The new step in the democratization of fashion could be the fashion rental business. For decades now, we have been speaking about mass-clusivity. Think about the cheap flights that give us the opportunities to spend the weekend in Paris or London. The explosive growth of fast fashion gave everyone the possibility to have a designer look. Think of fast-fashion retailers like Zara and H&M, and middle-market competitors like Massimo Dutti or COS. With the growth of the luxury fashion rental business, the era of luxe-clusivity has entered.
When consumers buy clothing, we mostly buy things we can wear every day. Think of essential items you can’t miss, like black pants or a navy sweater. The idea of rental clothing is that you can rent a look for the moment. Instead of wearing your satin gala gown from Valentino twice at a gala, you rent the look.
Biggest expansion in fashion
Living in a capitalistic world, growth is key. Nowadays, we are all speaking about circular and The Doughnut Economy by Kate Raworth [1]. But the true investors want to see growth. Fashion rental business is rising the fastest in the world of fashion. What can we learn from it?
Rent the runway
How does the business model work? It allows consumers to spend a part of what they would have spent in a high-end boutique. Consumers rent the cloth for a period of 4 or 8-days for a fee of 10% of the retail price through a platform.
One of the key successes of the fast-grown company is that they serve the busy, career-oriented young woman who is born with a mobile device offering her a 360 service of clicks and bricks. New businesses cannot only rely on online service. As seen in tech companies such as Google that started as a search engine now builds cars. In contrast to existing brands such as Apple who started with hardware and is now developing software more and more.
Repeat after me
With the Amsterdam based self-coined fashion liberalist Lena [2], you either rent or buy clothing. Lena carefully curates selected items from ‘slow fashion’. It’s a mix of long-lasting designer items and one of a kind vintage pieces. Together with partners, Lena makes it easy to get your items and return them all. What sets Lena apart is that she gives you the option to rent or buy the pieces. Lena wants to create a new norm in the fashion industry, whereas their American competitor is creating new business models. Same outcome, same target group, different ideals.
Subscription to fashion
In the past, we rarely have subscriptions, maybe for a magazine or a tabloid, but in the early ‘90’s you should have a subscription for music, car rental or other services. Within the new era of fashion, we will have a subscription for fashion too according to Jennifer Hyman, CEO of Rent the Runway.
Feeding desires
To show off on social media in a range of exclusive labels to impress their peers on social media serves the desire of millennials and Generation Z. It meets the needs for less stuff and for the incredible image-making we all want to portray on social media. We all look at the best inexpensive designer clothing, don’t we?
With the growth of the rental fashion business, anyone – even with a small budget – can look amazing in designer clothes. When does your subscription start?
Tjarda Wessels
10 maart 2020
[1] What on Earth is the Doughnut? The Doughnut of social and planetary boundaries (2017) | https://www.kateraworth.com/doughnut/
[2] LENA – Investment Ready Program 2018 | https://www.youtube.com/watch?v=I-Q8aMqgcIc&t=1s
Three Strategies for Brands Entering the Rental Market • Want to get started with rental, but not sure which avenue to take? BoF breaks down the options and weighs the pros and cons of each. | https://www.businessoffashion.com/articles/professional/how-to-do-fashion-rental-as-a-brand-rent-the-runway-white-label
Rent the Runway hits a $1 billion valuation | https://techcrunch.com/2019/03/21/rent-the-runway-hits-a-1-billion-valuation/
What The Fashion Industry Can Learn From Rent the Runway’s Disruptive Business Model By Sheena Butler-Young | https://footwearnews.com/2017/business/retail/rent-the-runway-fashion-industry-retail-disruption-331430/
