Market Trends of Online Clothing Rental Industry
Adoption of Subscription-based Services
- The online clothing rental marketing landscape has undergone significant changes post-pandemic, gravitating toward subscription-based services. Through these subscriptions, customers can rent numerous pieces of clothing simultaneously for an unlimited period in exchange for monthly fees.
- The rise of monthly and quarterly subscription services is a growing trend in the online clothing rental industry, wherein retailers provide subscribers with rented clothing on a monthly or quarterly basis through online platforms. These services are instrumental in helping companies reach a broader customer base, save time in acquiring new customers, and generate recurring revenue.
- Rent the Runway stands as the most popular and one of the oldest companies in this business, historically known for formal wear but now offering a wide range of apparel for any occasion. Other firms offering subscription packages include Gwynnie Bee, New York & Company Closet, Tuileries, Nova Octo, Nuuly, Armoire, Vince Unfold, and Vivrelle. New companies are entering the market to meet the rising demand for these services.
- Moreover, these companies offer both monthly and annual subscription fees to interested customers. To attract subscribers, players in this market offer early access, exclusive offers, loyalty discounts, and other benefits. For instance, in November 2022, Fashion Forward Box, operating in the United States, offered free memberships for a limited time before implementing a subscription fee. This giveaway coincided with the launch of its rental clothing business in the United States.
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North America is the Fastest-growing Market
- The North American region is fast emerging as a growing market for online clothing rentals. In the region, millennials are increasingly renting out items against owning them. In the United States, clothing rentals fall behind other categories, such as cars, furniture, and electronics, but online clothing rentals are fast catching up.
- In a study published in Sustainability in August 2021, a survey conducted in the United States showed that GenZ adults are increasingly inclined towards renting rather than owning clothes - which can be attributed to the fact that they focus on usage rather than ownership as part of their consumption habits. Moreover, luxury brands offer a variety of apparel at premium prices, with more consumers preferring to rent the clothes over purchasing owing to the cost; rental service providers are offering exclusive collections on their platforms to attract consumers.
- Companies and retailers are also responding to the challenge and the opportunity that online clothing rentals pose. For instance, CaaStle operates rental services for its Gwynnie Bee brand and third-party retailers, including Express, American Eagle Outfitters Inc., and Ascena Retail Group Inc.’s Ann Taylor. It charges a flat fee per active subscriber to provide all aspects of the offer, from logistics to laundry.
- Furthermore, brands have been achieving more customers and increasing their customer base by educating consumers about cleaning procedures and sustainable practices during shipping while also addressing their concerns about hygiene and the quality of products. For instance, Banana Republic of Gap Inc. offers an online women's apparel subscription service in the United States. The monthly subscription, "Style Passport," costs around USD 85 a month, under which women can rent three different pieces from the brand at a time.
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