2023-11-29 17:22:03
The campaign by the Environment and Energy Management Agency (Ademe), which begins at the end of November 2023, was interpreted from its release as directed against the sale of consumer goods, with the character emblematic of a “reseller” and his badge labeled on his chest. If the campaign can be understood from an environmental point of view, it has targeted retailers at a time of the year when they intend to achieve a significant turnover, between Black Friday promotional operations and the upcoming Christmas holidays.
The campaign divided up to the government. The Minister of Ecological Transition, Christophe Béchu thus “assumed” this communication (which remains maintained despite requests for its withdrawal) while the Minister of Economy and Finance, Bruno Le Maire, deemed it “clumsy”.
In fact, the campaign can be understood as aiming firstly to promote more reasoned consumption, in particular with the emphasis on loans (one can always dream…) but above all on location consumer goods to the detriment of sale. This obviously only concerns durable goods because you obviously cannot rent non-durable goods like food.
Producers and traders should not be alarmed, however, because choosing to rent rather than sell is often in their interest: in many cases, renting does indeed appear to be in the interest of businesses.
More cars rented than sold
The microeconomic theory teaches that, when the price of the durable good is likely to fall over time (by obsolescence or because other, more efficient models arrive on the market or because the good cannot be easily repaired), the company has an interest to favor the rental of the goods it produces rather than the sale. This is a “selfish” interest and not a desire to move towards more responsible behavior.
Indeed, if the company cannot commit to the future value of the good, the consumer risks waiting before purchasing. In the case of a rental, he no longer fears anything since he is not the owner of the property: he therefore rents the property in the present period and he can always decide not to rent it in the future period. if conditions have become unfavorable.
Rental is, for example, particularly popular for automobiles, now more rented for long periods than sold. For electric vehicles, on the one hand the future price could fall for the same model due to economies of scale, but also because there are still uncertainties about the aging of batteries, the availability of spare parts or even in terms of regulation (if new state aid is released for example).
Hyundai/Pexels, CC BY-SA
For tools, rental is done in DIY stores, despite the fairly high cost, because the individual customer has little use for them and has little space to store them at home. On the other hand, for laptops, where the market has stabilized, there is almost no rental. If it were practiced, it would only be for ecological reasons.
A revolution for commerce
If rental is impossible for one reason or another, the firm can get around the problem by remaining on the sales system, but on the condition of being able to offer a credible commitment. Several avenues are possible:
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by a contract which would provide for a maximum number of objects produced (to maintain scarcity and prevent the price from falling), the supply of spare parts, etc. The contract must be intertemporal and cover both present and future periods.
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by depositing a certain amount of money with a trusted third party, an amount that the firm would lose in the event of non-compliance with its obligation. It is possible in theory but probably less so in practice.
On the other hand, the company will not need to make a commitment if its brand is reputable – and preferably at the high end, and therefore expensive. As emblematic examples of this type of brand, we can cite the digital giant Apple or the German manufacturers BMW, Audi and Mercedes.
For luxury goods, rental is generally excluded. Indeed, for the consumer, renting a luxury good, fundamentally ostentatious, such as a Rolex watch, would ruin the effect of ostentation: he must therefore necessarily buy it. However, for certain other categories of luxury goods such as business jets (for example the Falcon 900EX or the Gulfstream III), ostentation remains compatible with rental.
In summary, as we see, the sale or rental debate is not so simple and goes well beyond simple environmental protection when we look at the side of the firms. For traders and resellers, the transition to rental means the transition from a commercial activity to a service activity, a real revolution for them. This is what worries them.
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