In the UK fashion industry, a constant demand for newness is at odds with rising concern about overconsumption and the negative impact fast-fashion has on our planet. Many argue that renting fashion is a more environmentally-friendly alternative, but consumers remain resistant and there are concerns that the concept is not entirely sustainable. So where does that leave the fashion rental specialists?

What we've seen

  • Rent the Runway announced in October 2018 that is partnering with shared office space business WeWork, opening a network of clothing drop-off boxes in 15 locations across the US.

  • Recent entrants looking to further disrupt the US fashion market include Tulerie, a peer-to-peer fashion rental app, and Rotarity, a streetwear rental company.

  • Hirestreet launched in the UK in May 2018, making fashion rentals more affordable by hiring out mass-market fashion labels like ASOS, Topshop and Zara.

  • Paris-based rental business Panoply which offers current-season fashions launched in 2016, bought UK competitor Chic by Choice in 2017 and opened a concession in Galeries Lafayette in April 2018.

  • Westfield introduced a Style Trial fashion rental pop-up in the run-up to Christmas 2017, enabling shoppers to hire fashion products throughout the party season. 

Renting fashion becomes more mainstream

The growing number of companies looking to tap into the sharing economy in the fashion industry aligns with Mintel’s Why Buy Trend, which looks at how attitudes toward ownership are changing. Whilst the sharing economy remains more apparent in high-commitment categories like homes and cars, it is gradually becoming more mainstream in categories like fashion.

Following on from the success of US-based Rent the Runway, in recent years, there has been a rising number of businesses launching globally in the fashion rental space. The concept of renting fashion has evolved from its traditional occasionwear origins and people are beginning to understand in the value in renting more frequently. Subscription models have driven this trend, making fashion rentals more cost-efficient and convenient for consumers. To put this into context, Rent the Runway says that its subscription service which only launched in 2016 now accounts for more than half of its annual sales.

Consumers are no longer simply hiring fashion products for special occasions they are renting garments for a variety of different uses. The benefits of renting fashion are wide-ranging. Not only can renting clothes be a more environmentally-friendly alternative to buying into fast-moving fashion trends, but consumers can also save space in their homes with reduced wardrobe needs. Fashion rentals can also be an effective way to fulfil temporary fashion, such as clothing for women during pregnancy. Meanwhile, a number of fashion rental companies are tapping into a demand for more niche and everyday fashion products like streetwear. 

Figure 1: Westfield Style Trial Pop-Up, 2017
[graphic: image 1]
Source: Westfield/Mintel

How often do people buy clothing?

One of the biggest arguments for renting fashion is to reduce the negative impact the industry has on the environment. Hiring fashion is often hailed as a more sustainable way to get access to seasonal and trend-led clothing. To fully understand the value of renting fashion over purchasing, it is important to understand the extent to which we are consuming clothing. Research for Mintel’s Clothing Retailing – UK, October 2018 can help to put this into context.

Although there has been a consistent decline in the frequency that people are shopping for clothing, the report found that one in three UK consumers (34%) have bought garments once a month or more during the last year.

Fashion trends inevitably encourage people to buy clothing more frequently and wear the items that they buy less often. Although consumers are becoming more aware of the negative effect such behaviour has on our planet, there remains a widespread desire amongst British consumers for newness with regards to their wardrobes. Research for Mintel’s Menswear – UK, March 2018 and Womenswear – UK, May 2018 reports confirm this demand, with 64% of clothing consumers saying that they think it is important for retailers to update their collections frequently, whilst 29% think buying clothes is about keeping up with the latest fashion trends. These figures are significantly higher among young shoppers. 

Figure 2: Frequency of clothing purchases in the last 12 months, August 2017 and August 2018
Base: 1,855 internet users aged 16+ that have purchased clothing for themselves in the last 12 months
[graphic: image 2]
Source: Lightspeed/Mintel

Sentiment towards fashion rentals

Despite consumers wanting the option to frequently update their wardrobes, uptake of fashion rental services has been slow. Although there are a number of companies that continue to grow, few if any have actually disrupted the clothing market to a meaningful extent. The biggest company fashion rental is Rent the Runway, reportedly generating over $100 million in revenues per annum. It reports that it has over 9 million members, but it is not known how many of these are active customers and, even if all are active, that only represents approximately 2% of the US population.

However, research does suggest there is room for the fashion rental market to expand as demand for such services is relatively high. Mintel’s Designer Fashion – UK, November 2018 Report found that almost a third of consumers (29%) are interested in renting designer fashion items that they can’t afford to buy, rising to 37% of 16-24s. Meanwhile, Mintel’s Luxury Goods Retail – International, August 2018 suggests that fashion rental companies have an opportunity to engage consumers that cannot afford to buy high-end goods but still have an interest in designer fashion. Some 70% of UK consumers that have not bought luxury goods in the last 18 months said that their primary reason for not doing so was because luxury goods are too expensive.

Meanwhile, as 66% of UK luxury buyers think owning luxury goods is a confidence boost and a further 56% think owning luxury goods makes you stand out from the crowd, there is undoubtedly room to promote the emotional benefits of wearing designer fashion to those that are interested in renting fashion they can’t afford to buy. 

Barriers to entry

The rising number of innovative and fashionable companies that have launched in the fashion rental space has changed consumer perceptions of such services, helping to make renting fashion a more mainstream activity. However, many consumers remain resistant and for a variety of different reasons.

Cost is likely a major deterrent. General affordability comes into play, as many fashion rental companies focus on designer fashion and the cost of hiring high-end garments is often higher than buying a mass-market dress. Meanwhile, borrowers also face high costs if they damage goods, which would be a major barrier for those that are renting because they simply can’t afford to buy into designer fashion. Beyond cost, there remain a number of other barriers to entry, including anxieties over garment quality and cleanliness, sizing and fit issues, alongside the hassle of ordering and returning garments as many companies only operate online. Companies that can find ways to offset these issues will be best placed to succeed.

What it means

  • Price, convenience and style all still trump conscience in the eyes of today’s fashion consumer and despite growing awareness of the problems that fast-fashion causes, consumers still want constant newness from retailers and leasing garment could help achieve a more circular economy.

  • Rising usage of social means that people are becoming more aware of how often they wear fashion items, fueling a demand for fast-fashion, but rentals can be a more sustainable alternative to those people concerned about being photographed in an outfit more than once. 

  • Clothing rental has the potential to reduce waste and extend the lifespan of garments. However, many argue that renting fashion is not entirely sustainable due to the impact of garment transportation and cleaning. Therefore, companies in the fashion rental space need to reassure consumers and address these issues if they are to be seen as being a more sustainable option.  

  • To offset the other barriers to entry, rentals need to be both convenient and affordable, which means that those that can offer the best experience at the lowest cost are most likely to succeed.

  • The online-only presence of many of the leading players is likely another deterrent and a physical store presence would help to reassure consumers that are unconvinced by the rental concept.  

  • Mintel expects that buying and renting fashion are likely going to remain complementary to one another for the foreseeable future, but there is an opportunity for it to become more mainstream if rental companies can tap into the growing demand for more limited-edition products, like those discussed in Fashion Drops: believe the hype - 19th July 2018.

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