The Rise of the Rental Model in Fashion

Urban Outfitters’ introduction of their new women’s subscription offering allowing consumers to rent 6 items of clothing per month, is the first move of an established mainstream brand into this growing business model. Launching in the summer in the US, Nuuly costs $88 per month and will give users an average of $800 of clothing each and every month. Is this a fad or is this the first of many retailers to take this route?

Clothing subscription models have been around for some years with the likes of Thread and The Chapar providing curated products in menswear either through a personal styling or send and return model. Other startups like Wear the Walk and Le Tote offer subscription based rental services already but Urban Outfitters is the first established brand to actually change the established purchase and keep approach.

So why would a consumer want to rent their clothes instead of buying them outright?

Newness – personal image in the age of social media is big bucks. We’ve all heard of people who buy clothes online, take a selfie for Instagram and then return the products. Companies like ASOS are getting savvy to this and recently promised to seek out people who abuse the system and potentially blacklist them! Having new outfits each month, delivered to your door starts to eliminate these practices and keeps consumers at the forefront of fashion.

Personalisation – with the rise of styling services, AI and better fit technology, you can get a curated offering based on your personal preferences sent to you in a size that you know will fit. Whilst personal choice will still be a critical factor, the ability to find outfits that are selected just for you in an instant will increase the appeal and reduce the time taken to search endless options.

Cost – Maintaining constant newness in the modern age can become a costly affair so moving to a rental model can be a much more cost effective approach for the consumer. Take ‘Wear the Walk’ – renting a £500 dress for a wedding might only cost you £80. You can be assured that it’s delivered to you professionally cleaned and ready to wear and the likelihood of you wearing it another 4 times to other events is probably pretty slim so it’s a great return on your investment. This also opens up a new world of more premium clothing to a wider group of users who were potentially excluded due to the high cost.

Sustainability – more altruistically, consumers are now more and more concerned about the impact of the clothing industry on the planet. With the fashion industry being one of the biggest polluters in the world, moving to a sharing economy makes perfect sense. As the second biggest consumer of freshwater and creating more greenhouse gasses than all of the international flights and maritime shipping combined, the fashion industry is coming increasingly under the spotlight. Whilst the ‘fast fashion’ throwaway culture may start to decline, the desire for newness plays more into the hands of the rental business model.

Photo by Thomas Millot on Unsplash

Ease of access – a big blocker historically would’ve been the time taken by the consumer to use the service. The supply chain has pretty much evolved to the state where it’s now exceptionally easy to get and return products, reducing purchasing friction. Final mile delivery services are evolving so that you can get something delivered to your location, at a time that suits you, and you can return items in the same way.

So as a model, the rewards are increasing and the friction is decreasing – all positive signals that the model is likely to grow over the coming years. And whilst it might not replace the ownership of clothes completely (nobody wants to rent a pair of socks!), the renting of clothing is likely to gain a strong foothold particularly in the premium to luxury markets as the cost of accessing outfits that were previously out of reach, suddenly becomes much more attainable.

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