Feather and Fernish are “responding to the need of people who have plenty of money but no time to go shop for furniture and perhaps also no desire to commit to ownership of large, bulky furniture because they expect to be moving again — and that’s a younger demographic,” says Susan Inglis, executive director of the Sustainable Furniture Council.

She said that rent-to buy is an attractive option for people who do not have the money to purchase immediately but want to be able to live with quality items immediately.

Feather customers are typically in their 20s or 30s and live and work in urban areas. Ilyse Kplan, president and chief operating office of Feather wrote that this service suits people who just moved, or will soon move. The company allows them to live with other roommates, move once a year and then move again.

Moving to a different state is also easier. This can run between $4,300-4,800. However, it’s possible to move down the street for an average $1,250. Feather customers are able to set up basic apartments starting at $105 per month. A basic 1 bedroom apartment starts at $150 per month.

Feather mentioned “significant growth” of residential leases in the wake of Covid-19, the advent of remote and hybrid work and greater financial uncertainty as well as the need to have more flexible living arrangements. Kaplan stated that as living conditions changed due to the pandemic we saw dining room furniture decrease. In return, there were more useful home-office items.

IKEA and other brick-and mortar furniture retailers are exploring the possibility of leasing. Swedish retailers are exploring the possibility of renting. They also have a larger goal to make the transition to a circular business model by 2030.

IKEA tested a subscription-based circular furniture model, but it was delayed somewhat by pandemic restrictions. Kicki Mubeck, a circular business design on Ingka Group’s circular innovation team, said in an email that the progress had been slowened. Ingka Group owns the IKEA brand’s primary franchise with 32 retail locations that make up about 90%.

Based on its previous testing in several European countries the company launched a limited-run B2B edition, IKEA Rental, in six markets in 2021. These were Finland, Sweden (Demark), Norway, Spain, Spain, and Poland. Murbeck explained that IKEA had tested various contract options and partners before making a decision on next steps.

Inglis views the rising interest in renting furniture with a higher quality as an attempt to counter the increasing popularity of “fast furniture,” which is made from cheaper materials that cater to a nomadic lifestyle, and ends up in landfills.

She said that “people are fed up with throwing out junk” and that furniture manufacturers did not try hard enough to shift towards furniture you would discard.

Feather, currently serving ten markets in the U.S., such as New York, Washington, D.C., San Francisco, Los Angeles, etc., allows customers to switch furniture items during their lease period, if space, needs, or aesthetic preferences changes. Residential customers can get one swap for free, with additional changes at a cost. The swap option is used by approximately 14% of Feather’s customers.

Kaplan stated that furniture accounts for approximately 7% of landfill waste. He said: “We are actively working to keep all types of furniture out of landfills.”

Feather’s furniture has durable materials and an integrated part system. “When pieces are no longer feasible for our next customers, we first work with FloorFound with like-minded partners to find new homes.” Kaplan stated that if an item is not available for resale, the furniture will be donated through Habitat for Humanity’s partnership. 

Inglis indicated that she anticipates retailers who offer refurbishing services to increase dramatically over the next years.

Before furniture leasing becomes more popular, there are many customer perception issues to resolve. IKEA hears from customers looking for long-term rental of furniture that they are concerned about their products’ care, and the conditions in which it is to be treated if anything breaks. Both parties need to understand the terms and conditions.

IKEA has found that younger customers are able to understand subscription models better than older consumers. Older consumers and Gen X tend to think of subscriptions as renting-to-buy. This has historically meant that they have paid more for their services upfront, but it also means that there is no scope for repair, maintenance, or return service.

To be able move from linear sales models, IKEA franchisees will also need to create a digital product track system. This allows them to circulate products to customers and increase the subscriber base.

IKEA currently sells used and refurbished items in certain markets. This is a major component of the company’s circular business transformation. The company also launched a pop up store for secondhand products in November 2020 at Eskilstuna Shopping Mall, Sweden. It is dedicated to selling recycled, organic and sustainably-produced goods. In the second year, more than 30 000 IKEA items were given new life in the pop-up stores. The program was extended by IKEA to December 2021.

Murbeck stated that the subscription to circular furniture that Murbeck is testing doesn’t just focus on the product itself, though they are very important. It also focuses on understanding the needs of the customer and being able to satisfy those that may change in the future.

—CNBC.com Special: David Bogoslaw