Fashion rental services and their effect on the industry
Clothing and accessories rental has become increasingly popular in recent years. Especially millennials are big supporters of this trend. In fact, millennials are 3 times more likely to use a clothing rental service than non-millennials. There are many reasons for this behavior.
First, college debt and the financial crisis make it impossible for young people to buy designer clothes. Thus began the clothing rental trend. Instead of buying a trench coat, why not rent it out for a month or two? And how about a dress for a wedding or an important event? Also, profitable!
The practicality behind this reason slowly became a trend. Millennials find renting and buying second-hand sustainable and economically beneficial. Issues such as reducing landfill waste are shrinking. Many renters also shop at thrift stores. Buying used clothing makes it easier to resell it instead of throwing it away when you don’t like it anymore. There is a constant trade going on.
There are two different types of tenants. Those who are having an event and just don’t have the right outfit or those who are making the most of the rental trend. Many renters use the rental service several times a month to dress up for work or events. Most of the time the events are kept in the same circle and it is noticeable if someone wears the same outfit every time. Dressing for work meetings is another reason to rent rather than buy. Women and men want to present themselves and their company in the best light. Wearing a well-fitting suit or dress can help.
It is no longer strange to arrive at a prestigious luxury event with a dress or a tuxedo that is rented and not owned. A hectic social life coupled with the onslaught of social media has made going back to wearing clothes or bags almost unforgivable and unacceptable. So, in such circumstances, it makes little sense to invest thousands of dollars in clothes that will be worn once. Unless you’re a blogger who gets new clothes for every event, renting is exactly what he’s meant to do.
The appeal of ‘no ownership’ now extends beyond housing and cars. Fashion and accessories are now two of the biggest rental industries on the rise. It makes a lot of sense for people who can’t afford luxury brands but rely on dressing up regularly. The new generation raves about multiple experiences and desires to be trendy and fashionable, without the pressure of permanent ownership.
Le Tote president Brett Northart said clothing rentals have taken off because consumers want flexibility in their wardrobes. Also, the recession made people less interested in owning things, he said.
Even if we are seeing many benefits for consumers, there is a downside. Small and even larger retailers have had to struggle with the rental business in the past. Now they need to adapt to be able to compete. Many retailers have already started a rental and porting location for their business. A new industry based on sharing or renting clothing, electronics, and small appliances has been springing up out of nowhere for about five years, representing a disruptive force for traditional retailers.
Benefits and disadvantages for the parties involved:
Retailers: “Clothing will struggle to remain a top spend,” Marshal Cohen, chief industry analyst at The NPD Group, told Retail Dive. “You’re competing for your share of the wallet, as younger consumers seek out and spend on services and experiences more than ever before.”
Retailers need to start taking action and jumping on the bandwagon of renting clothes to customers. If your brand is not innovative or a popular Instagram/social media brand, sales will drop soon. Many large companies have already had to downsize and clothing stores due to this change in customer behavior.
Consumers: This new industry based on sharing or renting clothes, electronics and small appliances is booming, threatening the retailer. But what about the consumer?
Student loan debt and the Great Recession almost force the youth of our society to find a different way to dress well in quality clothing. Sharing becomes a great alternative to owning. These behaviors have led to companies like Zipcar, the taxi service Uber and the home rental site Airbnb. Not only financially, the trend of renting is beneficial. Many Millennials are considering this option for the environmental and economic benefits. Less waste means less burden on mother earth.
Despite all the rents, there’s one thing Millennials still buy and don’t share. Your smartphones. About 85 percent of people ages 18 to 34 own them, according to Nielsen research, and the devices are the gateway to the sharing economy. Online applications are the most important gateway to online rental and shopping sites.
Not just for non-owners, these arrangements are beneficial. Renting your car or using it to transport people who don’t have a car means getting the most out of your investment. Making money with it is even better.
