Fashion rental services like Rent the Runway are thriving, with consumers demanding more flexibility and sustainable practices from the labels they shop at.
In this article, we explain why rental services are successful, the brands that are dominating the space, recent labels breaking into the market and other product categories this business model can expand into.
EDITED data has determined the number of retailers promoting rental services has almost doubled compared to a year ago as brands trial more sustainable business alternatives. Mentions of circular practices such as ‘rental’ and ‘resale’ on homepages and newsletters have seen a 43% increase YoY in the US and UK market.
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Rental retail in the news
• The extreme popularity of rental services are not without teething issues as demonstrated by Rent the Runway. After pausing new subscriber signups for nearly a month due to a warehouse upgrade that caused delivery delays, the company announced last week it’s back to running business as usual.
• The success of these services in retail has paved the way for peer-to-peer wardrobe rentals to emerge in this space. Dress hire platform, HURR Collective, has launched a pop-up in London which will run until November.
• Le Tote, a rental service based out of San Francisco, made headlines recently for acquiring Lord & Taylor.
• With direct-to-consumer subscription services becoming increasingly popular in the UK, Stitch Fix launched into the UK market in May 2019.
• ThredUp upcycled 576,000 fast-fashion items last year and by incorporating AI into pricing, personalization, styling services and more, the company is pioneering a new way to tackle the fashion industry’s sustainability problem.
What has worked and why?
• As the fashion industry moves towards more sustainable practices, rental services will continue to grow as a type of sustainable effort.
• This way of shopping resonates with the younger eco-conscious consumer who still wants to share new outfits on social media channels.
• Retailers can carry higher ticket products and by doing so elevate a sense of premium around the brand in an accessible way for shoppers. Rent the Runway is an example of success in this area.
• Broader consumer trends are leaning in the direction of rental services across verticals – music and movies are all commonly consumed via a rental model and isn’t a foreign concept.
• Offering products that range from workwear to weekend and even occasionwear, rental platforms can be a one-stop-shop for customers.
Who are the major players?
Rent the Runway
- Launched: 2009
- Offers: Bridal, Maternity, Kids & Plus Sizes
- Perks: Drop off locations available
- Launched: 2011
- Offers: Kids, Mens, Petite and Business Casual
- Perks: Customers receive personal stylists
- Launched: 2011
- Offers: Womenswear only, sizes 0-32, casual and workwear
- Perks: Various payment plans
The influence of subscription boxes
There is a feeling of exclusivity around subscription services with deals and offers, or a specialist curated box in exchange for membership. When considering these product categories or shopping format, remember that sustainability is at the core of why consumers are looking to rental services.
- Beauty – For just $10 a month, Play! by Sephora offers a curated selection of sample sized cosmetics.
- Lingerie – Introduced in 2011, lingerie subscription service Adore Me came on the scene producing sizes 30A – 46G.
- Menswear – GQ’s quarterly men’s subscription box features products ranging from clothes, technology and accessories.
Brand adoption timeline
Notable retailers adopting rental service models
- Ann Taylor’s Infinite Style – Nov 2017
- Vince’s UNFOLD – Nov 2018
- American Eagle’s Style Drop – Feb 2019
- Loft’s Infinitely LOFT – May 2019
- Fashion to Figure’s FtF Closet – Aug 2019
- Ganni’s #GanniRepeat – Sep 2019
In conclusion, fashion rental services will continue to shape the retail industry and influence how consumers shop as more brands try to emulate Rent the Runway’s success.
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