Santa Should Consider Renting Christmas Presents
Research by Dr. Dustin Harding shows that renting instead of buying a product may
increase the likelihood of continual use and practice.
It’s Christmas morning, and the family gathers around the tree to unwrap presents. Little Joey rushes to what appears to be the electric guitar he’s been asking for all year. As he fumbles to remove the wrapping paper, you tell Joey that the guitar is a rental, and if he proves that he’ll diligently practice, then you’ll take him to the music store to officially buy it. If he plays it once and leaves it on the shelf, then you’ll return the guitar and he can play with his other toys.
It sounds like an extremely pragmatic approach to Christmas, but research by Dr. Dustin Harding, marketing professor in the Woodbury School of Business at Utah Valley University, shows that renting may increase a consumer’s likelihood of continually using a new product. In his study, Harding, along with Diogo Hildebrand at City University of New York, Jannine D. Lasaleta at Yeshiva University, and Thomas Kramer at University of California, Riverside, found that renting a product (as opposed to purchasing it) boosts a rookie product user’s confidence levels and consequently increases the likelihood that the product user practices and uses their newly acquired product. In their first experiment, volunteers were given a puzzle toy (similar to a Rubik’s Cube) and were then separated into two groups: one group was given the puzzle to own, and the other was given the puzzle to rent. When asked how many minutes it would take them to solve the puzzle, renters believed they could solve it more quickly than owners did. In other similar experiments, Dr. Harding and his colleagues showed, using a variety of different products, that renting— instead of purchasing— not only increased confidence levels but also increased a person’s intentions to use the product and engage with the company. They further demonstrated in a series of experiments why this effect occurs. Harding explained, “It turns out that when estimating their own skill level, renters compared themselves to other renters and assumed that the other renters weren’t very skilled. This comparison increased a new renter’s confidence level— because they thought they were better than most— and consequently their intentions to use the product. Purchasers, on the other hand, compared their own abilities to the abilities of other owners, who they thought were highly skilled. This comparison made the new purchasers feel relatively less skilled and decreased their desire to use the product.”
“The last study was exciting because we actually tested our findings in the real marketplace using data we collected from Summerhays Music where most of the customers were kids,” said Harding. “Probably 90 percent of the customers were parents obtaining instruments for their kids. We tracked each customer a year and a half after they initially obtained their instruments and found that renters were more likely to purchase other accessories like carrying cases, strings, mouthpieces, reeds, drumsticks, cleaning equipment, oil, and bows, which is an indicator that they were actually using their instrument. In addition, Summerhays has a good upgrade program. Whether you’re purchasing or renting, you can come into the store and upgrade your instrument, and when you upgrade, a large portion of the money you’ve put into your current instrument goes into the new one. We found that renters were more likely to upgrade their instruments too. This indicated to us that a higher proportion of renters than purchasers were mastering their instruments and obtaining more advanced instrument models.”
Harding said that, “As a whole, we found that renting not only increased confidence but also increased the likelihood of using a product, following a company’s webpage, signing up for email lists, and linking with the company on social media. In addition, renters were more likely to go to the store to upgrade their product and purchase accessories. These are all indicators that people are learning and keeping up with a product.”
Based on his findings, Harding suggests that “it’s probably best to rent a product until you’ve gotten over that initial learning curve, and then make the purchase. Otherwise, you may end up with a video game, drone, or tuba that just sits on the shelf and never gets used. We’ve all been there. I decided a several years ago I was going to play the guitar so I went to a music store and purchased one. Long story short, that guitar spent the better part of its life in my closet until I finally decided to sell it. On the flip side, my wife and I rented my daughter’s violin earlier this year. She stayed with it and has been progressing quite well. Once she got over the initial learning curve, we purchased her a new violin.”
“I think if we decided to rent Christmas presents instead of buying, we could have a similar experience. There are a lot of things people can rent now: video games, drones, phones, instruments. Most of the products we use today can be rented. We’re getting to the point now where renting a phone is the standard. We make payments on phones without buying them outright, and I think that will become the norm with a lot of products. There are several websites where you can rent multiple versions of the same thing and find out which version you like the most. During the holidays it’s also a way to save money because we most often buy Christmas presents when the prices are the highest. Instead, we could rent and go through the learning curve while also researching what we really want. You can buy at a better time, outside of the holiday season.”
It may go against the Christmas status quo, but if your significant other or kids are asking for a product that comes with a learning curve, you may want to consider renting. Give your loved ones the priceless gift of confidence and watch that new toy be put to good use instead of sitting on the shelf collecting dust year after year.
The paper, “The Impact of Acquisition Mode on Expected Speed of Product Mastery and Subsequent Consumer Behavior,” is published in the Journal of Consumer Research. (DOI: 10.1093/jcr/ucy063)