Phillip Lim is one of several luxury ready-to-wear labels available from clothing rental services like Rent The Runway, which are becoming more and more popular Remember when you bought an expensive evening gown for an event, only to ever wear it once or twice?
Or picked up a trendy T-shirt, only to leave it gathering dust in the closet? Those days are over for more and more American women, who are embracing clothing rental services as a way to freshen up their wardrobes -- but the growing sector could threaten the traditional fashion industry. "Rental is the current buzzword in retail," says Kayla Marci, a market analyst at retail analytics firm Edited. Just a decade ago, clothing rentals were for special occasions.
But the business has since transformed and is raking in $1 billion in sales worldwide, according to a study published in April by business consulting firm Grand View Research. Cosmetics executive Jacqueline Jackson had her eureka moment when she realized that a monthly unlimited subscription for Rent The Runway, the leader in the American sector, would cost less than for her to rent one dress she wanted to wear to a wedding. "It was just nice to have the option to have this kind of unlimited closet and be able to wear things that I wouldn't be able to own necessarily because a lot of the items are pretty expensive," said Jackson, a mother of two young children. "I don't have any time to shop." Like many of its competitors, Rent The Runway (RTR) -- which has more than 11 million users -- offers ready-to-wear pieces from luxury labels like Victoria Beckham, Proenza Schouler and Phillip Lim.
Each item would cost several hundred dollars to buy. For $89 a month, a subscriber can get four pieces at a time from the company, now valued at $1 billion. RTR also offers an unlimited subscription for $159 a month. Seattle-ai based consulting start-up Armoire, which already has several thousand subscribers, offers a plan at $149 a month. Once a Rent The Runway client has worn an item and wants to swap it for something else, they can send it back via UPS or drop it off at a bricks-and-mortar store.
The company handles cleaning. Customers also have the option to buy the item at a reduced price. "When you're buying your own wardrobe, you think 'What are the chances I would have to wear this thing? Am I going to get a lot of use out of it?'" Jackson says. "So you tend to buy things that are more basic colors, not wanting to spend money on something that might be too trendy that you might only wear for one or two seasons. Here, you can wear the trendy things and even if you wear them one time, then it doesn't matter." The various clothing rental platforms currently on offer, which only cater to women for the time being, process the data they receive from users about preferences and measurements. They then use artificial intelligence to propose pieces they believe subscribers would want to wear. "We'll show her items that we know she'll like but we can slowly push her outside her comfort zone and introduce items that she wouldn't normally pick for herself, that she wouldn't normally wear," says Lili Morton, who is in charge of community development at Armoire. - A move away from 'fast fashion' - The other trump card for clothing rental services is its sustainability and rejection of excessive consumption -- themes that resonate for their clientele. Swedish furniture giant IKEA is moving into furniture rental, a service already provided in the United States by start-up Fernish. "I think people like the idea of buying less fast fashion, things that you buy and are good enough quality to wear for one season," says Jackson. "It's nice to have less of that junk in your closet and spend money to wear quality clothes." According to several industry sources, most pieces are used about 15 times before they are taken out of rotation. Items from Victoria Beckham are available for rental from services like Rent The Runway Armoire has reached a deal with non-profit organization Dress for Success, which offers free professional attire to women in need. For some labels, rentals are providing a gateway to new customers.
But more generally, it is offering competition to traditional ready-to-wear sales. As the sector takes off, several platforms like Haverdash are launching low-cost options. Traditional brands like American Eagle, Ann Taylor and Urban Outfitters are following suit. "These platforms are disrupting the fashion industry and changing the way we shop," says Marci. Since she subscribed to RTR, Jackson says she has bought fewer items and more basics. "Renting is really like sharing. You're not just buying, buying, buying," she adds.