The Future of Luxury Retail
In this day and age, you’d be forgiven for having a selection of beautiful clothing that sees the inside of your wardrobe more than the light of day. You find the perfect outfit for the event of the year, but after that it becomes forgotten.
In 2017, us Brits ended up forking out just under £59.47bn on clothing alone. But a survey of 2,000 women found clothes are worn an average of just seven times before being hauled to the local charity shop, sold on, or chucked out.
It’s undeniable that throwaway fashion is on the rise. So, what does the future hold for our shopping habits?
Recently, the luxury retail market has been quietly expanding – brands like Rent the Runway, Lending Luxury and Girl Meets Dress are allowing customers to borrow garments and accessories for a period of time and for as little as 10% of the cost to buy it outright.
Who’s into it?
The need for such a service might not have been realised just yet, but it certainly makes sense. Chinese consumers, for example contributed to nearly half of the global luxury goods sales and continue to be at the forefront of luxury market customers.
However, it seems they’re becoming more and more restrained with their fashion purchasing habits; you can’t expect a recent graduate to be able to spend thousands of dollars on a luxury handbag, but renting it for a month at a tenth of the cost? That’s much more do-able.
And according to new reports, the UK is showing an untapped fashion rental market worth almost £1bn. As over 25% of Londoners have expressed interest in renting clothes, rather than hitting the high street.
It’s something that millennials in particular are hungry for, with 50% of 25 to 34-year-olds saying they’re up for spending £200 a month to shop this way.
A great idea is never without its hurdles. The market leader for the fashion rental industry is the US based brand, Rent the Runway – offering an incredibly attractive package, alongside a quick turnaround. The biggest challenge they (and any fashion rental brand) face is acquiring the inventory they’re going to be renting out, not to mention the logistic barriers and maintenance fees, such as keeping up with cleaning or damages.
Logistics in particular is the biggest obstacle threatening the take-off of this trend. The inventory turnaround needs to be high, as the products are seasonal, and rental companies need to be able to offer different sizes and colours to appeal to every consumer.
Brands may also need to help kickstart a behavioural shift in the consumers’ mindset, as some people might be a bit weirded out wearing clothes previously worn by strangers.
The Big Three
Liking the sound of all this? Let’s take a look at the major players in the luxury fashion rental market.
Rent the Runway
Set up in the US by Jennifer Hyman and Jennifer Fleiss, Rent the Runway launched in November 2009. Starting as an online service, the company have now branched out with brick-and-mortar retail stores in New York, Chicago, Washington, D.C., San Francisco and Los Angeles.
Customers are able to subscribe for as little as $89 and rent Rent the Runway’s designer items for as little as 10% the original cost over four or eight days, with shipping, dry cleaning and insurance included in the package.
US consumers can also rent accessories including jewellery and handbags, but are able to buy “essential” items such as lingerie and cosmetics.
They’ve been causing quite a stir with The New York State Society for Human Resource Management, who honoured them as one of the best companies in New York to work for in 2014. It was also named as one of the 50 companies disrupting the status-quo by CNBC and in 2011, Fast Company named them one of the 10 most innovative fashion companies.
Girl Meets Dress
Anna Bance co-founder of UK based Girl Meets Dress was inspired by the idea in 2009 while working in the fashion industry.
Their service allows customers to rent dresses for either a two or seven night period, try them on at home and refund any dresses that don’t fit. After the customer’s chosen dress has had its time in the spotlight, its shipped back for free.
It’s not just the UK that gets to enjoy Girl Meets Dress, countries including Belgium, France, Germany, Greece, Italy, Portugal, Spain and many more can rent their dream dresses and ball gowns with ease.
Dou Bao Bao
This Beijing-based start-up provides a high-end designer handbag renting service to everyday Chinese consumers. They’re also rumoured to have received more than 10 million yuan ($1,470,560) in funding from Chinese domestic investors in June 2017, so they’re all trousers as well as talk (pun intended).
Consumers can rent luxury bags from brands including Louis Vuitton, Prada, Chanel, Christian Dior, Hermés and Celine, with a fixed refundable deposit, which varies according to the cost of the chosen accessory for as little as 99 yuan ($15) per month.
Using either the Dou Bao Bao app or WeChat, consumers can pick and choose their preferred handbags on both platforms. And while it was originally meant to be a soft launch, the business model has been met with very high interest from the Chinese public – much more than they were expecting.
What’s more, founder Kaiwen Cheng has said he plans to expand the business to other countries, including Malaysia, Thailand, Vietnam and Korea.
Giving consumers the option of renting their wardrobes could have a hugely negative impact on high street retailers. Customers would be more likely to spend money per month to get higher quality items, rather than cheap knock offs.
But, as there is such an interest in this new way of shopping it could end up helping the economy and becoming the new norm. Just how the likes of Netflix and Amazon Prime Video have replaced household names like Blockbuster, and Apple Music and Spotify have done away with the need to pop into your local HMV.
Popular opinion is that if this is the case, there could be a large shift in consumer behaviour as a whole. Never again would we feel the need to trawl hundreds of retailers, so we can ‘invest in the perfect winter coat’.
Buying an item of clothing – especially when you’re paying full price for it – makes us act more rational; we’re more inclined to choose the classic camel coat rather than the loud, colourful print that makes you feel you belong in an episode of Sex and the City. But if it costs as little as an Uber home and you know you can just send it back after the novelty wears off? Why not?
This new behaviour could also cause brands to become more daring with their designs. Could ‘classic’ garments become obsolete once we realise we no longer need to fall back on them?
There are many questions that come with this new, exciting trend. But one thing is for sure, it’s popularity is growing with every new season and every new style.
What do you think? Love it? Hate it? Already tried it? Let us know your thoughts in the comments.
After almost four unforgettable years as a Copywriter at BBH London, Lauren is now loving being her own boss. With a flair for the written word and a passion for editing, she enjoys nothing more than bringing stories to life (and a cup of tea).