3 best-sellers.
Still out of your depth? Can't decide and it's driving you mad? Before you choose, think about these 2 key factors:
- Your shop's customers:
Are your customers French or from abroad?
Which socio-professional group do your customers belong to?
- Your location
Mountains or seaside? Maybe no need to rent out sledges in Saint-Raphaël, on the French Riviera…
Is your shop in the city centre? Think about urban needs. Are you based in a rural area? Consider the socio-economic environment of your area before drawing up your rental shopping list!
💙 Lokki's tip: Because we'd hate for you to tear your hair out, we did a little research on the most sought-after rental products. Here they are: in mobility, bikes and scooters top the list. In garden and DIY, carpet cleaners, pressure washers, drills and lawnmowers are the favourites. Finally, in event equipment: speakers, sound systems, photobooths, beer taps and tableware take the top spots!
4. How much?
There you go. You've chosen your offer and your products. But… oops. One key step is still missing, the one you dread so much: the business plan. Yes, we know, it's a pain. But it would be a shame to set off on such a great adventure without making sure you have the means to do it. And whatever happens, your executive committee, your manager or your store director will ask you the dreaded question: HOW MUCH? Or more precisely:
- What costs?
- What profitability?
Get out your calculator and fire up the left side of your brain to work out, as precisely as possible: 🧠
- The number of products dedicated to rental in your store
- The number of rental locations across your network
- The approximate amount of your revenue, based on the average rental basket, the rental duration and the second-hand resale price
- The approximate amount of your costs, based on the purchase price, the average time needed to handle a rental and the floor space (m²) allocated to rental
💙 Lokki's tip: Feel like giving up because of this business plan nightmare? We get it… Don't panic, we've created a business plan template, used by the largest retailers we work with. Would you like access too? Email me at frederique@getlokki.com and I'll send it to you 😉.
5. Who?
You're almost ready, impatient, trembling, in the starting blocks of rental. The offer, the products, the business plan, the rental locations: it's all there.
Except… except the most practical part: so what happens in store? You can't skip the famous "operational routines", which set out who does what and how in the shop, for example:
- Which team member takes the bookings?
- How are returns organised?
- Which management software will you use to manage stock?
Take the time to map out the in-store rental user journeys, so you have a clear view of these routines. Training your teams thoroughly is how you will make your rental project a success.
💙 Lokki's tip: Want to save time? We've designed a standard diagram covering every step of the consumer rental journey: communication, online booking (choice of store, choice of product…), and more.
In short
- 1. Why? Out of commitment to the environment, because it's a business opportunity, because you want to meet the needs of the people around you… First decide why you want to get into rental.
- 2. How? Rental follows a different life cycle from sales. It is part of a wider reuse system, also called "second life", which means taking other factors into account in your strategy.
- 3. What? Bikes? DIY? Tableware? Everything can be rented, but renting out your whole shop may not be good for your wallet. Choose products based on your customers and your location, and remember that they should complement each other.
- 4. How much? Numbers, numbers and more numbers. Like François Pignon, the hapless hero of French comedies, and his obsessions (minus the bad luck, of course), carry out a strict, detailed analysis of your project's costs and profitability to build a rock-solid business plan.
- 5. Who? The customer is king. Everyone knows that, but you still have to prove it! Take training in the right "operational routines" seriously.
And don't forget what our friend Pierre Rabhi, writer, philosopher and co-founder of the Colibris movement, used to say:
"Sobriety is a happy choice that brings a lighter, calmer and freer life. Happiness is not in possessing, in having, but in being."
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