Economy: To understand the dimensions of the retail and rental business, let’s look at the numbers of one of the largest clothing rental websites on the market. Right now, subscriptions make up about a third of Rent the Runway’s revenue, said Hyman, CEO and co-founder of Rent the runway. Plus, he says, the company hit $100 million in revenue in mid-2016 and has raised more than $190 million in venture capital in six rounds. The latest, a $60 million injection last year led by Fidelity Investments, pegged the company’s valuation a “significant step” from the $520 million mark it set in 2014, Hyman told Recode at the time.
Clothing and accessories rental has created a new market that is growing rapidly. While most of the websites offering these services are startups, more and more large companies are starting to tap into the market. Amazon, for example, which is not yet on the market, could attack soon. Favorite workwear brand Ann Taylor launched a $95 subscription service early last year, threatening smaller startups.
Environment: The fashion industry weighs heavily on our environment. Especially fast fashion that produces billions of dollars worth of clothing each year and is thrown away, usually without recycling, leaves a huge carbon footprint on the environment. Many clothing rental companies are trying to work against that waste. They hang out with designers who want to make more sustainable clothing and rent clothes instead of overproducing them. By renting for occasions instead of buying and disposing, fashion waste that is burned can be reduced. Waste reduction leads to a cleaner and more sustainable planet.
Many clothing rental company founders hope to put fast-fashion companies like H&M out of business. This environmental thinking is one of the main reasons, along with money, why young people are so interested in the rental trend.
Fashion rental services:
clothes rental online
Rent the Catwalk:
The online rental service offers designer clothes for rent. As the first dress and evening wear rental store, Rent the Runways has set a huge milestone in shopping. The store does not operate with a monthly subscription but with the value of the rented piece. Typically, it is 10-15% of the retail price.
Having made more than $100 million in sales last year, Rent the Runway now aims to “put Zara and H&M out of business,” co-founder Jennifer Hyman said in October. For $159 a month, RTR members can now borrow unlimited clothing and accessories, from tops and dresses to coats and bags, and up to four items at a time. The goal is to become a client’s full-time wardrobe.
Rent the Runway has opened several brick-and-mortar locations in locations including Woodland Hills and San Francisco.
These stores are far from traditional stores, instead acting more like showrooms that are an extension of subscribers’ closets.
This online rental service works on a monthly subscription. Instead of paying for each piece that is rented, subscribers pay $59 per month and receive 3 pieces of clothing and 2 accessories, unlimited times per month. This service is ideal if you constantly need to buy new clothes, such as if you are pregnant. The Tote has a great selection of maternity clothes. You can choose the clothes you want to be delivered.
Gwynnie Bee is another monthly subscription service. For $49 a month, the store offers an incredible selection of plus sizes from which you can choose up to 10 items per month. Not only is it a great deal, but the page has created its own community where members can share stories of their outfits and support body positivity. Everyday wear is prominent at Gwynnie Bee, but they also offer dresses and evening wear.
Glam Corner is the plus-size equivalent of Rent the Runway. Here subscribers can rent designer dresses and gowns for a monthly fee. A special gift from this company is offering inclusive sizing for all body types, including bulge-friendly dresses.
Here is a fast paced rental shop! Style Lend promises the customer 2-day shipping nationwide and same-day shipping in New York. If the dress is not what you were looking for or does not fit you, Style Lend promises to change the dress before your event or your money back. The price which ranges around $25 per rental is not bad either.
For owners, the sharing economy transforms possessions into streams of income, allowing items to be useful all the time: someone who only uses their car to get to and from work each day can rent the vehicle to other drivers in the meantime. For customers, the sharing economy offers convenience, value (it’s cheaper to pay to use something for a short time rather than buy it outright), and a greater variety of products and services. It also offers access without ownership, something that has resonated with millennial consumers, who came of age in the recession and are economically minded, who increasingly value experiences over material goods.
While other areas in the rental market are already booming and growing rapidly, the fashion rental industry is growing more slowly due to logistical issues. Companies are working on solutions to these problems to make the clothing rental and return process even easier and more convenient for the consumer. In the next few years, clothing and accessories rental is expected to trump fast fashion and toxic waste through clothing disposal.