One of the biggest trends coming out of Shoptalk 2019 was the growth of the rental economy. The combination of options and the shift in life stages are fueling the rental economy in ways that we have never seen before. From furniture to fashion, brands and startups are curating items for individuals to select, use and return to serve consumers ever changing needs and revolving trends.
We are all familiar with some of the original companies, like Stich Fix and Trunk Club, that started off with providing inspiration and ease to consumers by curating a unique combination of fashion and accessories through a monthly subscription. However, consumers are also evolving from an ownership culture to a sharing culture. This makes a lot of sense in specific use-cases. For example, some fashion shoppers may be experiencing weight loss or pregnancy and don’t care to invest in a short-term wardrobes. Others may be looking to regularly try new items or stay up on the latest trends without shelling out the money to purchase these items outright.
Retailers Are Jumping Onboard
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Within the last two years, a few other companies entered the fashion rental space, including Le Tote, Haverdash, Wantable. However, over the past few months, we have noticed more and more retailers are starting to jump on board with the rental economy. Retailers including Banana Republic, Urban Outfitters, NY&C, Express, Loft, Ann Taylor are just a few examples of the retailers now offering subscription services to rent their clothing, in addition to their on- and off-line stores. Most programs let consumers rent 3-4 pieces at any given time and vary as to how often you can replace items per month.
So, the question is, will these rental programs cannibalize retail sales from these retailers? Only time will tell, but retailers have put some operational rules in place to try to prevent this from happening. Some retailers don’t include their entire product catalog in the rental program. Other retailers require you to add your picks to a Wishlist, and then the system picks which pieces from that list are actually sent to you.
In addition to selling used clothing through a partnership with ThredUp, Macy’s has launched their rental program, My List, at its Bloomingdales chain, with the aspiration of appealing to a younger demographic. According to Macy’s CEO Jeff Genette, “When you look at subscription so far at Bloomingdale’s, 50% of the subscribers are millennial and 30% are brand new to Bloomingdale’s,”. So, as brands and retailers battle the fear of losing sales to rentals, making the right strategic decisions along the way can lead to growing their user base and reaching different shoppers.