While men’s tuxedo rentals were well-known even a decade ago, formal-wear for women was more or less unheard off and women were left to borrow from friends rather than splurge for a one-time event. With the onset of recession and the aftermath, this has changed and today online fashion rentals are drawing a lot of attention, considered by many fashion-conscious budget-friendly consumers as a blessing in disguise. And if retail watchers are to be believed, rental e-commerce is here to stay…
Though the concept of fashion rentals has really picked up over the last two years, it has roots much before the recession set in. The pioneers of this change have been marketers Lloyd Lapidus and Finance professional Greg Pippo who noticed that the women around them were constantly borrowing each other’s jewellery and handbags for special occasions. Together in 2004, they founded Bag Borrow or Steal, one of the founding companies in the online fashion rental industry. Through Bag Borrow or Steal, customers could choose between designer’s handbags, sunglasses, jewellery and other accessories, which they could rent for a month at a fraction of the retail price and then return it or if they loved it, they could pay the rest of the cost and keep it. Also known as Avelle, the company became a known name after being featured in the movie ‘Sex and the City.’
One of the most recent newcomers to the rental scene is Borrow Mini Couture that rents out children’s special occasion clothing. Being for more than a year in Beta, Borrow Mini Couture was officially launched in late October 2013.
After Avelle paved the way for high-end fashion rentals, Harvard Business School graduates Jennifer Hyman and Jenny Fleiss took advantage of this nascent retail format and utilized the opportunity to expand on this concept to include luxury-clothing items, and in 2009, ‘Rent the Runway’ was born. Also, referred to as the ‘Netflix of fashion’, this member’s only online portal rents out clothing and accessories from more than 95 designers for about 10 per cent of their retail prices. “Designers hated the idea of Rent the Runway because they thought it would cannibalize their retail sales. Whereas, in fact, what we’re doing is introducing the next generation of women to these designer brands,” explains Jennifer. Retail formats such as Rent the Runway were well suited to withstand and even benefit from the economic recession of the time, when people were clouting in uncertainties regarding spending money. While various companies selling high-end luxury items took a hit in recession, the rental portals offered women a more economical way to look fashionable without spending a bombshell on it.
Though budget-conscious fashion lovers are a great target market for the online rental industry, another ideal customer base consists of individuals going through temporary stages of rapid size change, including pregnant women and small children. The rental module offers options to simply rent out items in their current size rather than paying full price for clothing that won’t fit in just a few months. To capture such a consumer base, Belly Bump Boutique, which was established in 2008, rents out elegant, special-occasion dresses for women in all stages of pregnancy. The idea which spurred the start of this venture was when Founder Julie Ann Christoi Siksa saw her 7-months pregnant friend struggling to find an affordable dress for a wedding. “There are over 4 million pregnant mothers in the US, who spend an estimated US $ 1.5 billion on maternity clothing each year. I knew that an alternative solution needed to become available when it came to maternity formal wear,” informs Julie.
Time and again many players are entering this segment to cash upon the success of this format and one of the most recent newcomers to the rental scene is Borrow Mini Couture, a company with a story similar to Belly Bump Boutique. Several years ago, founders Heidi and Alex Leiske were taking their 1-year-old son to a wedding due to which they purchased a US $ 300 formal outfit for him, which he quickly outgrew and never wore again. After the couple was unable to find any businesses that rented out children’s special occasion clothing, they decided to start their own. Being for more than a year in Beta, Borrow Mini Couture was officially launched in late October 2013. Though their company is still relatively new, the couple have planned to expand age range and children’s accessory offerings in the near future.
As of now, these rental businesses have been successful solely by finding ways to engage with the customer, offering added services and making the experience as stress-free as possible. While brick-and-mortar retailers can entice even the most tight-fisted shopper with a visually engaging display, compelling impulsive shopping, e-commerce-based rental businesses have to find other ways to keep their customers coming back. To do so, Rent the Runway offers options like live chats with stylists and the ability to order a free back-up size. Belly Bump offers hassle-free exchanges if an item does not fit. With most companies today, social media marketing is also one of the most important strategies for rental businesses to grow their customer base. Borrow Mini Couture has gained a lot of attention by reaching out to parenting bloggers, who have tried and loved their services, while promoting it on their websites. At present, keeping up-to-date with the latest trends in fashion is both a difficult job and cash-consuming process, but luckily for these fashion rental portals, being fashionable becomes much easier!
