More people are subscribing to the notion that owning less is more — literally. Beginning with pioneers like Rent the Runway, the clothing rental market is one of the fastest growing segments in the retail industry, projected to reach more than $2.5 billion in the next four years.
Why are more people willing to share their everyday clothes with strangers?
This segment’s growth underscores an industry shift seen played out again and again across categories: Today’s consumer is changing. This change is not dependent on age, income or location. All consumers are changing, and the clothing rental segment perfectly represents the changes that continue to evolve — like a rise in environmental consciousness and an expectation that shopping is a seamless omnichannel experience. These aspects of the clothing rental market are just the beginning, and other themes about today’s consumer — and society — have propped up a segment that is less of a trend, and more likely a channel with staying power.
Retailers and brands are adapting to the desire to share
People share. They share their houses for a week. They share their cars with strangers for a ride. Now, they share their clothes.
We may not fully realize it, but sharing is now core to consumer markets. More obvious is people’s nearly inherent interest in sharing their lives – including fun vacations and experiences on social media — creating a feverish demand for the right experiences and the right looks. Sharing platforms like joymode allow you to rent anything from a high-end blender to a baby crib to a video game console. Why not mix, escape, or try everything once when everything you need is so accessible and requires little commitment? While consumers are able to experience and capture all of these new life moments, it's also easy to look as put together as a fashion influencer with consumer-to-consumer services like depop or the dozens of online rental clothing services.
Rental is another manifestation of the circular economy
Renting is essentially the same as reusing, which is the foundation of most green efforts. Some consumers have raised concerns around the impacts of fast fashion (both for humans and the planet), or wasting items they no longer use, but still have a desire to try new things or look relevant and Insta-worthy. When popular brands like Free People, Vince and Rebecca Taylor offer rental programs, consumers can keep up without creating a lot of clothing waste. This circular economy — a term the retail industry will continue to hear across fashion and CPGs — feels more closely aligned with consumers’ desire to responsibly consume. Further, if consumers are renting, they can worry less about the cost of luxury, like a $500 cashmere sweater from a designer brand. With a subscription, they can wear it without owning it and look forward to quickly getting a new look. In a circular clothing economy, consumers would build a core closet that sees very little turnover, and build on it with more seasonal pieces that are then reused by others in the program.
Rental removes the last shopping barrier: cost
Digital has made it easier than ever to buy a shirt. You can do it at 3 a.m. You can do it from your living room or at your office. It will arrive on your doorstep tomorrow. It's almost unreal how easy shopping is now. But there is one reality shoppers still have to contend with: money. Consumers still have a finite amount of money (or credit) to shop with, and it may be the only barrier left in completing a purchase. But renting changes that. Consumers get to shop with abandon, and do it all again soon, without having to worry about pesky prices.
In theory, four dresses from Rebecca Taylor cost more than $1,600 in total. Now they cost $159 to rent. It feels like a magical experience for consumers. It also doesn’t take an economic wizard to realize if the market removes a barrier, demand is expected to increase. This means more consumers trying a brand that was once inaccessible. New brand loyalists will emerge, meaning purchases outside of a rental program or the ability to scale a rental channel with more options, subscription tiers, etc.
Perhaps this is why retailers who have launched rental offerings are not concerned about one channel cannibalizing another. Further, the rental offering gives brands an opportunity to learn more about their customer’s habits — what do they rent more than once, how do they prioritize their picks, which trends are they more willing to experiment with without budget constraints.
In a continually evolving omnichannel industry, new offerings come and go. Yet, because rental is so deeply entrenched in what consumers prefer and want, it may prove to be a mainstay channel for more brands and retailers.
