Over the past decades, we have had to buy items we want to use, regardless of how much we use them. There are items that feel strange to share, like fridge, or toothbrushes. Ownership in these cases is understandable. For the items that we use once or twice, single ownership is not a viable option. We often try to compel ourselves with a more feasible option named on-demand access, and that is not an answer on the whole as well.
Today, we have the technology to help us create platforms for the new online marketplaces and to provide us with multiple channels of communication- easier than ever! Customers can hire a car, stay in a spare room, or even ride in someone’s car. In previous articles, we talked about how sharing economy has been enjoying a rapid growth over the past few years, and how the small ideas are becoming a billion-dollar ideas in a matter of time. As a matter of fact, PwC predicts the sharing economy to make up to $335 billion revenue by 2025, which is currently only $15 billion. With little to explain, sharing economy provides owners with an option to transform their possessions into a revenue stream, and with long customer lifetime value. For them, it’s all about convenience, value, and revenue.
But can we replicate this growing trend in fashion too?
I believe it’s a million-dollar question, and if we can find an answer to this, we are probably on the verge of opening a new dimension in the horizon.
Accessories and even clothing very often have a high value with low usage. It’s very common for anyone to have clothing that costs three figures, and many of them bought are often worn occasionally. A perfect example would be the wedding dress that one might buy. It’ll cost you a fortune, but you can only use it occasionally. As a result, dozens of fashion companies have entered the sharing economy fray over the past few years to tap into the opportunity.
Fashion Rental Services
Fashion rental services allow potential customers to borrow clothing or accessories over a period. Most of the companies charge 10 to 20 percent of an item’s retail price. The Business of Fashion has highlighted the best-known fashion rental services in its latest blog, Business of Fashion quotes, “the best known of these is US-based Rent the Runway, which launched in 2009 and today has over 5.5 million members. However, the swath of start-ups in the field includes Girl Meets Dress in the UK, Chic by Choice in Europe and Glam Corner in Australia, as well as more niche ventures, such as Gwynnie Bee (plus-size fashion rental) and Borrow For Your Bump (maternity-wear rental).”
The major reason why someone buys a shoe, a gown or a suit is to have an easy, inexpensive access to the services that items promise to provide, and when there is a possibility to rent it, one can enjoy the services for a brief period. Due to this, loan clothing companies often charge low on the aspiring brands that are usually unaffordable to public. You might not want to spend $1,000 on clothing to wear it once or twice, but you’ll consider paying $100 for that same piece by renting it. The proposition is quite attractive, isn’t it?
Impact on the Fashion Industry
So far, the sharing economy has had little impact on the retail as compared to the sectors such as hospitality or transportation. This is, however, majorly due to lack of awareness among people. Some believe that if the fashion economy flourishes, its impacts on retailers would be profound. Rent the Runway’s Hyman predicts that fast fashion businesses, in particular, could be affected, as customers use rental services to borrow high-quality on-trend seasonal pieces, rather than buy cheaper versions on the high street.