Fashion rental services and their effect on the industry
Renting clothing and accessories 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 of all, college debts and the financial crisis make it impossible for young people to buy designer clothes. Thus began the trend of renting clothes. Instead of buying a trench coat, why not rent it 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 leasing and second-hand buying sustainable and financially beneficial. Problems, such as reducing landfill waste, are shrinking. Many renters also shop at thrift stores. Buying used clothes makes it easier to resell them instead of throwing them away when you don’t like them anymore. There is constant trading going on.
There are two different types of tenants. Those who have an event and just don’t have a suitable outfit or those who are making the most of the rental trend. Many renters use the rental service several times a month to dress for work or events. Most of the time the events stay in the same circle and it shows if someone wears the same outfit every time. Dressing up for work meetings is another reason to rent instead of buy. Women and men want to present themselves and their company in the best light. Wearing a suit or dress that fits well can help.
It is no longer uncommon to arrive at a prestigious luxury event in a dress or 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 inexcusable and unacceptable. So, under 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 should do.
The lure of ‘non-ownership’ now goes 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 on a regular basis. 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 rental has taken off because consumers want flexibility in their wardrobe. 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 had to struggle with the rental business in the past. Now they need to adapt in order to compete. Many retailers have already started a rental and porting branch for their business. A new industry based on sharing or renting clothing, electronics and small appliances is emerging out of nowhere about five years ago, representing a disruptive force for traditional retailers.
Benefits and disadvantages for the parties involved:
Retailers: “Apparel will struggle to remain a priority spend,” Marshal Cohen, chief industry analyst at The NPD Group, told Retail Dive. “It’s competing for its share of the wallet, as younger consumers seek out and spend on services and experiences more than ever.”
Retailers need to start taking action and jump on the train 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 downsize 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 all but 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. Some 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 trading 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. Furthermore, 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, set the company’s valuation a “significant step” from the $520 million mark it set in 2014, Hyman told Recode at the time.
The rental of clothing and accessories 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 beginning to tap into the market. Amazon, for example, which is not yet on the market, could strike 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 this waste. They hang out with designers who want to make clothes more sustainable and rent clothes instead of overproducing them. By renting for occasions instead of buying and discarding, burning fashion waste can be reduced. Waste reduction leads to a cleaner and more sustainable planet.
Many founders of clothing rental companies 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:
online clothes rental
Rent the Gateway:
The online rental service offers designer clothing for rent. As the world’s first dress and evening gown rental store, Rent the Runways has marked a major milestone in shopping. The store does not operate with a monthly subscription but with the value of the rented piece. Usually it is 10-15% of the retail price.
Having pulled in more than $100 million in sales last year, Rent the Runway is now aiming 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 handbags, 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 garments and 2 accessories, unlimited times per month. This service is ideal if you are constantly in need of buying new clothes, for example if you are pregnant. The Tote has a great selection of maternity clothes. You can choose the clothes you want to be delivered.
Gwynnie the Bee:
Gwynnie Bee is another monthly subscription service. For $49 a month, the store offers an incredible plus size selection from which you can choose up to 10 items per month. Not only is this a great deal, but the page has created its own community where members can share stories of their outfits and support body positivity. Daywear stands out 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’s 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 that varies 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 every day can rent the vehicle to other drivers in the interim. 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, and 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 issues to make the clothing rental and return process even easier and more convenient for the consumer. In the coming years, clothing and accessory rental is expected to defeat fast fashion and toxic waste through clothing disposal.